Cintas Corp. said Tuesday that its fiscal second-quarter profit dropped 20 percent as the nation's high unemployment rate reduced demand for its uniforms and other supplies.
The company also warned that analysts' outlooks for revenue and earnings in the current fiscal year "are too optimistic." Analysts, on average, have predicted that Cintas will earn $1.75 per share on revenue of $3.58 billion during the fiscal year that ends in May.
In after-hours trading, shares of Cintas dropped $2.43, or more than 8 percent, to $27.16. The stock had ended the trading day up 6 cents at $29.68.
For the three months ended Nov. 30, Cintas reported net income of $57 million, or 37 cents per share, down from $71 million, or 47 cents per share, in the same quarter of 2008. Excluding one-time items, profit would have totaled 39 cents per share in the latest period. Revenue dropped 10 percent to $884 million from $985 million a year ago.
Analysts surveyed by Thomson Reuters expected higher earnings of 43 cents per share on revenue of $890 million.
Cintas is directly affected by the staffing levels of their customers, and with 1.2 million jobs lost in the last six months alone, the company said it did not know when job growth would return.
Company CEO Scott Farmer said Cintas's business has stabilized, but warned that broader job growth would be slow. He also said that the third quarter, which has fewer workdays, is generally more "challenging" for the company.