Cintas Corporation (CTAS) FY2026 10-K and Q1 FY2027 10-Q Summary

Business

From the fiscal 2026 Form 10-K, accession 0000723254-26-000028.

Cintas rents, cleans and services work uniforms and facility items such as mats, mops, shop towels and restroom supplies, and sells first aid and safety, workplace water and fire protection products and services. It serves more than one million businesses, from small service and manufacturing companies to large corporations, mainly in the United States, plus Canada and Latin America. More than 95% of revenue comes from fees for route servicing performed by Cintas employees at the customer's place of business. No single customer accounts for more than 1% of revenue. U.S. operations produce over 90% of revenue, and most foreign revenue is in Canada. Fiscal 2026 revenue was $11.26 billion.

Cintas reports two segments, with the rest of the business in All Other:

• Uniform Rental and Facility Services: $8,621.6 million in fiscal 2026, about 76.5% of revenue. This segment rents and services uniforms and other garments, including flame-resistant clothing, mats, mops, shop towels and other items. It also includes restroom cleaning services and supplies, and catalog items sold to customers on route.
• First Aid and Safety Services: $1,391.9 million, about 12.4% of revenue. This covers first aid and safety products and services, including AEDs, eye-wash stations and safety training, as well as workplace water services. It has the highest margins of the reported businesses (57.7% gross margin and 25.4% operating margin in fiscal 2026).
• All Other: $1,251.3 million, about 11.1% of revenue. This is the Fire Protection Services segment (fire extinguishers, sprinkler systems and alarm testing) plus the Uniform Direct Sale segment.

Cintas runs on local delivery routes. At May 31, 2026 it had about 12,500 local delivery routes and 484 operational facilities. It occupies 496 facilities in total, including 210 rental processing plants, 143 rental branches, 72 first aid and safety facilities, 12 distribution centers and five manufacturing plants that make standard uniforms. It owns or leases about 24,500 vehicles and employs about 48,100 people, about 800 of them in unions. Its markets are local and fragmented. Competitors include national, regional and local providers, retailers and online sellers, and customers can also choose to do the work themselves. Cintas competes on product, design, price, quality, service and convenience.

Cintas's stated strategy is to grow by selling more products and services to existing customers and by winning new market segments and geographies. It does this through a national sales force and frequent route contact with customers, and it evaluates strategic acquisitions as opportunities arise. In fiscal 2026 it bought 30 businesses that were individually immaterial (5 in Uniform Rental, 4 in First Aid and Safety and 21 in All Other) for $164.5 million in net cash.

Pending acquisition of UniFirst. On March 10, 2026, Cintas agreed to buy UniFirst Corporation, a North American uniform, workwear, facility services and first aid company. The deal is valued at about $5.5 billion. Each UniFirst share will be exchanged for $155.00 in cash plus 0.7720 of a Cintas share. UniFirst shareholders approved the deal at a special meeting on June 11, 2026. Closing still requires the HSR waiting period to expire or end and other regulatory approvals. If the deal fails in certain circumstances, Cintas would have to pay UniFirst a $350.0 million termination fee. Cintas expects to take on about $2.8 billion of new debt to fund the deal, which would bring consolidated debt to about $5.2 billion. Funding is backed by a $2.85 billion, 364-day bridge facility commitment dated March 10, 2026, and by $1.25 billion of "certain funds" commitments under the new revolving credit facility, which replaced one of the two bridge tranches. No amounts had been drawn on the bridge at May 31, 2026.

Risk factors

From the fiscal 2026 Form 10-K, accession 0000723254-26-000028.

The UniFirst deal dominates the 10-K's risk discussion. Most of the other risks bear on the margins of a route-based business with heavy labor and materials costs.

