UniFirst Q1 Earnings Report: Revenue Growth Overshadowed by Margin Pressures
UniFirst Corporation (UNF) shares declined 2.5% to $198 despite posting a 2.7% year-over-year revenue increase to $621.3 million in Q1 fiscal 2026. The uniform provider's operating margin contracted to 7.3% as strategic investments in digital transformation and enterprise upgrades weighed on profitability.
Earnings per share fell to $1.89, underperforming prior-year results, while adjusted EBITDA margin slipped to 13.3%. The company absorbed $2.3 million in system upgrade costs during the quarter, with healthcare and legal expenses further eroding margins despite growth in Core Uniform & Facility Services revenue.
First Aid & Safety Services delivered 15% sales growth, though the segment remains unprofitable due to ongoing investments. Management reaffirmed full-year guidance, citing strong cash position and share repurchases as counterbalances to near-term margin pressures.
