Cintas Corporation has announced its financial results for the fiscal 2025 second quarter, which ended on November 30, 2024. The company achieved remarkable performance metrics, underscoring its strong operational execution and ability to deliver value to both customers and shareholders.
Revenue Growth and Organic Performance
For the fiscal 2025 second quarter, Cintas reported revenue of $2.56 billion, a 7.8% increase compared to the $2.38 billion reported in the same quarter last year. Excluding the impacts of acquisitions and fluctuations in foreign currency exchange rates, the organic revenue growth rate was 7.1%, demonstrating the company’s strong core business performance.
Todd M. Schneider, Cintas’ President and Chief Executive Officer, highlighted the significance of these results:
“Cintas delivered strong results in the second quarter, with robust year-over-year revenue and earnings growth, excellent margin expansion, and strong cash generation. Our results reflect the exceptional execution of our employee-partners and the comprehensive value proposition we provide to our customers in supporting their image, safety, cleanliness, and compliance needs.”
Improved Margins and Operating Income
Gross margin for the second quarter increased by 11.8%, reaching $1.28 billion compared to $1.14 billion in the prior year. Gross margin as a percentage of revenue rose to 49.8%, up 180 basis points from the previous year’s 48.0%. Lower energy costs, including gasoline, natural gas, and electricity, contributed to this margin improvement, reducing expenses by 20 basis points compared to last year’s second quarter.
Operating income also saw substantial growth, increasing by 18.4% to $591.4 million, compared to $499.7 million in the prior year. Operating income as a percentage of revenue rose to 23.1%, an improvement from 21.0% in last year’s second quarter.
Earnings Growth and Tax Efficiency
Net income for the quarter was $448.5 million, a 19.7% increase from $374.6 million in the prior year. Diluted earnings per share (EPS) rose by 21.1% to $1.09, compared to $0.90 in the second quarter of fiscal 2024. These EPS figures reflect the impact of a four-for-one stock split completed on September 11, 2024.
The effective tax rate for the second quarter was 20.7%, a slight improvement from 20.9% in the same period last year. Both periods were influenced by discrete tax items, including the tax accounting impact of stock-based compensation.
Shareholder Returns and Dividend Growth
Cintas continues to prioritize returning value to shareholders. On December 13, 2024, the company paid a quarterly dividend of $158.0 million, representing a 14.9% increase over the dividend paid in December of the previous year. This growth reflects the company’s strong financial position and its commitment to sharing success with its shareholders.
Updated Fiscal 2025 Guidance
In light of its strong second-quarter performance, Cintas has updated its annual revenue and earnings guidance for fiscal 2025. The company now expects annual revenue to range between $10.255 billion and $10.320 billion, a slight increase from the previous range of $10.220 billion to $10.320 billion. Additionally, diluted EPS guidance has been revised upward to a range of $4.28 to $4.34, compared to the earlier projection of $4.17 to $4.25.
CEO Todd Schneider expressed confidence in the company’s future:
“We believe that Cintas’ differentiated culture, superior products and services, and industry-best talent continue to position us to deliver meaningful value creation in fiscal 2025 and beyond.”
Delivering Value Through Innovation and Execution
Cintas’ fiscal 2025 second-quarter results reflect the company’s focus on operational excellence and its ability to adapt and thrive in dynamic market conditions. By delivering exceptional service and innovative solutions to its customers, Cintas continues to enhance its leadership position in the industry while driving sustained growth and value for its stakeholders.
As Cintas progresses through fiscal 2025, its strategic initiatives and commitment to excellence are expected to yield continued strong results, setting the stage for long-term success and enhanced shareholder value.
