Cintas Corp (NASDAQ:CTAS), a leading provider of corporate uniforms and facility services, stock fell 0.36% (As on March 28, 11:05:54 AM UTC-4, Source: Google Finance) after the company reported better-than-expected third-quarter financial results and raised FY24 guidance. On March 15, 2024, Cintas paid an aggregate quarterly cash dividend of $137.6 million to shareholders, an increase of 17.1% from the amount paid last March. The company has generated robust free cash flow of $1.079 billion for the nine months ended February 29, 2024, which underscores the company’s strong cash generation capabilities.
CTAS in the third quarter of FY 24 has reported the adjusted earnings per share of $3.84, beating the analysts’ estimates for the adjusted earnings per share of $3.59. The company had reported the adjusted revenue growth of 9.9 percent to $2.41 billion in the third quarter of FY 24, beating the analysts’ estimates for revenue of $2.39 billion. This growth is attributed to a robust organic revenue growth rate of 7.7%, carefully adjusted for acquisitions, foreign currency exchange rate fluctuations, and the number of workdays.
Additionally, the company saw a remarkable 14.9% increase in gross margin, rising to $1.19 billion from last year’s $1.03 billion. This increment pushed the gross margin percentage to 49.4%, up from 47.2%, demonstrating a significant improvement in operational efficiency and cost management. Operating income also saw a significant uptick, increasing by 16.6% to reach $520.8 million, compared to $446.8 million in the same quarter of the previous year. This rise reflects an operating margin of 21.6%, a notable increase from 20.4%. Net income surged by an impressive 22.0%, at $397.6 million, up from $325.8 million year-over-year.
Cintas Corp. sees FY2024 EPS to be in the range of $14.80-$15.00, versus the consensus of $14.61. Cintas Corp. sees FY2024 revenue to be in the range of $9.57-9.6 billion, versus the consensus of $9.56 billion. Fiscal year 2024 interest expense is expected to be approximately $99.0 million compared to $109.5 million in fiscal year 2023, predominately as a result of less variable rate debt. This may change as a result of future share buybacks or acquisition activity. Fiscal year 2024 effective tax rate is expected to be 20.6% compared to a rate of 20.4% in fiscal year 2023.