What Happened?
Shares of workplace uniform provider UniFirst (NYSE: UNF) fell 5.9% in the afternoon session after the company released disappointing financial guidance for its 2026 fiscal year, which overshadowed its fourth-quarter results.
Although the workwear and uniform specialist's quarterly revenue and earnings topped analyst estimates, the figures represented a decline from the same period in the previous year. Revenue fell to about $614 million from nearly $640 million, and net income also slipped. The primary concern for investors was the company's forecast. Management's projections for both revenue and earnings per share in fiscal 2026 came in below what analysts had anticipated. The company pointed to challenges including a softer job market, margin pressures, and the effects of tariffs. In response to the report and outlook, a Barclays analyst lowered the firm's price target on the stock from $152.00 to $145.00.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy UniFirst? Access our full analysis report here.
What Is The Market Telling Us
UniFirst’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 6.3% on the news that the company's better-than-expected third-quarter results were overshadowed by a disappointing full-year financial outlook. For the third quarter, UniFirst reported revenue of $614.4 million and earnings per share (EPS) of $2.23, both beating Wall Street's estimates. Despite the beat, revenue still fell 4% year on year. The main cause for concern among investors was the company's forward guidance. UniFirst's full-year revenue forecast of $2.49 billion at the midpoint fell short of expectations, and its EPS guidance of $6.78 at the midpoint missed consensus estimates by a significant 20.9%. The market's sharp, negative reaction indicated that investors weighed the weak forecast more heavily than the quarterly outperformance.
UniFirst is down 8.3% since the beginning of the year, and at $156.22 per share, it is trading 32.2% below its 52-week high of $230.50 from January 2025. Investors who bought $1,000 worth of UniFirst’s shares 5 years ago would now be looking at an investment worth $916.59.
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