Shares of Cintas Corp. (CTAS, Financial) fell more than 5% on Wednesday after announcing first-quarter results. The company posted earnings of $1.93 per share on $1.69 billion in revenue, beating earnings estimates by 13 cents and revenue expectations by $10 million.
Operating income was $265.2 million, an increase of 6.5% from the prior-year quarter. Results were negatively impacted by stock-based compensation expenses and integration expenses related to the G&K Services Inc. (GK, Financial) acquisition.
Looking ahead, the company raised its revenue guidance to a range of $6.80 billion to $6.855 billion from between $6.75 billion and $6.82 billion. Earnings per share are now expected to range from $7.19 to $7.29. The previous projection was for earnings of $7 to $7.15 per share.
Shares of Nike Inc. (NKE, Financial) fell nearly 1.3% after the company posted first-quarter earnings of 67 cents per share on $9.95 billion in revenue, a 9.7% year-over-year growth. The company beat earnings estimates by 4 cents and revenue expectations by $10 million.
Revenues for the Nike brand were $9.4 billion, up 10% on a currency-neutral basis. The company attributed this increase to double-digit growth internationally and in NIKE Direct, a strong enviroment in North America and growth in almost every category led by Sportswear. Revenues for Converse were $527 million, up 7% on a currency-neutral basis, driven by growth in Europe and Asia.
The gross margin increased 50 basis points to 44.2%, driven by higher average selling prices, favorable full-price sales mix and margin expansion in NIKE Direct.
Moreover, the company repurchased a total of 17.8 million shares for $1.4 billion. As of Aug. 31, a total of 167.2 million shares had been repurchased for $10.1 billion. In June 2018, the board of directors authorized a new four-year, $15 billion share repurchase program.
Looking ahead to full fiscal 2019, the company guided for revenue in the range of $1.41 billion to $1.45 billion. The operating margin is expected to be in the range of 29% to 30% and the adjusted operating margin is projected to be between 31.5% and 32.5%. Diluted earnings per share are forecasted to be between $8.70 and $8.90, with adjusted diluted earnings between $9.45 and $9.65 per share.
Disclosure: The author holds no positions in any stocks mentioned.
