01:25 PM EDT, 03/12/2025 (MT Newswires) -- Cintas ( CTAS ) is tracking toward in-line revenue for its fiscal third quarter as some of the headwinds from the previous quarter abate, RBC Capital Markets said in a note e-mailed Wednesday.

The brokerage expects third-quarter revenue of about $2.6 billion, which it said would match Wall Street's views. RBC expects earnings of $1.06 a share, compared with the Street's $1.05 estimate, according to a note to clients. The company is scheduled to report results March 26.

The uniform supplier's organic revenue growth is likely to accelerate to 7.4% year over year from 7.1% in the second quarter, reflecting gains across uniform rental, first aid and fire protection. RBC sees uniform direct sales dropping 3% in the third quarter, according to the note.

Second-quarter revenue was impacted by weaker catalog and direct sales, though Cintas ( CTAS ) indicated that catalog was functioning at a high level and the macro backdrop was stable, RBC analysts Ashish Sabadra and David Paige said.

"Although we expect those headwinds to abate, we monitor for any slowdown in uniform rental revenues resulting from softening employment trends," the analysts said. RBC is monitoring the potential effects of tariffs, but said Cintas' ( CTAS ) flexible supply chain should mitigate some of the impact over the longer term.

Despite the challenges, the company is expected to deliver above-industry revenue growth and margin expansion amid its "solid execution," digital transformation measures, and focus on recession-resilient verticals, according to RBC.

Cintas ( CTAS ) is "more likely" to reaffirm its full-year revenue growth outlook due to limited bolt-on mergers and acquisitions in the third quarter, the analysts said. RBC projects annual organic revenue growth of 7.5%, ahead of the Street's views for a 7.3% gain.

"We are more inclined to see an increase to the EPS guide of ($4.28 to $4.34) due to solid operating leverage and opportunistic buybacks, which is not contemplated in the guide," Sabadra and Paige said.

In January, Cintas ( CTAS ) went public with its attempt in November to acquire smaller rival UniFirst ( UNF ) in a potential all-cash offer worth roughly $5.3 billion, which was rejected by UniFirst ( UNF ).

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