Cintas Corporation (CTAS) had a good Thursday, with shares climbing after the company delivered exactly what investors want to see: beats across the board and an upgraded outlook for the year ahead.
The uniform and facility services provider reported second-quarter earnings of $1.21 per share, nudging past the analyst consensus estimate of $1.20. More impressively, quarterly sales hit $2.80 billion, marking 9.3% growth year over year and clearing the Street's expectation of $2.766 billion.
The Numbers Behind the Beat
Revenue growth got a modest boost from acquisitions, which contributed about 0.7% to the topline expansion. But the real story is in the margins, which tell you how well a company is actually running its business.
Gross margin for the quarter came in at $1.41 billion, up 10.6% from $1.28 billion in the same period last year. As a percentage of revenue, gross margin expanded to 50.4% from 49.8% a year earlier, a 60 basis point improvement that suggests Cintas is getting more efficient at what it does.
Operating income rose 10.9% year over year to $655.7 million, with operating margin ticking up to 23.4% from 23.1% in the prior-year period. The company closed the quarter with $200.842 million in cash and equivalents.
There's one wrinkle worth noting: Cintas recorded a $15 million gain from selling some land in the third quarter of fiscal 2025. That's nice money, but it's a one-time thing that won't repeat in fiscal 2026, creating a year-over-year headwind when the third quarter rolls around.
Looking Ahead
The company clearly feels good about its trajectory because it raised guidance across the board. Cintas now expects fiscal 2026 GAAP earnings per share of $4.81 to $4.88, up from its prior range of $4.74 to $4.86. The analyst consensus sits at $4.85, right in the middle of that new range.
On the revenue side, management lifted its fiscal 2026 forecast to $11.150 billion to $11.220 billion from $11.060 billion to $11.180 billion. Wall Street was expecting $11.151 billion, so the new guidance gives them a bit more upside to work with.
CTAS Price Action: Cintas shares were up 2.50% at $192.05 at the time of publication on Thursday.