• UniFirst may not close, or may disappoint. The deal needs antitrust and other regulatory approvals, which may come late, come with conditions, or not come at all. The merger agreement can be terminated if the deal misses its outside date. If the deal fails, Cintas still bears the transaction costs, may owe the $350.0 million termination fee, and its share price could fall to the extent the current price reflects an expectation that the deal will close. If the deal does close, merging plants, IT, routes and administration is complex. The expected synergies may not arrive, and the deal may not add to earnings or help reduce leverage. Issuing Cintas shares to UniFirst holders dilutes existing shareholders. While the deal is pending, the merger agreement limits how Cintas can run its business, and customers, suppliers and employees may hold back.
• More debt. The roughly $2.8 billion of planned acquisition debt would raise interest costs, reduce flexibility, and could bring restrictive covenants. Access to commercial paper and bond markets depends on Cintas's investment-grade ratings: A-/A-2 from S&P and A3/P-2 from Moody's, both with stable outlooks.
• Economy, labor and input costs. Unemployment, inflation, recession and changes in trade and tax policy could reduce demand for Cintas's products and services. Wages, healthcare, overtime rules, and the cost of fabrics and other materials all push costs up. Cintas says competitive or contractual limits may keep it from passing these costs on to customers in full or on time.
• Tariffs, trade and sourcing. Cintas buys finished goods and fabric from domestic and international suppliers. Tariffs, retaliatory trade measures, sanctions and shipping-route disruptions, including in the Middle East, can raise costs, lengthen lead times and disrupt supply.
• Fuel and energy. The route fleet and laundry plants depend on fuel and energy prices that Cintas cannot control.
• Competition. National, regional and local rivals may cut prices or compete for acquisition targets, and customers may bring services in-house. Any of these can pressure pricing and growth.
• Capacity. Growth depends on opening new, cost-effective plants. That requires suitable sites, adequate water and utilities, and environmental and zoning approvals.
• Technology, cybersecurity and AI. Cintas relies on SAP and other third-party cloud systems. It has had cybersecurity incidents in the past, none material. Wider use of AI in routing, sales and operations brings risks from faulty outputs, changing regulation, data exposure and intellectual property claims.
• People and labor relations. The company says its culture depends on keeping key people. Third-party organizing efforts, advocacy-group scrutiny and turnover could strain labor relations, and the pending deal adds uncertainty for employees.
• Regulation and environment. Cintas is subject to USDOT, OSHA, wage-and-hour, privacy and environmental rules. It is involved in a limited number of remediation investigations and actions, and cleanup costs could exceed reserves. Tax risks include the Inflation Reduction Act's minimum tax and buyback excise tax, Pillar Two global minimum taxes, and tax audits, including on transfer pricing.
• Other financial risks. These include goodwill and intangible impairment if conditions worsen, and swings in the Canadian dollar. Foreign-currency revenue is less than 10% of the total.

Management's discussion: fiscal 2026

From the fiscal 2026 Form 10-K, accession 0000723254-26-000028.

Fiscal 2026 revenue rose 8.9% to $11.3 billion. Organic growth was 8.3% and acquisitions added 0.6%. Management attributes the growth mainly to higher sales volume. Organic growth was steady through the year at 7.8%, 8.6%, 8.2% and 8.4% in the four quarters. Uniform Rental and Facility Services revenue rose 8.1% to $8,621.6 million (7.6% organic). New business, selling more products to existing customers and price increases drove the gain, partly offset by lost business. Management credits the new business to more sales representatives who were also more productive. Other revenue, meaning First Aid and Safety Services plus All Other, rose 11.8% to $2,643.1 million (10.6% organic). First Aid and Safety Services alone grew 14.3% (14.0% organic).

Margins widened. Total gross margin rose to 50.6% from 50.0%. In Uniform Rental, gross margin rose to 50.0% from 49.3%, which management attributes to more efficient use of in-service inventory and production efficiency gains. First Aid and Safety gross margin rose to 57.7% from 57.2%, helped by sales mix, sourcing, productivity and lower energy costs as a percent of revenue. Selling and administrative expenses were 27.4% of revenue, up from 27.2%. Fiscal 2025 had included a $15.0 million gain on a property sale, and excluding it these expenses were flat as a percent of revenue.

