UniFirst’s third-quarter results were met with a negative market reaction, as revenue declined year over year and management acknowledged persistent headwinds. CEO Steven Sintros cited a softer employment environment and more pronounced reductions in wearer numbers—referring to the number of employees at customer companies who use UniFirst’s uniform services—as key drivers of lower overall growth. Sintros described the quarter as “modestly exceeding our expectations in top-line performance” but emphasized that improvements in customer retention and new account installations were offset by external industry challenges.
Is now the time to buy UNF? Find out in our full research report (it’s free for active Edge members).
UniFirst (UNF) Q3 CY2025 Highlights:
- Revenue: $614.4 million vs analyst estimates of $607.9 million (4% year-on-year decline, 1.1% beat)
- EPS (GAAP): $2.23 vs analyst estimates of $2.07 (7.3% beat)
- Adjusted EBITDA: $88.07 million vs analyst estimates of $88.18 million (14.3% margin, in line)
- EPS (GAAP) guidance for the upcoming financial year 2026 is $6.78 at the midpoint, missing analyst estimates by 20.9%
- Operating Margin: 8.1%, in line with the same quarter last year
- Market Capitalization: $2.96 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From UniFirst’s Q3 Earnings Call
- Ronan Kennedy (Barclays) asked for clarification on drivers of the 2.6% organic growth outlook. CEO Steven Sintros cited improvement in sales effectiveness and retention but acknowledged ongoing employment headwinds that continue to offset these gains.
- Ronan Kennedy (Barclays) followed up on margin outlook, inquiring about the relative impact of sales, service, digital transformation, and tariffs. Sintros detailed that each factor will contribute roughly equally to margin reductions, with operational improvements expected to provide some offsetting benefits.
- Kartik Mehta (Northcoast Research) questioned when the benefits of current investments will be realized. Sintros indicated that most operational and technology-driven gains will accrue in 2027 and beyond, with only incremental improvements expected in 2026.
- Luke McFadden (William Blair) inquired about the pricing environment in light of recent tariffs. Sintros acknowledged ongoing challenges, citing “inflation fatigue” among customers and a fluid trade policy environment that complicates cost pass-through.
- Justin Hauke (Baird) sought clarification on whether sales and service investments are included in the $7 million key initiative costs. Sintros confirmed that these costs relate solely to the ERP project, and that investments in sales and service are designed to accelerate long-term revenue growth rather than near-term profitability.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will be monitoring (1) the pace of momentum in new account installations and customer retention, (2) the tangible benefits emerging from ongoing ERP and digital transformation efforts, and (3) the impact of tariffs on both operational costs and the company’s ability to pass through price increases to customers. The trajectory of wearer numbers and employment trends in customer industries will also remain important indicators.
UniFirst currently trades at $159.52, down from $173.51 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free for active Edge members).
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