Cintas Corporation (NASDAQ:CTAS) stock rose 1.25% (As on December 22, 11:11:19 AM UTC-4, Source: Google Finance) after the company has lifted its annual financial outlook after strong demand for the company’s rental work uniforms boosted income in the second quarter. Net profit jumped by 15.5% to $374.61 million. The company’s gross margin improved to 48.0% in the second quarter of fiscal 2024, up from 47.0% in the prior year’s quarter, an increase of 100 basis points. This margin expansion was partly due to a 40 basis point reduction in energy expenses, which include gasoline, natural gas, and electricity costs. Operating income for the quarter grew by 12.3% to $499.7 million, and net income increased by 15.5% to $374.6 million, compared to the same quarter last year.

CTAS in the second quarter of FY 24 has reported the adjusted earnings per share of $3.61, beating the analysts’ estimates for the adjusted earnings per share of $3.49. The company had reported the adjusted revenue growth of 9.3 percent to $2.38 billion in the second quarter of FY 24, beating the analysts’ estimates for revenue of $2.34 billion. This is on back of  in large part to a surge in sales at Cintas’s uniform rental and facility services unit. The organic revenue growth rate, which adjusts for acquisitions and foreign currency exchange rate fluctuations, was also strong at 9.0%

Additionally, on December 15, 2023, Cintas paid an aggregate quarterly cash dividend of $137.5 million to shareholders, an increase of 17.1% from the amount paid last December. In addition, the company continues to be opportunistic with the share buyback program. During the second quarter, Cintas purchased 658,202 shares of Cintas common stock at an average price of $486.58 per share, for a total purchase price of $320.3 million.

The company now expects to deliver full-year revenue of $9.48 billion to $9.56 billion, up from a prior guidance of $9.40B to $9.52B and versus the consensus of $9.5 billion. Diluted per-share earnings are also seen at $14.35 to $14.65, an improvement from the previous band of $14.00 to $14.45 and versus the consensus of $14.46. Fiscal year 2024 interest expense is expected to be approximately $100.0 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.