Why Cintas Stock Popped Today


Shares of Cintas (CTAS 8.25%) were among the winners today after the uniform rental specialist posted better-than-expected results in its third-quarter earnings report and raised its guidance for the full year.

As a result, the stock finished the day up 8.3% and gained as much as 11% during the trading session.

A woman scanning boxes in a warehouse

Image source: Getty Images.

Cintas pleases the market

Cintas said revenue in the quarter rose 9.9% to $2.41 billion, and organic revenue, which excludes the impact of acquisitions, currency exchange, and changes in the number of workdays, was up 7.7%. That beat estimates at $2.39 billion.

Gross margin improved by 220 basis points to 49.4% in part due to lower energy costs. Operating income was also up substantially, rising 16.6% to $520.8 million for an operating margin of 21.6%.

Earnings per share jumped 22% to $3.84, topping the consensus at $3.58.

CEO Todd Schneider said, “Each of our operating segments continues to execute at a high level,” and said the company was raising its full-year guidance based on the strong results.

Cintas sees a brighter future

Looking ahead, the company raised its full-year revenue guidance from $9.48 billion to $9.56 billion to $9.57 billion to $9.60 billion, and it also hiked EPS guidance from $14.35 to $14.65 to $14.80 to $15.00.

Cintas stock trades at a premium, but the company is the leader in its industry and has a long track record of growth, delivering huge returns to early investors.

With better-than-expected results and expanding margins, it’s not surprising to see the stock moving higher today.



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