Zinger Key Points
- UniFirst Q1 adjusted EPS of $2.40 beats estimates, with revenue slightly below consensus at $604.91M.
- FY25 revenue guidance revised to $2.425B-$2.440B; EPS guidance maintained at $6.79-$7.19, aligning with estimates.
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UniFirst Corporation UNF shares are trading higher after the company reported first-quarter results.
Quarterly sales of $604.91 million missed the analyst consensus of $606.62 million.
UniFirst registered an operating income of $55.5 million, an increase of 4.5% year over year.
Adjusted EBITDA increased to $94.0 million from $88.7 million in the prior year. Adjusted EPS of $2.40 beat the consensus of $2.22.
UniFirst reported expenses of approximately $2.5 million in the quarter related to its key initiatives, including customer relationship management and enterprise resource planning projects. These items had a $0.09 effect in the first quarter.
UniFirst said its cash, cash equivalents, and short-term investments totaled $181.0 million as of November 30, with no long-term debt outstanding.
Outlook: UniFirst revised its FY25 revenue outlook to $2.425 billion – $2.440 billion from $2.425 billion – $2.445 billion, in line with the $2.434 billion estimate.
The company maintained its FY25 EPS guidance of $6.79 – $7.19, against the consensus of $7.67. This outlook continues to include an estimated $16.0 million of costs directly attributable to key initiatives that it anticipates will be expensed in fiscal 2025.
Yesterday, Cintas Corporation submitted a proposal to acquire all outstanding shares of UniFirst for $275 per share in cash.
This offer, which represents a 46% premium to UniFirst’s ninety-day average closing price as of January 6, 2025, values UniFirst at approximately $5.3 billion.
Meanwhile, UniFirst rejected the proposal, claiming it was not in the best interests of the company and its shareholders.
Investors can gain exposure to the stock via Brandes International ETF Brandes U.S. Small-Mid Cap Value ETF BSMC.
Price Action: UNF shares are trading higher by 4.09% at $213.07 at the last check Wednesday.
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