11:02 AM EST, 01/08/2025 (MT Newswires) -- UniFirst ( UNF ) reported higher fiscal first-quarter results annually but costs related to certain projects weighed on earnings, while the uniform rental company trimmed the top end of its full-year sales outlook.

Net income came in at $2.31 per share for the quarter ended November, up from $2.26 the year before. Three analysts polled by FactSet expected $2.09. Sales increased 1.9% to $604.9 million, compared with analysts' $606.6 million estimate.

The company said Wednesday it incurred about $2.5 million in costs linked to its customer relationship management computer system and enterprise resource planning projects, resulting in a $0.09 headwind to EPS. Total operating expenses rose to $549.4 million from $540.4 million in the prior-year quarter.

"We are pleased with the results from our first quarter, which represent a solid start to our fiscal year and were largely in-line with our expectations," Chief Executive Steven Sintros said during an earnings call, according to a FactSet transcript.

On Tuesday, larger uniform supplier Cintas ( CTAS ) went public with its attempt in November to acquire UniFirst ( UNF ) in a potential all-cash offer worth roughly $5.3 billion, which was rejected by UniFirst ( UNF ). Cintas ( CTAS ) proposed to buy UniFirst ( UNF ) for $275 per share in cash, saying the price reflected a 46% premium relative to the latter's 90-day average price as of Monday.

During the earnings call, Sintros reiterated UniFirst's ( UNF ) statement from Tuesday that the company's board determined the proposal wasn't in the best interests of the group and its investors.

"We believe a potential combination could be highly accretive but initial opposition from UNF's controlling shareholders (founding family) may make it difficult to get a transaction over the finish line," Truist Securities said in a report. "Our sense is that a potential transaction could also face antitrust scrutiny."

Revenue for the core laundry operations segment, in which the CRM and ERP projects' costs were recorded, rose 1.7% year over year to $532.7 million in the first quarter. "As the market has emerged from a period of significantly elevated inflation levels, a more challenging pricing environment has developed, which has had a corresponding impact on our retention rates," Sintros said on the call. "This has impacted our overall growth in our core laundry operations."

Sales in the specialty garments business improved 2.9% to $45.9 million, buoyed mainly by growth in the European and North American nuclear operations, partially offset by a decrease in cleanroom operations, according to the company.

For fiscal 2025, UniFirst ( UNF ) now expects revenue to come in between $2.425 billion and $2.44 billion, lowering the top end of the prior outlook from $2.445 billion, Sintros said in a statement. The company reiterated its EPS forecast of $6.79 to $7.19 for the year. Three analysts surveyed by FactSet estimate GAAP EPS of $6.98 and sales of $2.43 billion.

The guidance continues to include an estimated $16 million of costs related the CRM and ERP projects, Sintros said.

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