Cintas Corporation reported financial results for the fourth quarter and full year of fiscal 2026, with total revenue increasing by 8.9% to $2.91 billion for the quarter and $11.26 billion for the year. The company reported adjusted diluted earnings per share of $1.29, beating the analyst consensus estimate of $1.24. This represents an 18.35% increase over earnings of $1.09 per share from the same period last year. Quarterly sales of $2.905 billion surpassed the analyst consensus estimate of $2.873 billion. The company achieved a gross margin of 51% in Q4, matching an all-time high, and an operating income increase of 12.7% over the prior year. Cintas provided a positive outlook for fiscal 2027, expecting revenue between $12.1 billion and $12.25 billion, and adjusted diluted EPS growth of 8.5% to 11.3%. Following the announcement, Cintas shares rose 2.9% to $197.89 in pre-market trading, and analysts at B of A Securities and Baird raised their price targets.

Financial Performance

In the fourth quarter, total revenue increased 8.9% to $2.91 billion. Organic revenue growth, which adjusts for acquisitions and foreign currency, was 8.4%. Gross margin for the fourth quarter was 51%, up approximately 130 basis points from the prior year. Operating income as a percent of revenue was 23.2% and grew to $673 million, an increase of 12.7% over the prior year. Adjusted operating income as a percent of revenue was 23.6%, representing a year-over-year increase of roughly 120 basis points.

For the full year 2026, revenue was approximately $11.26 billion, an 8.9% increase over fiscal 2025. Organic revenue growth was 8.3% for the year. Gross margin for the year was 50.7%, up 70 basis points from the prior year. Fiscal 2026 operating margin reached 23.1%. Adjusted operating margin was 23.3%, expanding by 50 basis points compared to fiscal 2025. Adjusted diluted earnings per share for the year were $4.94, up 12.3% versus $4.40 last year.

Segment Performance

Cintas highlighted growth across its business segments in the fourth quarter. Organic growth by business was 7.9% for uniform rental facility services, 13.2% for first aid and safety services, 10.7% for fire protection services, and uniform direct sale decreased by 4%. Gross margin percentage by business in the fourth quarter was 50.2% for uniform rental and facility services, 57.9% for first aid and safety services, 50.8% for fire protection services, and 42% for uniform direct sale.

Fiscal 2027 Outlook

Looking ahead to fiscal 2027, Cintas expects revenue in the range of $12.1 billion to $12.25 billion, implying total growth of 7.4% to 8.7%. The company expects fiscal 2027 adjusted diluted EPS between $5.36 and $5.50, which represents 8.5% to 11.3% growth. Fiscal 2027 will have one more workday than 2026, positively impacting total growth by about 40 basis points. The guidance assumes a constant foreign currency exchange rate and anticipates interest expense net to be around $105 million. The effective tax rate for fiscal 2027 is expected to be similar to the fiscal 2026 rate of 20.2%.

Analyst Reactions

B of A Securities analyst Curtis Nagle upgraded the stock from Neutral to Buy and raised the price target from $200 to $230. Baird analyst Andrew Wittmann maintained the stock with an Outperform rating and boosted the price target from $200 to $214.

Capital Allocation

Cintas returned significant capital to shareholders during fiscal 2026. The company returned $1.7 billion to shareholders via dividends and share repurchases. In the fourth quarter, the company generated $709.1 million in operating cash flow, made capital expenditures of $96 million, and completed acquisitions totaling $61.9 million. For the full year, capital expenditures were $395.1 million, representing 3.5% of revenue, and acquisitions totaled $164.5 million.

Baird analyst Andrew Wittmann has maintained an Outperform rating on Cintas (NASDAQ: CTAS) and increased the price target to $214, up from the previous $200. The adjustment reflects a revised outlook on the company's stock performance.

The rating affirmation and price target adjustment were issued by Wittmann in a recent note. Cintas operates in the corporate identity uniform and facility services sector.