UniFirst Corporation Reports Strong Q4 FY 2024 Performance

UniFirst Corporation (NYSE: UNF), a leading provider of workplace uniforms and laundry services, reported a strong performance in the fourth quarter of fiscal 2024, with record full-year revenues of $2.427 billion, marking an 8.7% increase from the previous fiscal year. The company's CEO, Steven Sintros, credited the growth to an additional week of operations and the acquisition of Clean Uniform. Net income for the quarter was at $44.6 million, or $2.39 per diluted share, while adjusted EBITDA surged 32.5% year-over-year to $95 million.

Key Takeaways

• Full-year revenues hit a record $2.427 billion, an 8.7% increase from fiscal 2023.
• Fourth quarter revenues rose to $639.9 million, an 11.9% increase with net income at $44.6 million.
• Adjusted EBITDA for the quarter increased to $95 million, up 32.5% year-over-year.
• Fiscal 2025 revenue is projected to be between $2.425 billion and $2.445 billion, with EPS between $6.79 and $7.19.
• Core Laundry Operations saw growth of 4.6% for the year, with a forecasted 1.3% to 2.3% growth expected in fiscal 2025.
• The First Aid and Safety division exceeded $100 million in revenue and anticipates double-digit growth next year.

Company Outlook

• Fiscal 2025 revenue guidance set between $2.425 billion and $2.445 billion.
• Projected diluted EPS for fiscal 2025 is between $6.79 and $7.19.
• Core Laundry Operations expected to grow organically between 1.3% and 2.3%.
• Specialty Garments revenues expected to decrease by 4%.
• First Aid segment revenue projected to grow by approximately 13%.

Bearish Highlights

• Consistent decline in wearer levels affects pricing strategies.
• Challenges in retention and market competition may impact growth.
• Specialty Garments revenues predicted to see a 4% decline.

Bullish Highlights

• Record sales driven by previously secured large contracts.
• Strong organic growth in Core Laundry Operations.
• First Aid division achieved over $100 million in revenue, anticipated double-digit growth ahead.

Misses

• Despite record revenues, challenges in customer retention exist.
• Decline in wearer levels has led to a slowdown in net metrics.

Q&A Highlights

• Steven Sintros emphasized the importance of customer feedback via NPS scores for retention.
• Market for large accounts remains healthy, though replicating last year's growth is challenging.

Summary

UniFirst's robust performance in fiscal 2024, with significant revenue and net income growth, sets a high expectation for fiscal 2025, despite anticipating a more modest growth trajectory due to market challenges.

InvestingPro Insights

InvestingPro strengthens this financial outlook by noting UniFirst's strong market capitalization of $3.42 billion and a 0.69% dividend yield, reflecting its stable financial health amid competitive challenges.

In conclusion, UniFirst's focus on operational excellence, customer service, and strategic investments positions it to navigate recent market dynamics effectively. Stakeholders are eagerly looking towards the first-quarter performance report in January 2024 for indicators of future growth and strategy execution.