What factors influenced CTAS's EPS in 2025?

Cintas' EPS for 2025 was influenced by several key factors, including robust revenue growth, strategic acquisitions, and improved operational efficiencies. Here's a detailed analysis: 1. **Revenue Growth**: Cintas experienced a significant increase in revenue, which was a primary driver of EPS growth. The company reported an 8.4% year-over-year increase in revenue, reaching $2.61 billion for the third quarter of fiscal 2025. This growth was positively impacted by a 7.9% organic increase, supported by strong performance across its segments, including healthcare and hospitality. 2. **Acquisitions**: Cintas benefited from acquisitions, which contributed to a 0.9% increase in revenue. The company has been actively expanding its market presence and serving new customers, which has positively influenced its financial performance. 3. **Operational Efficiencies**: The company achieved record gross margins of 50.6%, reflecting improved operational efficiencies and cost management. This increase of 120 basis points year-over-year was a significant contributor to the EPS growth. Gross margin improvement was supported by an 11.1% increase in gross profit, which reached $1.32 billion. 4. **Tax Rates**: Cintas' effective tax rate increased to 21.0% from 19.9% in the previous year, which had an impact on net income and, consequently, EPS. However, this increase did not significantly overshadow the positive effects of revenue growth and operational efficiencies. 5. **Dividend Increase**: Cintas raised its quarterly dividend by 14.9% to $158.1 million, reflecting strong cash flow generation. While this increase is positive for shareholders, it may have a minor impact on EPS due to the allocation of earnings towards dividends. In summary, Cintas' EPS in 2025 was influenced by strong revenue growth, particularly in its key segments, strategic acquisitions, improved gross margins, and effective cash flow management, despite some impact from tax rates and dividend distributions.