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UNIFIRST CORP

UNF
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Business Summary

UniFirst Corporation is one of the leading providers in the supply and servicing of uniform and workwear programs, facility management and service products, as well as first aid and safety supplies and services in North America. The company serves businesses of all sizes across multiple industry sectors, including automobile service centers, delivery services, retailers, manufacturers, restaurants, energy producers, and healthcare providers. The uniform rental and sales industry is highly competitive, and the level of competition varies by geographic area and product category. The principal sources of differentiation in the industry are the range of products and services, the quality of service, and pricing. Businesses may also elect to perform certain services internally rather than outsource them.

The company's principal competitors offering uniform rental programs include Cintas Corporation, Alsco, and Vestis Corporation. In addition to traditional rental competitors, UniFirst competes with businesses that focus on selling uniforms, facility service products, and other related items directly to end customers, a market that is highly fragmented and includes national, regional, and local providers. UniFirst believes that effective customer service is the most crucial element in developing and maintaining its market position. The company also manufactures approximately 62% of the garments placed in service, which allows it to produce custom garment programs for larger customers, offer a diverse range of designs, and better control quality, price, and speed of service.

UniFirst generates revenue by providing customers with personalized workplace uniforms and protective work clothing, facility management and service products, and first aid and safety supplies and services. The company offers a range of garment service options, including full-service rental programs, lease programs, and purchase programs. In its rental business, the company picks up soiled uniforms and other items on a periodic basis, usually weekly, and delivers cleaned and processed replacement items. The company primarily serves customers pursuant to written service contracts that range in duration from three to five years. Approximately 83.8% of the company's revenues are derived from fees for route servicing of Uniform & Facility Service Solutions and Other segment services, recognized over time as customers simultaneously receive and consume the benefits. The remaining approximately 16.2% of total revenue is recognized when goods are transferred to the customer.

The Uniform & Facility Service Solutions segment designs, manufactures, purchases, rents, cleans, delivers, and sells uniforms and protective clothing and non-garment items in the U.S. and Canada. This segment also includes cleanroom operations, which purchase, rent, clean, deliver, and sell specialty garments and non-garment items primarily for cleanroom applications and provide cleanroom cleaning at limited customer locations. Additionally, this segment consists of the company's distribution center, sales and marketing, information systems, engineering, materials management, manufacturing planning, finance, budgeting, human resources, other general and administrative costs, and interest expense. Approximately 91.2% of the company's revenues in fiscal 2025 were derived from this segment. The segment's revenues were $2,218,562,000 in fiscal 2025 and $2,224,030,000 in fiscal 2024.

The First Aid & Safety Solutions segment sells first aid cabinet services, non-prescription medicines and safety supplies, and provides certain safety training. This segment also maintains wholesale distribution and pill packaging operations for non-prescription medicines. This segment represented approximately 4.7% of total revenues in fiscal 2025. Revenues for this segment were $114,586,000 in fiscal 2025 and $106,271,000 in fiscal 2024. The Other reporting segment currently consists of the company's nuclear business, which purchases, rents, cleans, delivers, and sells specialty garments and non-garment items primarily for nuclear applications. This segment accounted for approximately 4.1% of fiscal 2025 revenues. Revenues for the Other segment were $99,204,000 in fiscal 2025 and $97,130,000 in fiscal 2024.

During fiscal 2025, the company repurchased 402,415 shares of its Common Stock for an aggregate of approximately $70.9 million , representing approximately 2.2% of its outstanding shares as of August 30, 2025. On April 8, 2025, the Board of Directors authorized a new share repurchase program to repurchase up to $100.0 million of outstanding shares of Common Stock, inclusive of the amount which remained available under the existing program. As of August 30, 2025, the company had $40.6 million remaining to repurchase shares under the program. On August 12, 2025, the company entered into an amended and restated $300.0 million unsecured revolving credit agreement, which matures on August 12, 2030. As of August 30, 2025, the company had no outstanding borrowings and had outstanding letters of credit amounting to $106.7 million , leaving $193.3 million available for borrowing under the Credit Agreement.

