UniFirst Corp.’s (UNF) fiscal third-quarter profit surprisingly rose 28% as cost cuts, including lower energy prices, continued to lift core laundry operating margins at the provider of uniforms and protective clothing for industrial workers.
But President and Chief Executive Ronald Croatti expects revenue to remain crimped even after the economy rebounds and reiterated that cost control will continue to be a “top priority.”
“We anticipate that even when general economic conditions improve, our customers will be hesitant to increase employee levels too quickly and as a result it will take us longer to recover the uniform wearers that we have lost,” Croatti said.
Amid widespread layoffs, the reduction in uniform wearers has hurt UniFirst’s sales growth. The company cut jobs as part of a stepped-up cost-control plan in February.
For the quarter ended May 30, UniFirst reported earnings of $21.7 million, or $1.12 a share, up from $16.9 million, or 87 cents a share, a year earlier. Revenue slipped to $252.1 million from $254.6 million.
Analysts were expecting earnings of 74 cents a share on revenue of $247 million.
Operating margins at the company’s core laundry operations rose to 14.9% from 12.3% on the cost reductions.
Shares recently rose 12.4% to $41.79. The stock is up about 41% this year.
Source: Dow Jones Newswire, July 1, 2009
