CINTAS CORP (CTAS) Q3 2025 Earnings Summary

Executive Summary

Q3 FY2025 delivered broad-based strength: revenue $2.61B (+8.4% YoY), gross margin a record 50.6%, operating margin 23.4%, and diluted EPS $1.13 (+17.7% YoY) . Versus S&P Global consensus, CTAS beat EPS ($1.13 vs $1.05*) and revenue ($2.609B vs $2.598B*) as organic growth reached 7.9% .
Full-year FY2025 guidance raised for EPS to $4.36–$4.40 and narrowed for revenue to $10.280–$10.305B; organic growth range raised to 7.4%–7.7% (FX headwind -0.4% in H2) .
Management emphasized sustainable margin drivers: sourcing, SAP-enabled process standardization, SmartTruck route optimization, and operational excellence across segments; Q3 operating margin ex $15M property sale was 22.8% (second highest in history) .
Tactical watch items: FX (Canadian dollar) headwind intensification in H2, one fewer Q4 workday (≈160 bps drag), Uniform Direct Sale softness (-2.3% organically), and tariff uncertainty (Mexico/China) .
Corporate development: on March 24 CTAS terminated discussions to acquire UniFirst ($275/share proposal), reaffirming focus on disciplined tuck-ins and technology investments .

What Went Well and What Went Wrong

What Went Well

Record profitability: “Gross margin… an all-time high” at 50.6% and “Operating income… 23.4%, which was also an all-time high,” reflecting sourcing and technology-enabled efficiencies .
Strong organic growth and segment performance: organic +7.9%; Uniform Rental +7%, First Aid +15%, Fire Protection +10.6% in Q3 .
Cash flow and capital allocation: YTD free cash flow $1.236B (+14.5% YoY), supporting reinvestment, tuck-ins across route-based segments, and dividends ($158.1M paid Mar 14, +14.9% YoY) .

What Went Wrong

FX headwinds intensified: Q3 revenue growth negatively impacted by 40 bps; H2 expected -40 bps (~$16M), pressuring reported growth vs organic .
Workday effects: two fewer workdays in FY2025; Q4 has one fewer day (~160 bps drag on total growth) .
Uniform Direct Sale softness: down 2.3% organically in Q3 despite sequential improvement; continued lumpiness noted in Q&A .

Financial Results

Consolidated Performance (quarterly)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$2,501.6	$2,561.8	$2,609.2
Gross Margin %	50.1%	49.8%	50.6%
Operating Margin %	22.4%	23.1%	23.4%
Net Income ($USD Millions)	$452.0	$448.5	$463.5
Diluted EPS ($USD)	$1.10	$1.09	$1.13
Organic Revenue Growth %	8.0%	7.1%	7.9%

Actual vs S&P Global Consensus

Metric	Q1 2025	Q2 2025	Q3 2025
EPS – Actual ($)	1.10	1.09	1.13
EPS – Consensus Mean ($)	1.00*	1.01*	1.05*
Revenue – Actual ($USD Millions)	2,501.6	2,561.8	2,609.2
Revenue – Consensus Mean ($USD Millions)	2,493.6*	2,563.4*	2,597.7*

Values marked with * retrieved from S&P Global.

Segment Breakdown (Q3 YoY comparison)

Segment ($USD Thousands)	Q3 2024	Q3 2025
Uniform Rental & Facility Services – Revenue	$1,876,642	$2,021,144
First Aid & Safety Services – Revenue	$262,602	$301,759
All Other – Revenue	$266,929	$286,256
Uniform Rental & Facility Services – Operating Income	$420,407	$489,483
First Aid & Safety Services – Operating Income	$57,717	$71,533
All Other – Operating Income	$42,676	$48,837

KPIs and Non-GAAP

KPI	Q3 2024	Q3 2025
Total Gross Margin %	49.4%	50.6%
Net Income Margin %	16.5%	17.8%
SG&A ($USD Thousands)	$667,048	$709,488
Operating Income ($USD Thousands)	$520,800	$609,853
Organic Revenue Growth %	—	7.9%
Free Cash Flow (YTD, $USD Thousands)	$1,079,183	$1,235,896