For fiscal 2025, total consolidated revenues were $2,432,352,000 , compared to $2,427,431,000 in fiscal 2024, representing an increase of 0.2% . Net income was $148,271,000 in fiscal 2025, compared to $145,474,000 in fiscal 2024, an increase of 1.9% . Diluted earnings per share for Common Stock was $7.98 in fiscal 2025, compared to $7.77 in fiscal 2024. Operating income was $184,498,000 in fiscal 2025, compared to $183,578,000 in fiscal 2024, with operating income margin of 7.6% in both periods. Cash and cash equivalents and short-term investments totaled $209.2 million as of August 30, 2025, an increase of $34.1 million from $175.1 million as of August 31, 2024.

Business Outlook

A key growth vector is the continued investment in expanding the first aid van business, which accounted for growth of 10.1% in the First Aid & Safety Solutions segment. Excluding the estimated impact of the extra week of operations in fiscal 2024, First Aid & Safety Solutions revenues increased 10.0% compared to fiscal 2024. The company is also pursuing growth through acquisitions as part of its strategy, intending to continue to actively pursue additional acquisition opportunities. The company's growth strategy also includes organic growth within the Uniform & Facility Service Solutions segment, reflecting solid new account sales and improved customer pricing.

Another growth vector is the multiyear enterprise resource planning (ERP) project initiated in fiscal 2022, which the company plans to continue through 2027. The ERP project has a strong focus on supply chain and procurement automation and technology. The company believes this initiative will become the core of its systems technology footprint and will integrate and complement the capabilities of its customer relationship management (CRM) system. The company expects the ERP system and the new supply chain and procurement capabilities to enable lower operating costs and reduce customer churn through enhanced inventory utilization and vendor management, improved response times to customer orders, and more efficient back-end processes. As of fiscal 2025, the company capitalized $45.3 million related to its ERP project.

The company's cost of revenues as a percentage of revenues decreased to 63.4% in fiscal 2025 from 65.1% in fiscal 2024, driven by lower merchandise and production payroll costs as a percentage of revenues. Selling and administrative expenses increased to 23.2% of revenues in fiscal 2025 from 21.5% in fiscal 2024, due primarily to continued investments in sales organization capabilities, approximately $12.8 million in higher healthcare claims, and approximately $5.7 million of advisory and legal expenses related to a strategic matter and an employee matter. The company expensed $6.8 million of non-recurring costs related to its Key Initiatives, primarily relating to the ERP project, in fiscal 2025, compared to $11.8 million in fiscal 2024.

The company's operational outlook includes the continued deployment and operation of its new CRM system, which was deployed to all U.S. locations in the first quarter of fiscal 2024 and is being depreciated over a 10-year life. The company recognized $4.1 million and $3.6 million of amortization expense related to the CRM system in fiscal 2025 and 2024, respectively. The company is also focused on managing inventory levels and optimizing supply chain processes, as evidenced by a $20.8 million positive impact from inventories on operating cash flows in fiscal 2025. The company employed approximately 16,000 team partners as of August 30, 2025, and less than 1% of U.S. employees are represented by a union.

Capital expenditures totaled $154.3 million in fiscal 2025, compared to $160.4 million in fiscal 2024. The company repurchased 402,415 shares of its Common Stock for an aggregate of approximately $70.9 million during fiscal 2025. As of August 30, 2025, the company had $40.6 million remaining to repurchase shares under the share repurchase program. On July 29, 2025, the Board of Directors declared a quarterly cash dividend of $0.350 per share of Common Stock and $0.280 per share of Class B Common Stock. The company paid $24,625,000 in cash dividends during fiscal 2025.

The company faces headwinds from elevated inflation rates, which have had an adverse impact on operating margins, including increased energy costs for vehicles and plants and increased wages in the labor markets in which it competes. The company also faces risks from adverse economic conditions resulting from inflationary pressures, U.S. Federal Reserve actions including elevated interest rates, geopolitical issues, and U.S. and foreign tariffs or other impositions on imported goods. The company has a substantial number of plants and conducts a significant portion of its business in energy producing regions in the U.S. and Canada, making it relatively more dependent on business in these regions than many competitors. A prolonged drop in energy prices could negatively impact organic growth due to headcount reductions in the wearer base and increased lost accounts.

