CINTAS CORP Q1 FY2025 earnings call

• Fiscal 2025 first quarter total revenue reached $2.5 billion, an all-time high, with 8.4% growth on a same-day work basis and 8.0% organic growth. - Gross margin increased to a record 50.1%, and operating income was 22.4% of revenue, an all-time record. - Diluted EPS grew 18.3% to $1.10. - Increased the quarterly dividend by 15.6%, marking the 41st consecutive year of dividend increase, and repurchased $473.6 million of common stock. - Invested $92.9 million in capital expenditures, focusing on technology, supply chain, and operational efficiencies. - Continued to focus on key verticals: healthcare, hospitality, education, and state and local government, which performed well.

Fiscal 2025 first quarter total revenue was $2.5 billion, up 6.8% year-over-year. On a same-day work basis, revenue growth was 8.4%, and organic growth (adjusting for acquisitions, foreign currency, and workdays) was 8.0%. The rental division performed well. The first aid and safety services business had double-digit year-over-year growth, with a gross margin of 57.7%. The fire protection services business also saw double-digit growth, with a gross margin of 50.2%. The uniform rental and facility services segment had a gross margin of 49.3%, while the uniform direct sale segment had a gross margin of 40.6% and experienced 1.8% organic growth decline.

• Raised annual revenue expectations from $10.16 billion - $10.31 billion to $10.22 billion - $10.32 billion, with a total growth rate of 6.5% - 7.5% and an organic growth rate of 7.0% - 8.1%. - Raised annual diluted EPS expectations from $4.06 - $4.19 to $4.17 - $4.25, with a growth rate of 10.0% - 12.1%.

• Competitive environment, including potential industry consolidation and competition from non-traditional players. - Impact of macroeconomic uncertainty on customer purchasing behaviors, though no significant changes have been seen yet.

Q: Can you talk a little bit about the overall selling environment and whether you're seeing any changes in customer purchasing behaviors in response to the overall macro environment and evolving macro uncertainty?

A: Todd Schneider stated that they haven't observed much change in customer behavior, and they still see strong demand from customers for their services to assist with image, safety, cleanliness, and compliance needs.

Q: You continue to highlight healthcare, hospitality, education, and government as key focus verticals. Can you talk a little bit more about traction you're seeing in those verticals and how growth and performance there compare versus the broader company?

A: Todd Schneider mentioned that those verticals were well-chosen, with investments made to holistically take care of customers, providing examples such as garment dispensing in the healthcare sector and privacy curtain solutions in healthcare.