Cintas Corporation (CTAS) - Q3 2026 10-Q Summary
Business Context and Reporting Period
This summary covers the quarterly period ended February 28, 2026 (Fiscal Q3 2026). Cintas Corporation is a leading provider of corporate identity uniforms, facility services, first aid and safety products, and fire protection services. The company operates primarily in the United States, Canada, and Latin America.
Key Financial Metrics
| Metric | Q3 2026 (3 Months) | Q3 2025 (3 Months) | YTD 2026 (9 Months) | YTD 2025 (9 Months) |
|---|---|---|---|---|
| Total Revenue | $2,841.4 million | $2,609.2 million | $8,359.6 million | $7,672.5 million |
| Operating Income | $659.9 million | $609.9 million | $1,933.5 million | $1,762.3 million |
| Net Income | $502.5 million | $463.5 million | $1,489.0 million | $1,364.0 million |
| Diluted EPS | $1.24 | $1.13 | $3.65 | $3.31 |
| Operating Margin | 23.2% | 23.4% | 23.1% | 23.0% |
| Effective Tax Rate | 20.6% | 21.0% | 19.8% | 19.2% |
| Cash from Operations (YTD) | $1,567.2 million (2026) vs $1,525.6 million (2025) | |||
| Total Debt (Current + Long-Term) | $2,656.8 million (as of Feb 28, 2026) | |||
| Cash & Equivalents | $183.2 million (as of Feb 28, 2026) |
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 8.9% in Q3 and 9.0% YTD compared to the prior year. Organic revenue growth was 8.2% for both periods, driven by new business, product penetration, price increases, and strong retention.
- Segment Performance:
- Uniform Rental & Facility Services: Revenue up 7.7% (Q3) and 8.0% (YTD). Gross margin improved to 50.3% (Q3) and 49.9% (YTD) due to efficient inventory usage and sourcing.
- First Aid & Safety Services: Revenue up 14.9% (Q3) and 14.5% (YTD). Gross margin improved to 58.1% (Q3) and 57.6% (YTD) due to favorable sales mix.
- Expenses: Selling and administrative expenses increased 11.1% in Q3 and 10.0% YTD. Excluding a one-time gain on the sale of property and equipment in Q3 2025, expense ratios remained stable.
- Interest Expense: Net interest expense increased due to higher average outstanding commercial paper balances in the current period.
Guidance, Outlook, and Material Events
- UniFirst Merger: On March 10, 2026, Cintas entered into a definitive agreement to acquire UniFirst Corporation in a transaction valued at approximately $5.5 billion. The deal involves a mix of cash ($155.00 per share) and stock (0.7720 shares of Cintas per UniFirst share). The transaction is subject to regulatory and shareholder approvals.
- Capital Allocation:
- Share Repurchases: The company repurchased $933.2 million of common stock YTD. The July 2022 $1.0 billion program was completed. The July 2024 program has $1.49 billion remaining, and the October 2025 program ($1.0 billion) has not yet been utilized.
- Dividends: Dividends declared were $0.45 per share in Q3 2026 (up from $0.39 in Q3 2025). Total dividends paid YTD were $520.9 million.
- Liquidity: Cintas maintains a $2.0 billion revolving credit facility (maturity March 2031) and issued $229.5 million in commercial paper during the period. Management believes liquidity is sufficient for the next 12 months and beyond.
- Risks: Key risks include the successful closing of the UniFirst merger, integration challenges, macroeconomic conditions (inflation, interest rates), and supply chain constraints.
Investor Verification Checklist
- Merger Status: Verify the timeline and regulatory approval status of the $5.5 billion UniFirst acquisition.
- Debt Structure: Confirm the impact of the new $229.5 million commercial paper issuance on future interest expense and liquidity ratios.
- Organic Growth Drivers: Assess the sustainability of the 8.2% organic revenue growth rate, specifically regarding price realization vs. volume growth.
- Share Count: Monitor the reduction in share count due to aggressive buybacks ($933M YTD) and its impact on future EPS accretion.
- Working Capital: Review the increase in accounts receivable and uniforms in service, which contributed to cash flow variances.