UniFirst (NYSE:UNF) Reports Q4 CY2025 Revenue Surpassing Expectations

UniFirst Surpasses Q4 Revenue Forecasts

UniFirst (NYSE:UNF), a provider of workplace uniforms, posted its Q4 CY2025 financial results, outperforming revenue projections with a 2.7% year-over-year increase, reaching $621.3 million. The company anticipates full-year revenue to be approximately $2.49 billion, aligning closely with analyst forecasts. However, its GAAP earnings per share came in at $1.89, which was 5.1% below consensus estimates.

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Highlights from UniFirst’s Q4 CY2025 Results

• Revenue: $621.3 million, beating analyst expectations of $615.3 million (2.7% year-over-year growth, 1% above estimates)
• GAAP EPS: $1.89, falling short of the $1.99 forecast (5.1% below expectations)
• Adjusted EBITDA: $82.81 million, compared to the $88.45 million estimate (13.3% margin, 6.4% below expectations)
• Full-Year Revenue Guidance: Reaffirmed at $2.49 billion (midpoint)
• Full-Year GAAP EPS Guidance: $6.78 (midpoint), in line with analyst projections
• Operating Margin: 7.3%, down from 9.2% in the prior-year quarter
• Free Cash Flow: -$24.03 million, compared to $24.56 million in the same period last year
• Market Cap: $3.67 billion

Steven Sintros, President and CEO of UniFirst, commented, “Our first quarter results were in line with our expectations and reflect the effects of our planned investments aimed at driving growth and improving efficiency.”

About UniFirst

UniFirst (NYSE:UNF) operates a large fleet that delivers weekly to over 300,000 customer sites, offering rental, cleaning, and maintenance services for uniforms and protective apparel to businesses in a variety of sectors.

Examining Revenue Trends

Assessing a company’s long-term sales trajectory can reveal much about its underlying strength. While any business can have a strong quarter, sustained growth over several years is more telling.

With $2.45 billion in revenue over the last year, UniFirst is a mid-tier player in the business services sector. While it may not benefit from the same economies of scale as larger rivals, its smaller size allows for potentially higher growth rates.

Over the past five years, UniFirst’s sales have grown at a compound annual rate of 6.5%, outpacing the average for its industry peers and indicating steady demand for its services.

While long-term growth is crucial, it’s also important to consider recent trends. Over the last two years, UniFirst’s annualized revenue growth slowed to 3.5%, falling below its five-year average and suggesting a deceleration in demand.

This quarter, UniFirst achieved a 2.7% year-over-year revenue increase, surpassing Wall Street’s estimates by 1%.

Looking forward, analysts predict UniFirst’s revenue will rise by 2.4% over the next year, mirroring its recent pace and hinting at ongoing demand challenges.

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Profitability and Margins

Although UniFirst has remained profitable over the past five years, its average operating margin of 7.4% is relatively low for the business services sector.

Over this period, the company’s operating margin declined by 2.8 percentage points, raising concerns about rising expenses. Ideally, revenue growth should have improved its cost efficiency, but instead, costs increased faster than sales, limiting profitability gains.

In the latest quarter, UniFirst’s operating margin was 7.3%, a decrease of 1.9 percentage points from the previous year. This modest drop suggests the company’s cost structure has remained fairly consistent.

Earnings Per Share Analysis

Tracking long-term changes in earnings per share (EPS) helps determine if a company’s growth is translating into shareholder value.

UniFirst’s EPS has grown at a modest 2.1% compound annual rate over the last five years, lagging behind its 6.5% revenue growth. This indicates that profitability per share has declined, likely due to factors such as higher interest expenses and taxes.

A closer look reveals that the drop in operating margin was the main driver behind the weaker EPS performance, aside from revenue trends. While interest and tax expenses also play a role, they are less indicative of the company’s core operations.

Shorter-term analysis shows a different picture: over the past two years, UniFirst’s annual EPS growth rate accelerated to 12.5%, making it one of the faster-growing companies in its sector during this period.

For Q4, UniFirst reported EPS of $1.89, down from $2.31 a year ago and below analyst expectations. Wall Street forecasts a 5.1% decline in full-year EPS to $7.56 over the next 12 months.

Summary of Q4 Results

UniFirst managed to slightly exceed revenue expectations this quarter, though its EPS fell short. The company’s full-year EPS outlook is roughly in line with analyst estimates, making this a mixed set of results. Following the announcement, UniFirst’s stock price dropped 2.4% to $198.

While the latest earnings report was underwhelming, investors may want to consider the broader context—including valuation and business fundamentals—before making any decisions.