Cintas's (NASDAQ:CTAS) Q2 Sales Top Estimates But Full-Year Sales Guidance Misses Expectations

Uniform and facility services provider Cintas (NASDAQ:CTAS) reported revenue ahead of Wall Street’s expectations in Q2 CY2025, with sales up 8% year on year to $2.67 billion. On the other hand, the company’s full-year revenue guidance of $11.08 million at the midpoint came in 99.9% below analysts’ estimates. Its GAAP profit of $1.09 per share was 1.9% above analysts’ consensus estimates.

Is now the time to buy Cintas? Find out by accessing our full research report, it’s free.

Company Overview

Starting as a family business collecting and cleaning shop rags in Cincinnati, Cintas (NASDAQ:CTAS) provides corporate identity uniforms, facility services, and safety products to over one million businesses across North America.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.

With $10.34 billion in revenue over the past 12 months, Cintas is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions.

As you can see below, Cintas grew its sales at a solid 7.9% compounded annual growth rate over the last five years. This is a good starting point for our analysis because it shows Cintas’s demand was higher than many business services companies.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Cintas’s annualized revenue growth of 8.3% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong.

This quarter, Cintas reported year-on-year revenue growth of 8%, and its $2.67 billion of revenue exceeded Wall Street’s estimates by 1.6%.

Looking ahead, sell-side analysts expect revenue to grow 6.7% over the next 12 months, a slight deceleration versus the last two years. We still think its growth trajectory is satisfactory given its scale and suggests the market sees success for its products and services.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.

Operating Margin

Cintas has been a well-oiled machine over the last five years. It demonstrated elite profitability for a business services business, boasting an average operating margin of 21.1%.

Looking at the trend in its profitability, Cintas’s operating margin rose by 3.4 percentage points over the last five years, as its sales growth gave it operating leverage.

In Q2, Cintas generated an operating margin profit margin of 22.4%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Cintas’s EPS grew at an astounding 16.6% compounded annual growth rate over the last five years, higher than its 7.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Cintas’s earnings to better understand the drivers of its performance. As we mentioned earlier, Cintas’s operating margin was flat this quarter but expanded by 3.4 percentage points over the last five years. On top of that, its share count shrank by 3.6%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

In Q2, Cintas reported EPS at $1.09, up from $1.00 in the same quarter last year. This print beat analysts’ estimates by 1.9%. Over the next 12 months, Wall Street expects Cintas’s full-year EPS of $4.41 to grow 9.7%.

Key Takeaways from Cintas’s Q2 Results

It was encouraging to see Cintas beat analysts’ revenue expectations this quarter. We were also happy its EPS outperformed Wall Street’s estimates. On the other hand, its full-year revenue guidance missed and its full-year EPS guidance fell slightly short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 1.2% to $211.39 immediately following the results.

Cintas underperformed this quarter, but does that create an opportunity to invest right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.