Cintas Corp: Robust Growth Highlights Strong Fundamental Quarter

CTAS shares down ~3% despite a clean beat and raise quarter, a surprising reaction to us which we chalk up to rates and a weak broader market. Fundamentally, CTAS organic growth of +8.9% exceeded our +8.0% estimate (buyside likely around ~8.4% per our conversations), and 37% incremental margins (~33% ex. extra day) were also ahead of expectations. CTAS raised F2027 revenue/EPS guides by magnitudes consistent with typical raises in FQ1. Overall it was a very robust, Cintas-like quarter as we raise F2027/F2028 EPS estimates by ~1.5%. There will be focus on the UniFirst transaction in the coming months, but from a fundamental operational perspective, FQ1 was quite strong. Remain buyers. Adjusted EPS was $1.39, above consensus of $1.35 and UBSe of $1.38. Revenue was $3.01B, above consensus and UBSe of $2.98B, increasing +10.9% yoy with organic days-adjusted revenue of +8.9%. Adjusted EBIT was $726m, above consensus of $697m and UBSe of $710m, with adjusted EBIT margin of 24.1% (up 140bps y