Cintas (NASDAQ: CTAS) and UniFirst (NYSE: UNF) both reported earnings in recent weeks, revealing two uniform rental companies pursuing fundamentally different strategies. Cintas delivered 8-9% revenue growth with expanding margins through operational excellence. UniFirst sacrificed near-term profitability for digital transformation, producing 2-3% growth while margins compressed.
Cintas Executes. UniFirst Invests.
Cintas reported Q2 2026 revenue of $2.80 billion, up 9.3% year-over-year, with gross margin expanding to 50.4% from 49.8%. The uniform rental segment grew 8.3% to $2.16 billion, while first aid and safety services jumped 14.3% to $342.2 million. CEO Todd Schneider called it “record revenue driven by attractive growth across all business segments, all-time high operating margin.” The company raised full-year guidance and bought back $622.5 million in shares.
UniFirst took a different path. Q1 2026 revenue of $621.32 million grew just 2.7%, and operating margin fell to 7.3% from 9.2%. CEO Steven Sintros explained the margin compression as “planned investments designed to accelerate growth and enhance operational efficiency…weighed on near-term margins but position UniFirst for improved profitability over time.” The company bought back only $31.7 million in shares, a fraction of Cintas’s capital return.
| Metric | Cintas | UniFirst |
| Revenue Growth | 9.3% | 2.7% |
| Gross Margin | 50.4% | 36.5% (implied) |
| Operating Margin | 23.4% | 7.3% |
| Share Buybacks | $622.5M | $31.7M |
Premium Pricing vs. Digital Transformation
Cintas built a business model around serving customers who value reliability and pay for it. The company outfits over 2 million workers and focuses on industries where uniform quality and service consistency matter more than price. Operating margin of 23.4% and return on equity of 43.4% reflect pricing power and capital efficiency.
UniFirst is betting on a different future, pouring resources into digital tools and operational upgrades meant to improve efficiency and win market share. That strategy requires margin compression now for potential gains later. The problem is execution risk. Q3 FY2026 EPS of $1.89 missed estimates by 10%, breaking a streak of seven consecutive beats. Investors questioning whether the payoff will materialize.
The Stock Market Has Already Picked a Side
Over the past year, Cintas shares are down 2.92%, while UniFirst has fallen 8.12%. The five-year picture is more dramatic. Cintas has returned 135.58%, while UniFirst is down 7.97%. Cintas trades at 41.65x trailing earnings, while UniFirst sits at 26.83x. The market is paying for Cintas’s execution and discounting UniFirst’s promises.
Market Valuation Reflects Divergent Strategies
The market has assigned different valuations to these competing strategies. Cintas trades at 41.65x trailing earnings with a five-year return of 135.58%, reflecting investor confidence in its premium model and consistent execution. UniFirst’s 26.83x multiple and negative five-year returns suggest investors remain skeptical about the payoff from its transformation investments. The recent earnings miss and margin compression have reinforced concerns about execution risk in UniFirst’s digital transformation strategy. Cintas has beaten earnings estimates in 20 consecutive quarters, demonstrating the predictability of its premium model.
Top Gaining Stocks
Top Losing Stocks