The company identified a material weakness in internal control over financial reporting related to certain information technology general controls (ITGCs) supporting the manage change and manage access processes. As of August 30, 2025, the material weakness had been narrowed to deficiencies related to the company's CRM system which affected revenue and receivables, as well as a group of legacy applications which affected revenue and receivables, supply inventory, and merchandise in service. The company is in the process of implementing changes to remediate the material weakness, but there can be no assurance that such remedial measures will be successful in a timely manner.

Risk Factors

The company faces intense competition from principal competitors including Cintas Corporation, Alsco, and Vestis Corporation, which could result in price reductions, reduced gross margins, and loss of market share. Adverse economic and business conditions, including elevated inflation and interest rates, could reduce customer workforce levels and negatively impact sales and operating margins. The company's nuclear decontamination business in the Other segment is subject to fluctuations from nuclear plant outages and is concentrated among a limited number of customers, with revenues of $99,204,000 in fiscal 2025. The company is subject to a tax assessment in Mexico for fiscal 2016 import taxes, value added taxes, and custom processing fees of over $17.0 million , plus surcharges, fines, and penalties of $67.7 million , for a total assessment of over $84.7 million . The company identified a material weakness in internal control over financial reporting related to ITGCs, which if not remediated, could adversely impact the ability to record, process, and report financial information accurately.

