Uniform and facility services provider Cintas (NASDAQ: CTAS) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 8.7% year on year to $2.72 billion. On the other hand, the company’s full-year revenue guidance of $11.12 million at the midpoint came in 99.9% below analysts’ estimates. Its GAAP profit of $1.20 per share was in line with analysts’ consensus estimates.

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Todd M. Schneider, Cintas' President and Chief Executive Officer, stated, “In the first quarter, we achieved strong revenue growth, along with healthy margin expansion, reflecting our disciplined execution, ongoing investment in technology and talent, and the unwavering commitment of our employee-partners. Our results reflect the strength of our value proposition and demonstrate the value we deliver to customers across all segments.

Company Overview

Starting as a family business collecting and cleaning shop rags in Cincinnati, Cintas (NASDAQ: CTAS) provides corporate identity uniforms, facility services, and safety products to over one million businesses across North America.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.

With $10.56 billion in revenue over the past 12 months, Cintas is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions.

As you can see below, Cintas’s sales grew at a solid 8.5% compounded annual growth rate over the last five years. This is a good starting point for our analysis because it shows Cintas’s demand was higher than many business services companies.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Cintas’s annualized revenue growth of 8.4% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong.

This quarter, Cintas reported year-on-year revenue growth of 8.7%, and its $2.72 billion of revenue exceeded Wall Street’s estimates by 0.9%.

Looking ahead, sell-side analysts expect revenue to grow 7% over the next 12 months, similar to its two-year rate. We still think its growth trajectory is satisfactory given its scale and implies the market sees success for its products and services.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Cintas has been a well-oiled machine over the last five years. It demonstrated elite profitability for a business services business, boasting an average operating margin of 21.2%.

Looking at the trend in its profitability, Cintas’s operating margin rose by 3.2 percentage points over the last five years, as its sales growth gave it operating leverage.

This quarter, Cintas generated an operating margin profit margin of 22.7%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Cintas’s EPS grew at an astounding 15.9% compounded annual growth rate over the last five years, higher than its 8.5% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Cintas’s earnings quality to better understand the drivers of its performance. As we mentioned earlier, Cintas’s operating margin was flat this quarter but expanded by 3.2 percentage points over the last five years. On top of that, its share count shrank by 4.5%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Cintas, its two-year annual EPS growth of 16.3% is similar to its five-year trend, implying strong and stable earnings power.

In Q3, Cintas reported EPS of $1.20, up from $1.10 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects Cintas’s full-year EPS of $4.52 to grow 10.6%.

Key Takeaways from Cintas’s Q3 Results

It was good to see Cintas narrowly top analysts’ revenue expectations this quarter. On the other hand, its full-year revenue guidance missed and its full-year EPS guidance fell slightly short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 3.3% to $194 immediately after reporting.

Cintas’s earnings report left more to be desired. Let’s look forward to see if this quarter has created an opportunity to buy the stock. If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.