Workplace uniform provider UniFirst (NYSE: UNF) reported revenue ahead of Wall Street’s expectations in Q1 CY2026, with sales up 3.4% year on year to $622.5 million. Its GAAP profit of $1.13 per share was 4.5% above analysts’ consensus estimates.

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Steven Sintros, UniFirst President and Chief Executive Officer, said, “We delivered solid results in the second quarter as we continued to take meaningful actions to invest in growth and deliver operational efficiencies. Our differentiated, service-driven model continues to build loyalty amongst new and existing customers as they recognize our commitment to reliability, accountability and sustained relationships.”

Company Overview

With a fleet of trucks making weekly deliveries to over 300,000 customer locations, UniFirst (NYSE: UNF) provides, rents, cleans, and maintains workplace uniforms and protective clothing for businesses across various industries.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

With $2.47 billion in revenue over the past 12 months, UniFirst is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. On the bright side, it can still flex high growth rates because it’s working from a smaller revenue base.

As you can see below, UniFirst’s sales grew at a decent 6.9% compounded annual growth rate over the last five years. This shows its offerings generated slightly more demand than the average business services company, a useful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. UniFirst’s recent performance shows its demand has slowed as its annualized revenue growth of 2.9% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs.

This quarter, UniFirst reported modest year-on-year revenue growth of 3.4% but beat Wall Street’s estimates by 1.3%.

Looking ahead, sell-side analysts expect revenue to grow 2.6% over the next 12 months, similar to its two-year rate. This projection is underwhelming and suggests its newer products and services will not lead to better top-line performance yet.

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Operating Margin

UniFirst was profitable over the last five years but held back by its large cost base. Its average operating margin of 7.2% was weak for a business services business.

Looking at the trend in its profitability, UniFirst’s operating margin decreased by 1.9 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. UniFirst’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

This quarter, UniFirst generated an operating margin profit margin of 4.2%, down 1 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

UniFirst’s EPS grew at a weak 2% compounded annual growth rate over the last five years, lower than its 6.9% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

Diving into the nuances of UniFirst’s earnings can give us a better understanding of its performance. As we mentioned earlier, UniFirst’s operating margin declined by 1.9 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For UniFirst, its two-year annual EPS growth of 9.9% was higher than its five-year trend. Accelerating earnings growth is almost always an encouraging data point.

In Q1, UniFirst reported EPS of $1.13, down from $1.31 in the same quarter last year. Despite falling year on year, this print beat analysts’ estimates by 4.5%. Over the next 12 months, Wall Street expects UniFirst’s full-year EPS of $7.38 to stay about the same.

Key Takeaways from UniFirst’s Q1 Results

It was good to see UniFirst beat analysts’ EPS expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. Overall, this print had some key positives. Investors were likely hoping for more, and shares traded down 1.5% to $247.99 immediately following the results.

So should you invest in UniFirst right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).