Notes: Operating margin was aided by a $15M property sale; adjusted operating margin 22.8% (second-highest in history) . Prior-year Q3 included a $15M settlement impacting SG&A .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue	FY2025	$10.255B–$10.320B	$10.280B–$10.305B	Narrowed; top-end -$15M (FX)
Organic Revenue Growth	FY2025	7.0%–7.7%	7.4%–7.7%	Raised low-end
Diluted EPS	FY2025	$4.28–$4.34	$4.36–$4.40	Raised
Net Interest Expense	FY2025	≈$101M	≈$100M	Lowered
Effective Tax Rate	FY2025	20.2%	20.2%	Maintained
FX impact (Revenue)	H2 FY2025	Assumed constant FX	~-0.4% or ~$16M headwind	Added FX headwind
Workdays	FY2025/Q4	2 fewer days FY; Q4 -1 day reminder	Reiterated Q4 -1 day (~160 bps drag)	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Technology & Efficiency (SAP, SmartTruck, myCintas)	SAP standardization and SmartTruck driving margin gains ; myCintas efficiencies highlighted	Continued leverage of SAP and SmartTruck; portal rollout progressing; Fire SAP deployment ongoing	Sustained execution tailwind
Supply Chain & Sourcing	Material cost tailwinds via sourcing; garment sharing reduces amortization	Sourcing and mix benefits across segments; <10% sole-sourced products	Positive, resilient
Tariffs/Macro	Monitoring proposed tariffs; amortization dampens P&L shock	Too early to quantify; diversified sourcing; monitoring April 2 announcements	Watch item; manageable
Pricing	Back to historical levels (0–2%) ; historical range affirmed	“Pricing is right at historic levels”; no change QoQ	Stabilized at historical
Workdays	FY2025 has 2 fewer workdays ; reiterated	Q4 -1 workday (~160 bps drag); annual ~80 bps drag	Ongoing reporting headwind
M&A	Active tuck-ins; pipeline across route segments	Q2 had sizable M&A; Q3 tuck-ins continued; UniFirst deal terminated	Focus on disciplined tuck-ins
FX	Guidance previously assumed constant FX	H2 FX headwind called out; Canadian FX highlighted	Negative reported impact

Management Commentary

“Gross margin… an all-time high. Operating income… an all-time high… Our strong earnings growth and profitability reflect our continued operational excellence via sourcing and supply chain initiatives, route and energy optimization and technology-enabled efficiency” — Todd Schneider, CEO .
“Adjusted for the gain on the property sale, operating margin… was 22.8%, the second highest in Cintas history” — Mike Hansen, CFO .
“We are raising our annual diluted EPS expectations from a range of $4.28 to $4.34 to a range of $4.36 to $4.40” — Todd Schneider, CEO .
On UniFirst: “We have terminated discussions… While we continue to believe in the merits of a transaction… we do not believe further discussions are warranted at this time” — Press release .

Q&A Highlights

Pricing normalization: Management reiterated pricing running at historical levels and unchanged from last quarter, despite a more uncertain macro backdrop .
Tariffs exposure: Too early to assess; diversified, dual-sourced supply chain with <10% sole-sourced items positions CTAS to pivot; amortization provides cost recognition smoothing .
FX/workday modeling: Q3 FX headwind ~40 bps; Q4 will see ~160 bps total growth drag from one fewer workday; organic growth ex-workday deceleration largely an arithmetic effect .
Energy/fuel costs: Energy and fuel were 1.7% of revenue in Q3, same as prior-year; Rental ~2% .
Free cash flow conversion: Historically 90–100% of net income; management expects similar going forward .
M&A cadence: Preference for tuck-ins across route-based segments; opportunistic buybacks; Q3 had no buybacks .

Estimates Context

Q3 FY2025 beats: EPS $1.13 vs $1.05* and revenue $2.609B vs $2.598B*, reflecting stronger organic growth and record margins .
Estimate trajectory: Q1 and Q2 were also above consensus on both revenue and EPS, indicating a consistent pattern of outperformance as margins expand (see table above) .
Implications: Street models likely need to lift FY EPS (management raised to $4.36–$4.40) and fine-tune Q4 cadence for FX and workday impacts; monitor organic growth trajectory into FY2026 given guidance color on tax rate and interest expense .