Operating margin rose to 23.1% from 22.8%. By segment:

• Uniform Rental: 24.1% (from 23.5%), with operating income up $203.6 million.
• First Aid and Safety: operating income up 19.9% to $353.4 million, a 25.4% margin (from 24.2%).
• All Other: margin fell to 15.3% from 16.7%.

The UniFirst deal cost $16.1 million in fiscal 2026, mostly legal, professional, regulatory and financing fees. Of this, $15.1 million was charged against operating income and $1.0 million to interest expense. There were no such costs in fiscal 2025.

Net interest expense was $101.2 million, compared with $95.5 million. Pretax income rose 10.6% to $2,505.3 million, and the effective tax rate was 20.2% (20.0% in fiscal 2025). Net income rose 10.4% to $2,000.0 million, and diluted EPS rose 11.6% to $4.91 from $4.40.

Cash and capital. Operating cash flow rose 5.1% to $2,276.3 million. Capital spending was $395.1 million and acquisitions took $164.5 million. Cintas repurchased $952.1 million of its stock:

• $777.8 million under its buyback programs (4.0 million shares at an average of $196.38).
• $174.3 million of shares withheld to cover employee taxes.

Dividends paid in fiscal 2026 totaled $701.5 million ($1.74 per share). On March 27, 2026 the company replaced its credit agreement with a $2.0 billion revolving facility maturing March 27, 2031. At May 31, 2026 there was no commercial paper or revolver borrowing outstanding. Senior notes totaled $2,436.6 million, including $1.0 billion of 3.70% notes due in fiscal 2027 that are now classified as current. Management says it has offset inflation in wages, fuel and transportation through pricing and efficiency initiatives, so that inflation has not hurt results.

Current quarter: fiscal 2027 first quarter (ended August 31, 2026)

From the Form 10-Q for the quarter ended August 31, 2026, accession 0000723254-26-000047, and the earnings release furnished as Exhibit 99 to the Form 8-K of September 23, 2026, accession 0000723254-26-000044. Regulatory-review dates are also from the Forms 8-K of June 12, 2026 (accession 0000950103-26-008890) and October 6, 2026 (accession 0000950103-26-015293).

Growth picked up in the first quarter, helped by one extra workday (66 against 65), and margins reached what the company called a record. Revenue rose 10.9% to $3,014.0 million. Organic growth, which adjusts for acquisitions, currency and workdays, was 8.9%, up from 7.8% in the same quarter a year earlier. The extra workday added 1.7%, acquisitions added 0.4% and currency subtracted 0.1%.

• Uniform Rental and Facility Services: revenue rose 9.7% to $2,294.7 million (8.0% organic), driven by new business, selling more to existing customers, price increases and strong customer retention. Gross margin widened to 50.8% from 49.7% and operating margin to 25.1% from 23.9%. Operating income rose 15.0%. Management attributes the gains to more efficient use of in-service inventory, strategic sourcing, efficiency gains and better leverage of fixed costs.
• First Aid and Safety Services: revenue rose 16.1% to $388.5 million (14.2% organic). Gross margin rose to 57.6% from 56.8%, and selling and administrative expenses fell to 32.0% of revenue from 32.8%. Operating income rose $19.2 million to $99.5 million, a 25.6% margin compared with 24.0%.
• All Other: Fire Protection Services revenue was $252.3 million (compared with $221.9 million) and Uniform Direct Sales revenue was $78.4 million (compared with $70.5 million). All Other operating income was $51.7 million, compared with $37.6 million.

Consolidated gross margin rose 120 basis points to 51.5%. Operating income rose 15.2% to $711.9 million, a 23.6% margin compared with 22.7%. That figure is after $14.4 million of UniFirst transaction costs, which are booked at corporate level. Including $1.3 million booked in interest expense, total UniFirst costs for the quarter were $15.7 million. The effective tax rate rose to 20.0% from 17.6%, so net income grew more slowly than operating income: up 12.3% to $551.7 million. Diluted EPS was $1.36 compared with $1.20, up 13.3%. Excluding the UniFirst costs, which reduced EPS by $0.03, the company reported adjusted diluted EPS of $1.39, up 15.8%.

Operating cash flow rose to $572.3 million from $414.5 million, helped by higher net income and favorable changes in payables, accrued liabilities and income taxes. Capital spending was $107.5 million, leaving free cash flow (as the company defines it) of $464.8 million, compared with $312.5 million. Cash paid for acquisitions was $3.9 million, and the company says the quarter's acquisitions were in Fire Protection. Cintas spent $315.7 million repurchasing stock:

• $235.9 million under its buyback program (1.18 million shares at an average of $199.93).
• $79.8 million of shares withheld for employee taxes.

It paid $180.7 million of dividends. The quarterly dividend declared on July 28, 2026 was $0.52 per share, compared with $0.45 a year earlier. Cash was $243.6 million at quarter-end, and the debt structure was unchanged.

Guidance (from the September 23, 2026 release). Cintas raised its fiscal 2027 outlook. It now expects revenue of $12.15 billion to $12.27 billion, up from $12.10 billion to $12.25 billion, which would be 7.9% to 8.9% growth on fiscal 2026's $11,264.8 million. It expects adjusted diluted EPS of $5.45 to $5.54, up from $5.36 to $5.50, which would be 10.3% to 12.1% growth on fiscal 2026's adjusted $4.94. The guidance:

• excludes UniFirst and any future acquisitions or share buybacks
• assumes constant exchange rates
• assumes net interest of about $103.0 million, up from $101.2 million, mainly from amortizing bridge-loan financing costs
• assumes an effective tax rate of 20.4%
• reflects one more workday than fiscal 2026

UniFirst regulatory review. On June 11, 2026, the U.S. Federal Trade Commission issued a Second Request, which extends the HSR waiting period until 30 days after both companies substantially comply. On July 2, 2026, the Canadian Competition Bureau issued a Supplementary Information Request. CEO Todd Schneider said in the release that the company continues to work with the FTC and expects the deal to close before the end of calendar 2026.

Subsequent events

From the Form 10-Q for the quarter ended August 31, 2026, accession 0000723254-26-000047 (filed October 7, 2026), and the Form 8-K of October 6, 2026, accession 0000950103-26-015293.

These events took place after August 31, 2026, up to the filing of the 10-Q on October 7, 2026.

• UniFirst antitrust timing. On October 2, 2026, Cintas and UniFirst each certified to the FTC that they had substantially complied with the Second Request. The same day, they signed a timing agreement with the FTC and agreed not to close before December 11, 2026 unless the FTC notifies them in writing before then that it has closed its investigation. On September 29, 2026, both companies certified to the Canadian Competition Bureau that they had completed their responses to its Supplementary Information Request. The deal had not closed when the 10-Q was filed. Cintas still expects it to close before the end of calendar 2026, subject to customary closing conditions.
• Share repurchases. From September 1 through October 7, 2026, Cintas bought 2.5 million shares at an average of $198.99, for a total of $494.0 million. This completed the $1.0 billion July 23, 2024 program, which bought 5.1 million shares in total at an average of $195.19. Cintas then began buying under the October 28, 2025 $1.0 billion program: 1.2 million shares at an average of $198.90, for $244.1 million.
• Dividend paid. On September 15, 2026, Cintas paid the $0.52-per-share quarterly dividend declared on July 28, 2026, a total of $208.8 million.
• No other material post-quarter events disclosed. Neither filing reports any other acquisition, divestiture or new borrowing after the quarter end. At August 31, 2026 there was no commercial paper or revolver borrowing outstanding.