UniFirst Corporation Q2 FY2025 earnings call

• Second quarter consolidated revenues up 1.9% y-o-y, 2.3% organic. Operating income up 11.7%, adjusted EBITDA up 6.3%. • Invested in people, technology, infrastructure to support growth and profitability. • Progress in operational execution and margin enhancement despite modest growth. • Positive trends in sales, new business installations, national account relationships. • KPIs like contract renewals and NPS trending favorably. • Invested in Owensboro distribution center expansion. • New COO focusing on UniFirst Way for consistent customer experience. • Profit improvement opportunities in pricing, procurement, etc. • ERP system and technology investments as foundational for future benefits.

Consolidated revenues were $602.2 million. Core Laundry operations: Revenues $530.4 million, +1.5% y-o-y, organic growth 1.9%. Operating margin 4.6% ($24.3M), adjusted EBITDA margin 11.2%. Specialty Garments: Revenues $44.4 million, +2.2%, operating margin 16.7% (down from 22.8% prior year). First Aid: Revenues $27.5 million, +10.6%, nominal operating loss of $0.5M due to investments in van operations.

• Fiscal 2025 revenues expected $2.422B - $2.432B, reflecting Canadian dollar impact. • Diluted EPS expected $7.30 - $7.70, improved core laundry margins, key initiative costs revised down to ~$12M. • No impact of tariffs built into guidance yet.

• Uncertainty around tariffs and potential impact on costs. • Competition and sensitivity of customers to price adjustments. • Seasonality and project timing impact on Specialty Garments segment.

Q: Could you remind us how you plan on achieving equivalent value creation as the Cintas offer on a standalone basis?

A: We aim for top-line mid-single digits growth and EBITDA margins in high teens. Tech investments will enable benefits, with ERP full deployments likely in fiscal 2027.

Q: Any impact on the business from tariffs?

A: No specific impact built into guidance due to uncertainty; we have confidence in pivoting to minimize impact.

Q: On pricing for existing customers and new competition?

A: Customers were more sensitive to price adjustments as inflation moderated, new account pricing remains competitive but we're successful on sales side.

Q: Excluding key initiative costs, how did you raise full-year EPS guide?

A: Primarily due to improvements in core laundry margins; other segments' guidance largely unchanged.

Q: Where do UniFirst Net Promoter Scores stand?

A: Not providing specific scores yet, but they're improving and correlate with staffing stability and retention.