UniFirst Corp (UNF), one of the leading providers of uniforms and work clothing in the U.S. has done very well over the past decade in terms of increasing its customer base and, as a result, its revenue. With a solid history of earnings and revenue growth, and an excellent balance sheet, UniFirst may be worth a look, and I feel that shares offer tremendous value at their current level.
UniFirst operates its business in five segments. U.S. and Canadian Rental and Cleaning sells, rents, cleans, and delivers a variety of uniforms and protective clothing to UniFirst’s more than 225,000 customers. The products rented and sold are designed and manufactured by UniFirst in-house through the Manufacturing segment. The Corporate segment consists of the administrative aspects of running the company. Specialty Garments provides cleaning and such services as decontamination for specially designed work clothes, like those designed to be exposed to radioactivity. Finally, the First Aid segment sells and stocks first aid cabinets for workplaces.
The uniform business is a competitive one, and although there are a lot of companies that provide these services, the “big four” are responsible for more than 40% of the rental and sales market. Aside from UniFirst, the largest uniform companies (in order) are Aramark, which is a privately-held company, Cintas (CTAS), and G&K Services (GK).
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