Management Priorities

Management's overall tone in the filing is forward-looking and focused on strategic investments and operational improvements. The company emphasizes its multiyear ERP project, which it plans to continue through 2027, as a key initiative to enable lower operating costs and reduce customer churn. Management also highlights the continued investment in expanding the first aid van business, which accounted for growth of 10.1% . The company's strategic priorities include successfully implementing its business strategies and processes, including its capital allocation strategies, and remediating the material weakness in internal control over financial reporting. Management also notes the importance of retaining and growing the customer base, and the company's ability to compete successfully without any significant degradation in margin rates.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Manufacturing and Sourcing
  2. [2] Item 8, Note 1 — Summary of Significant Accounting Policies, Revenue Recognition
  3. [3] Item 8, Note 1 — Summary of Significant Accounting Policies, Revenue Recognition
  4. [4] Item 7, MD&A — Business Overview
  5. [5] Item 7, MD&A — Results of Operations, Revenues
  6. [6] Item 7, MD&A — Results of Operations, Revenues
  7. [7] Item 7, MD&A — Business Overview
  8. [8] Item 7, MD&A — Results of Operations, Revenues
  9. [9] Item 7, MD&A — Results of Operations, Revenues
  10. [10] Item 7, MD&A — Business Overview
  11. [11] Item 7, MD&A — Results of Operations, Revenues
  12. [12] Item 7, MD&A — Results of Operations, Revenues
  13. [13] Item 7, MD&A — Liquidity and Capital Resources
  14. [14] Item 7, MD&A — Liquidity and Capital Resources
  15. [15] Item 7, MD&A — Liquidity and Capital Resources
  16. [16] Item 5, Issuer Purchases of Equity Securities
  17. [17] Item 7, MD&A — Liquidity and Capital Resources
  18. [18] Item 7, MD&A — Long-term Debt and Borrowing Capacity
  19. [19] Item 7, MD&A — Long-term Debt and Borrowing Capacity
  20. [20] Item 7, MD&A — Long-term Debt and Borrowing Capacity
  21. [21] Item 8, Consolidated Statements of Income
  22. [22] Item 8, Consolidated Statements of Income
  23. [23] Item 7, MD&A — Results of Operations, Revenues
  24. [24] Item 8, Consolidated Statements of Income
  25. [25] Item 8, Consolidated Statements of Income
  26. [26] Item 7, MD&A — Results of Operations
  27. [27] Item 8, Consolidated Statements of Income
  28. [28] Item 8, Consolidated Statements of Income
  29. [29] Item 8, Consolidated Statements of Income
  30. [30] Item 8, Consolidated Statements of Income
  31. [31] Item 7, MD&A — Results of Operations, Operating Income
  32. [32] Item 7, MD&A — Liquidity and Capital Resources
  33. [33] Item 7, MD&A — Liquidity and Capital Resources
  34. [34] Item 7, MD&A — Liquidity and Capital Resources
  35. [35] Item 7, MD&A — Results of Operations, Revenues
  36. [36] Item 7, MD&A — Results of Operations, Revenues
  37. [37] Item 7, MD&A — General
  38. [38] Item 7, MD&A — Results of Operations, Cost of revenues
  39. [39] Item 7, MD&A — Results of Operations, Cost of revenues
  40. [40] Item 7, MD&A — Results of Operations, Selling and administrative expenses
  41. [41] Item 7, MD&A — Results of Operations, Selling and administrative expenses
  42. [42] Item 7, MD&A — Results of Operations, Selling and administrative expenses
  43. [43] Item 7, MD&A — Results of Operations, Selling and administrative expenses
  44. [44] Item 7, MD&A — Results of Operations, Selling and administrative expenses
  45. [45] Item 7, MD&A — Results of Operations, Selling and administrative expenses
  46. [46] Item 7, MD&A — General
  47. [47] Item 7, MD&A — General
  48. [48] Item 7, MD&A — Liquidity and Capital Resources, Net Cash Provided by Operating Activities
  49. [49] Item 1, Business — Human Capital
  50. [50] Item 1, Business — Human Capital
  51. [51] Item 7, MD&A — Liquidity and Capital Resources
  52. [52] Item 8, Consolidated Statements of Cash Flows
  53. [53] Item 7, MD&A — Liquidity and Capital Resources
  54. [54] Item 7, MD&A — Liquidity and Capital Resources
  55. [55] Item 7, MD&A — Liquidity and Capital Resources
  56. [56] Item 5, Common Stock Information
  57. [57] Item 5, Common Stock Information
  58. [58] Item 8, Consolidated Statements of Cash Flows
  59. [59] Item 7, MD&A — Results of Operations, Revenues
  60. [60] Item 1A, Risk Factors — Legal and Regulatory Risks
  61. [61] Item 1A, Risk Factors — Legal and Regulatory Risks
  62. [62] Item 1A, Risk Factors — Legal and Regulatory Risks
  63. [63] Item 7, MD&A — Results of Operations, Revenues
  64. [64] Item 8, Consolidated Statements of Income
  65. [65] Item 8, Consolidated Statements of Income
  66. [66] Item 8, Consolidated Statements of Income
  67. [67] Item 8, Consolidated Statements of Income
  68. [68] Item 8, Consolidated Statements of Income
  69. [69] Item 8, Consolidated Statements of Income
  70. [70] Item 8, Consolidated Statements of Income
  71. [71] Item 8, Consolidated Statements of Income
  72. [72] Item 7, MD&A — Results of Operations, Operating Income
  73. [73] Item 7, MD&A — Liquidity and Capital Resources
  74. [74] Item 7, MD&A — Liquidity and Capital Resources
  75. [75] Item 8, Consolidated Statements of Cash Flows
  76. [76] Item 8, Consolidated Statements of Cash Flows
  77. [77] Item 7, MD&A — Results of Operations, Operating Income
  78. [78] Item 7, MD&A — Results of Operations, Operating Income
  79. [79] Item 7, MD&A — Results of Operations, Operating Income
  80. [80] Item 7, MD&A — Results of Operations, Operating Income
  81. [81] Item 7, MD&A — Results of Operations, Operating Income
  82. [82] Item 7, MD&A — Results of Operations, Operating Income
  83. [83] Item 7, MD&A — Results of Operations, Provision for income taxes
  84. [84] Item 7, MD&A — Results of Operations, Provision for income taxes

Analysis on 6/8/2026