Cintas Heads Into Q1 Earnings With a Full Head of Steam

Jim Cramer told Mad Money viewers on September 18 that Cintas Corporation (NASDAQ:CTAS) is heading into its fiscal first-quarter earnings report, due September 23, with "a full head of steam."

The CNBC host framed the report alongside Paychex as a read on the health of small and medium-sized businesses. "Wednesday, besides the Okta meeting, we have reports from two companies that are very important to small and medium-sized businesses. Cintas, they do uniforms and Paychex. Now, actually, I should say, do more than uniforms at Cintas. They've got a lot of other things but it's a pretty good business... Both are coming in earnings with a full head of steam. Makes sense. That segment of the economy remains the hottest and historically won't be hurt by that first rate hike," Cramer said.

Solid Operating Performance in Fiscal 2026

The numbers back up Cramer's enthusiasm. Cintas closed fiscal 2026 with revenue of $11.26 billion, up 8.9% year over year, with organic revenue growth of 8.3%. Fourth-quarter revenue rose 8.9% to $2.91 billion, and organic revenue grew 8.4%. Gross margin hit an all-time high of 51% in the quarter.

In a September 15 SEC filing, the company said fiscal 2026 was marked by "strong organic revenue growth and expanded profitability." Management said its focus entering fiscal 2027 would remain on "continuous improvement, delivery of superior products and services and disciplined execution."

Guidance for the new fiscal year calls for revenue of $12.10 billion to $12.25 billion, which represents growth of 7.4% to 8.7%. Adjusted diluted EPS is guided at $5.36 to $5.50, implying growth of 8.5% to 11.3%.

The Valuation Problem

The bear case rests on price. Cintas closed at $197.64 on September 18, and Yahoo Finance showed a forward P/E of 36.23 as of September 17. That multiple leaves little room for disappointment when the company reports.

The pending UniFirst acquisition adds another layer of cost. Cintas expects fiscal 2027 net interest expense of approximately $105 million, up from $101.2 million in fiscal 2026, primarily because of bridge-loan financing expenses. Adjusted EPS guidance excludes nonrecurring UniFirst transaction costs. The fiscal 2027 outlook also excludes the expected impact of the acquisition itself.

The company therefore enters the print with a high valuation, moderating revenue-growth guidance and additional costs tied to the UniFirst deal — a combination that raises the cost of any stumble.

Hedge Funds Hold Steady

Insider Monkey's tracking of more than 1,000 hedge funds showed 64 hedge fund holders in the second quarter, barely changed from 63 in the previous quarter. Arrowstreet Capital was the top shareholder and increased its position by 35% to 2.75 million shares. Impax Asset Management and Millennium Management, the other prominent holders, raised their positions by 61% and 53%, respectively.

Short interest stood at approximately 3.4% to 3.9% of the float.

The September 23 results will test Cramer's call. Investors will be looking for evidence that Cintas can sustain its recent revenue and margin performance while carrying pre-closing financing and transaction costs associated with UniFirst.