UniFirst Corporation reported first‑quarter fiscal 2026 results that included a revenue of $621.3 million, up 2.7% year‑over‑year, and an adjusted earnings per share of $1.98, falling short of the consensus estimate of $2.08. Operating income declined to $45.3 million from $55.5 million a year earlier, and the company’s operating margin contracted to 7.3% from 9.2% in the prior year. Despite the short‑term margin pressure, UniFirst reaffirmed its full‑year guidance of $2.475 billion to $2.495 billion in revenue and diluted earnings per share of $6.58 to $6.98.
The revenue increase was driven by steady organic growth in the Uniform & Facility Service Solutions segment, which grew 2.4% year‑over‑year, and a 15.3% jump in the First Aid & Safety Solutions segment, largely from new customer wins and higher contract values. The Other segment, which includes nuclear services, experienced a decline in revenue, partially offsetting gains in the core segments.
Adjusted earnings per share missed analysts’ expectations by $0.10, a 4.8% shortfall, largely because the company continued to invest heavily in its enterprise resource planning (ERP) “Key Initiative,” which is expected to cost $7 million in fiscal 2026. Higher healthcare claims and legal costs also contributed to the margin compression. GAAP diluted earnings per share were $1.89, also below the consensus estimate. Operating income fell to $45.3 million from $55.5 million, reflecting the combined impact of the ERP investment and the increased claim and legal expenses.
CEO Steven Sintros said the quarter’s performance was “consistent with expectations and reflects the impact of planned investments designed to accelerate growth and enhance operational efficiency.” CFO Shane O’Connor noted that consolidated revenues were $621.3 million versus $604.9 million a year ago, and consolidated operating income was $45.3 million versus $55.5 million. He also highlighted the $7 million cost associated with the ERP initiative and confirmed that the company continued to repurchase shares ($31.7 million in Q1) and raise its dividend, underscoring its commitment to shareholder returns while funding strategic growth.
Investors reacted negatively to the earnings miss and margin compression, citing the short‑term impact of the ERP investment and higher claim and legal costs as primary concerns. The market also noted that UniFirst is currently reviewing an unsolicited, non‑binding proposal from competitor Cintas, adding a layer of uncertainty to the company’s strategic outlook.
The company’s unchanged full‑year guidance signals management’s confidence that the investments will pay off once the ERP system is fully operational. UniFirst expects margin improvement in the coming quarters as the cost efficiencies from the ERP initiative materialize and as it continues to grow its core service segments. The guidance also reflects a cautious view of the broader economic environment, with the company maintaining its revenue and earnings outlook despite the short‑term headwinds.
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