Cintas Raises Fiscal 2027 Outlook After Record Margin
Organic revenue growth reached 8.9% and gross margin hit a record 51.5% of sales in the quarter ended Aug. 31, 2026.
Cintas Corporation (CTAS), the uniform and facility-services company, posted $3.01 billion of revenue in the fiscal 2027 first quarter ended Aug. 31, 2026, up 10.9% from a year earlier, a faster pace than the 8.9% increase recorded in the fiscal 2026 fourth quarter.
Organic revenue growth, which strips out acquisitions, currency and workday differences, was 8.9%, compared with 8.4% in the immediately preceding quarter. Chief Executive Officer Todd M. Schneider said employee-partners produced record revenue and a record operating margin, and that the organic rate and record gross margin reflected investments in technology, capacity and talent.
Gross margin was $1.55 billion, or 51.5% of revenue, up 120 basis points from a year earlier and above the 51.0% all-time high of the fiscal 2026 fourth quarter. Operating income rose 15.2% to $711.9 million, faster than the 12.7% increase in the prior quarter, and operating margin was 23.6%. Results included $14.4 million of transaction expenses related to the proposed UniFirst Corporation acquisition.
Uniform rental and facility services, the largest line, generated $2.29 billion of revenue, up 9.7% from a year earlier, with gross margin of 50.8%. Other revenue was $719.2 million, up 14.7%, with gross margin of 53.9%. On a segment basis, uniform rental and facility services operating income was $575.1 million, first aid and safety services operating income was $99.5 million, and all other operating income was $51.7 million. Corporate recorded a $14.4 million loss equal to the UniFirst transaction expenses.
Net income was $551.7 million, up 12.3% from a year earlier. Diluted earnings were $1.36 a share. Excluding the UniFirst transaction expenses, which reduced diluted EPS by $0.03, adjusted diluted EPS was $1.39, up 15.8%. The effective tax rate was 20.0%, compared with 17.6% a year earlier; the company said both periods were affected by discrete items, primarily the tax accounting impact of stock-based compensation.
Free cash flow was $464.8 million, up from $312.5 million a year earlier, after $572.3 million of operating cash flow and $107.5 million of capital expenditures. Cash and cash equivalents were $243.6 million at Aug. 31, 2026.
During the fiscal 2027 first quarter and through Sept. 22, 2026, Cintas spent $544.7 million on share repurchases. On Sept. 15, 2026, it paid a quarterly dividend of $208.8 million.
Schneider said the company continues to engage with the U.S. Federal Trade Commission as it reviews the UniFirst transaction and expects the deal to close before the end of calendar 2026. He said Cintas is raising full fiscal 2027 guidance: annual revenue to a range of $12.15 billion to $12.27 billion from $12.10 billion to $12.25 billion, and adjusted diluted EPS to $5.45 to $5.54 from $5.36 to $5.50.
The updated revenue range implies growth of 7.9% to 8.9% versus fiscal 2026 revenue of $11.26 billion. Workday-adjusted revenue growth is 7.4% to 8.5%. Guidance excludes expected impacts from UniFirst, assumes no future acquisitions and a constant foreign-exchange rate, and reflects one more workday in fiscal 2027 than in fiscal 2026. Adjusted diluted EPS guidance excludes UniFirst transaction costs, which cannot be reasonably estimated.
Interest, net, is expected to be about $103.0 million in fiscal 2027 versus $101.2 million in fiscal 2026, primarily from amortization of bridge-loan financing expenses related to UniFirst. The expected effective tax rate is 20.4%.