3Q Uniform Rental Sentiment Survey points to improved revenue and pricing outlook

Our 3Q Uniform Rental Sentiment Survey, which provides a rolling six-month outlook across multiple dimensions of the industry, indicates that respondents expect revenue growth of 5.6% y/y on average, up from 4.7% in our 2Q survey. Respondents cited new customer wins, cross-sell/upsell and pricing as the leading revenue growth drivers, with pricing expectations increasing to 3.6% y/y from 2.2% in 2Q. Labor cost growth expectations increased modestly to 3.3% y/y, while fuel cost growth expectations rose sharply to 6.3% y/y from 1.8% in 2Q. Respondents also reported more cautious US macro and industry outlooks, although the business outlook remained net positive and customer and wallet retention expectations were stable to modestly improved. We continue to expect Buy-rated CTAS to outgrow the broader industry through market share gains and more effective penetration of the unvended market, supporting approximately 7-8% y/y organic revenue growth over the next six months, while we remain c