CINTAS CORP (CTAS) Q1 2026 Earnings Summary

Executive Summary

• Cintas delivered a clean Q1 FY26 beat and raise: revenue $2.72B (+8.7% YoY) and diluted EPS $1.20 (+9.1% YoY), with gross margin expanding 20 bps to 50.3% and operating margin to 22.7% (+30 bps) . Versus S&P Global consensus, revenue modestly beat ($2.72B vs $2.70B*) and EPS was slightly above ($1.20 vs $1.19*) (see Estimates table).
• Management raised FY26 guidance: revenue to $11.06–$11.18B (from $11.00–$11.15B) and EPS to $4.74–$4.86 (from $4.71–$4.85); assumptions include ~$97M net interest expense, 20% tax rate, constant FX, and no future buybacks .
• Route businesses all grew; First Aid & Safety posted strong double-digit organic growth (14.1%) with 56.8% gross margin; Fire is investing (SAP, capacity), creating near-term margin drag but supporting growth; uniform direct sale was down 9.2% (lumpy) .
• Capital returns continue: $347.4M in buybacks through Sep 23 and a 15.4% dividend increase ($0.45/sh) payable Sep 15; $182.3M dividend paid Sep 15 .

What Went Well and What Went Wrong

• What Went Well

  • Margin expansion and quality of earnings: gross margin to 50.3% (+20 bps YoY), operating margin to 22.7% (+30 bps YoY) on sourcing and process improvements; EPS +9.1% YoY .
  • First Aid & Safety strength: organic growth +14.1%; gross margin 56.8%, with investments supporting sustained double-digit growth .
  • Guidance raise amid uncertainty: “We are raising our fiscal 2026 financial guidance,” citing strong start and momentum; CEO: “Our ongoing investments continue to help drive revenue growth and expand margins” .

• What Went Wrong

  • Fire margin/investment drag: SAP rollout and growth investments pressured gross margin in Fire; management framed as timing and long-term positive .
  • Uniform direct sale softness: down 9.2% YoY; acknowledged as strategic but inherently “lumpy” (2.6% of revenue) .
  • Free cash flow declined YoY on working capital: CFO from operations $414.5M vs $460.4M YoY; FCF $312.5M vs $367.4M YoY .

Financial Results

Overall results trend vs prior two quarters and YoY:

Estimate comparison (S&P Global consensus vs actual):

• Note: Values marked with an asterisk (*) retrieved from S&P Global.

Segment performance (Q1 2026 vs Q1 2025):

Key operating and cash metrics:

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO Todd Schneider: “Our first quarter performance is a testament to the strength of our value proposition… We are raising our fiscal 2026 financial guidance” .
• COO Jim Rozakis on execution: Example conversion from DIY program to rental highlights outsourcing value (Carhartt high-visibility apparel), delivering compliance and predictable budgeting .
• CFO Scott Garula on capital and guide: Q1 operating income $617.9M (22.7% margin); cash from ops $414.5M; EPS guide assumes ~$97M net interest, 20% tax rate, constant FX, no buybacks .
• CEO on technology: Investments in SAP/AI/LLMs aimed at easier customer interactions and higher partner productivity (SmartTruck, MyCintas) .

Q&A Highlights

• Demand and selling environment: Sales cycles unchanged; retention strong; value prop can strengthen in uncertainty; conversion of “no programmers” ongoing .
• Fire & First Aid margins: Fire margin impacted by SAP and growth investments (timing); First Aid gross margin 56.8%, sequentially flat; low double-digit growth expected LT .
• Guidance cadence: Management noted implied growth in Q2–Q4 above opening guide; incrementals targeted in 25–35% range, with margin expansion .
• Tariffs: Headwinds managed via supplier diversity, purchasing power, and process efficiency; guidance reflects current tariff environment .
• Capital allocation/M&A: Active tuck-ins across three route-based businesses; pipeline healthy; 4% capex target reiterated .

Estimates Context

• Q1 FY26 actuals vs S&P Global consensus: revenue $2.72B vs $2.70B* and EPS $1.20 vs $1.19* — modest beats driven by broad-based route growth and margin execution. Given the raise in FY26 revenue and EPS ranges, consensus for out-quarters likely moves up, particularly for Q2–Q4 where implied growth is higher than initial outlook .
• Note: Values marked with an asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

• Quality beat-and-raise: modest top-line and EPS beats, plus a higher FY26 range, should support positive estimate revisions and sentiment. Margin expansion continues with gross margin >50% and operating margin +30 bps YoY .
• Broad-based growth: Uniform Rental & Facility Services steady; First Aid & Safety accelerating at double digits with best-in-class gross margin; Fire in investment mode that may cap near-term margin but builds capacity .
• Execution in uncertainty: Retention solid; sales cycles stable; ability to convert DIY customers provides a counter-cyclical growth lever .
• Capital returns intact: $347M buybacks in Q1-to-date and a 15.4% dividend increase highlight continued shareholder-friendly posture .
• Watch items: Fire SAP investment timing and uniform direct sale lumpiness; working capital impacted FCF this quarter—monitor normalization as growth progresses .
• Stock catalysts: Continued margin expansion, sustained First Aid growth, and any incremental FY26 guidance raises; disciplined M&A and steady capex (~4% of sales) support durable compounding .

Sources

• Q1 FY26 press release and 8-K (financials, segment data, guidance):
• Q1 FY26 earnings call transcript (prepared remarks and Q&A):
• Prior quarters for trend: Q4 FY25 8-K/press release ; Q3 FY25 8-K/press release
• Dividend increase press release: