Uniform retailer Cintas raises annual sales, profit forecast on strong demand

Dec 18 (Reuters) - Cintas CTAS.O raised its annual forecast for revenue and profit on Thursday, betting on resilient demand for its products, including uniform rentals and first-aid supplies.

WHY IT'S IMPORTANT

Cintas offers a variety of services and products, including shop towels, fire extinguishers and flame-resistant clothing, and in the past has gained from cross-selling, rental and services opportunities across categories to increase revenue.

Analysts from RBC Capital Markets, however, have noted that amid macroeconomic uncertainty, a soft hiring market and ongoing growth investments would hamper the growth performance of companies like Cintas compared to prior years.

CONTEXT

U.S. job growth rebounded more than expected in November, according to the Labor Department's employment report, adding that hiring in the healthcare sector remained resilient, with additions in positions including ambulatory healthcare services, hospitals, nursing and residential care facilities.

This, in turn, helped Cintas boost its sales.

MARKET REACTION

Shares of the uniform retailer were up about 4% in early trading.

BY THE NUMBERS

The company expects its annual revenue to be in the range of $11.15 billion to $11.22 billion, compared with the prior projection of $11.06 billion to $11.18 billion.

Cintas also raised its annual profit forecast to be in the range of $4.81 to $4.88 per share, compared with the prior forecast of $4.74 to $4.86.

Revenue for the second quarter ended November 30 rose 9.3% to $2.80 billion, compared with estimates of $2.77 billion according to data compiled by LSEG.

The company earned a profit per share of $1.21 for the quarter, beating analysts' average estimate of $1.20.