Cintas Corp Q2 2026 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Manav Patnaik - Barclays Services Corp - Analyst : I also just had one broader question, maybe just following up from that one. I know you've obviously shown that you guys can outperform and execute in any kind of environment. But just maybe help us appreciate like what is your downturn playbook look like? Like if unemployment does crack, how do you still keep up these kind of high single-digit growth levels? Like which levers typically make up more? Is it all of them? Just any color there would be helpful.

Question: Andrew Steinerman - JPMorgan Chase & Co - Analyst : I definitely heard the pluses and minuses about the customers' employee base. But I just didn't quite get a compilation if ad stops are changed year-over-year. I surely heard the separate point that you continue to grow with same customers. So just a comment on ad stops year-over-year. And then my second question is, with the acquisitions that were completed in this second quarter, how much will that add to second half of the year revenues?

Question: Joshua Chan - UBS AG - Analyst : Congrats on a really strong quarter. I guess my two questions. One, I think both Todd and Jim mentioned that retention rates are at record levels. Usually, you see those in stronger economic times. So maybe could you talk about how you're able to achieve strong retention rates even in these types of climate? And then I guess my second question is on the incremental margins. I think both Q1 and Q2 were within your longer-term range, but maybe towards the lower end. So any way to think about how that kind of transpires in the second half would be great.

Question: Jasper Bibb - Truist Securities - Analyst : I wanted to get an update on your experience with sourcing costs and tariffs so far this year. I guess, how have things trended relative to your expectations when you initially set guidance for the year?

Question: Jasper Bibb - Truist Securities - Analyst : And then really healthy margin in the First Aid business this quarter. Can you provide a bit more detail on what the underlying mix has looked like in that business this year? I know you were a bit heavier on the training side for the end of last year. So curious if that's flipped back some more recurring revenue?

Question: Andrew Wittmann - Robert W. Baird & Co Inc - Analyst : I just thought I would give you guys an opportunity or hear -- I'd like to hear a little bit about the competitive environment. Obviously, over the last couple of years, you've had some competitors that have really gone on a volume chasing spree. You guys have obviously executed very well amongst all this. But I was just wondering what you're seeing out there and how that's affecting your price realization. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 18, 2025 / 3:00PM, CTAS.OQ - Q2 2026 Cintas Corp Earnings Call

Question: Andrew Wittmann - Robert W. Baird & Co Inc - Analyst : Great. Just for my follow-up, I thought I would just ask a little bit on the M&A side. Obviously, last fiscal year was one of your bigger years that you had since for a while. A pretty big quarter here in terms of capital deployment towards M&A. Maybe, Todd, you could just talk about kind of the funnel here. Do you feel like thinking about the amount of capital deployment last year is, again, doable this year with the progress that you made this year so far?

Question: George K. Tong - Goldman Sachs Group Inc - Analyst : You touched on some of this, but can you provide a high-level overview on what you're seeing with sales cycles and broader customer purchasing behaviors? And if you've noticed any meaningful changes from prior quarters? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 18, 2025 / 3:00PM, CTAS.OQ - Q2 2026 Cintas Corp Earnings Call

Question: George K. Tong - Goldman Sachs Group Inc - Analyst : Got it. That's helpful. And then just a follow-up. You took up your full year guide for revenue. Can you talk about how much of the increase reflects upside in the quarter versus what you were internally expecting compared to maybe a stronger outlook for the remainder of the year?

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : I just wanted to follow up to get some more detail on the timing of the tariff costs. It sounds like those have maybe started to flow through the P&L, but there's more impact to come. Is that like a fair understanding? And then how is the industry reacting? How are you reacting? Have you started to raise prices? Have your competitors begun raising prices? How should we think through that?

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : Great. That's very helpful. And then as a follow-up, can you just refresh us on the timing of the SAP Fire implementation costs? Are you still expecting a greater headwind to margins in Fire in the second half of the year as that system gets turned on and start recognizing the amortization?

Question: Faiza Alwy - Deutsche Bank AG - Analyst : So I wanted to ask about your technology. I think it's well understood that you guys are at the forefront of implementing the latest and greatest in terms of technology. So I just wanted to get an update on what are -- if there are any recent initiatives you'd like to talk about and maybe the return on those type of investments, whether it's AI related or anything else you would want to highlight?

Question: Stephanie Moore - Jefferies LLC - Analyst : I think two areas of your strategy were very clear this morning and obviously have been clear for some time now. And the first is obviously the record retention levels that you guys continue to see as well as, as you called out, your investments in key verticals and just the strength that you're seeing there despite the uncertain macro. So kind of given these two factors, maybe talk about how your view on pricing can change because it would seem like, look, retention is very strong. You're also in these verticals where you're seeing a lot of impact, but also continuing to build out your value with these customers. So, I would assume being much stickier. So maybe just talk about how that can inform your pricing strategy going forward.

Question: Scott Schneeberger - Oppenheimer & Co Inc - Analyst : It was asked earlier a question on sales cycles, and you guys covered the spectrum with the answer pretty well. I'm curious, just to ask that a little different way, what you're seeing behaviorally from large customers as opposed to small customers? Are you seeing any softness or strength in one or the other? Just any indications on those on size category.

Question: Scott Schneeberger - Oppenheimer & Co Inc - Analyst : And did some, as you guys mentioned, very large buyback in the quarter. And clearly, we infer from this call, you're interested in being acquisitive. But it seems like we're going to see some large buybacks from you going forward based on what we've just seen. And your leverage is below one times, ticked up a little bit using a little bit of short-term borrowing to do it. What's the propensity to take the leverage higher and do that? How aggressive might we see you be with the buybacks? And where would you take the leverage?

Question: Shlomo Rosenbaum - Stifel, Nicolaus & Company Inc - Analyst : The first question I have was just hoping to get more detail on the growth verticals versus the rest of the business. Maybe you could talk a little bit about the growth of those verticals in aggregate versus the rest of the business and maybe versus each other and what percentage of the business they are right now? And then just a separate -- just a deep dive a little bit more on one of the verticals. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 18, 2025 / 3:00PM, CTAS.OQ - Q2 2026 Cintas Corp Earnings Call In terms of some of those like scrubs business that you guys have been very successful in, how much of a differentiator is it for you in terms of being able to use your balance sheet to have those dispensers out there and really invest in effective dispensers?

Question: Toni Kaplan - Morgan Stanley - Analyst : I was hoping you could talk about -- if you think about your business long term, you're already growing high single digits, great. Where do you see the next like step-up of growth coming from? Is it from the key verticals? Is it from new geographies, new products? I guess when you think about your penetration in the key verticals, like how do you think about long-term sustainability of growth at this level and where the biggest growth drivers come from? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 18, 2025 / 3:00PM, CTAS.OQ - Q2 2026 Cintas Corp Earnings Call