Profitability for Cintas Corp. (Cincinnati) also jumped in its most recent fiscal quarter, ended May 31, rising to more than $55 million compared with about $4 million last year. In 2009, the company incurred a restructuring, fixed asset impairment and inventory valuation charge. It involved right-sizing the company’s operating capacity, severance associated with position eliminations, increased inventory reserves, and other related charges.
UniFirst Corp. (Wilmington, Mass.) will soon report results for its current quarter. Its profits for the three months ended May 30 were about $19 million, down roughly $2 million from the same time last year. But they were up about $3 million from the previous quarter.
Compared with the same time in 2009, among the three companies, UniFirst has the most impressive revenue growth (3.6 percent) and share value rise (almost 5 percent). Cintas’ revenues and stock price have both risen about 3.5 percent.
The most recent TRS Tracker put the three companies’ combined share value at $89.19, up from $88.64 this June 30 and $86.22 in August 2009. UniFirst’s value (about $41) lost nearly $3 over the past month and a half while Cintas ($27) gained almost $3 and G&K ($21) picked up 70 cents. The TRS Tracker’s share component provides a general indication of shareholder value in the industry, but does not represent a complete portrayal because outstanding shares are not factored into the calculation.
Historically, the uniform rental industry has grown impressively as the U.S. labor force has expanded. More jobs usually means more professionally laundered work garments are needed. But a substantial bump in the working population may not materialize for some time. Scott Farmer, Cintas CEO, has forecast that “U.S. private sector job recovery will be sluggish and the return to pre-recession employment levels will take time.”
This almost guarantees that uniform rental companies will continue to look to products other than garments—such as linens, towels, floor mats, and restroom supplies—to fuel sales increases. On Cintas’ behalf, Farmer noted, “We will not rely only on job creation for growth.
