UniFirst (UNF) Stock Tumbles as Q1 Revenue Hits $621.3M Amid Margin Squeeze

UniFirst's stock just got a cold rinse. The uniform giant posted a top line that would make most companies jealous—$621.3 million in Q1 revenue—yet investors are heading for the exits. Why? The margins are bleeding.

The Profit Pinch

Revenue growth is one thing, but keeping it profitable is another. UniFirst's latest numbers show a classic case of the top line expanding while the bottom line contracts. Higher costs for everything from cotton to logistics are chewing through the gross margin, turning a solid sales figure into a worrying earnings report. It's the corporate equivalent of winning the race but running out of gas at the finish line.

A Sector Under Pressure

This isn't just a UniFirst story. It's a warning flare for traditional service-sector stocks grappling with post-pandemic realities. When your business is built on physical goods and fleet logistics, inflation isn't a theory—it's a direct hit to the P&L. Contrast this with asset-light, digital-native models where scaling revenue doesn't automatically mean scaling costs. Makes you think.

The finance jab? Another quarter where the analysts' spreadsheet models failed to account for the real world. They'll likely now downgrade the stock they told you to buy last month—the circle of life on Wall Street.

So, UniFirst delivered the sales. But in the market's eyes, it forgot to deliver the profits. In today's climate, that's a one-way ticket to a sell-off.

TLDR

• Revenue rises 2.7% to $621M while operating margin slips on growth spending
• EPS dips to $1.89 as digital and enterprise upgrade costs weigh results further
• Uniform & Facility revenue grows, but healthcare and legal expenses trim margin
• First Aid & Safety sales jump 15% though investments keep profitability negative
• Guidance reaffirmed as cash stays strong and share buybacks offset near-term drag

UniFirst (UNF) shares moved lower after the company posted first-quarter fiscal 2026 results showing higher revenue but weaker margins. UniFirst is trading around $198, down about 2.5% on the day.

UniFirst Corporation, UNF

The update also reinforced full-year guidance while noting continued spending pressures.

Q1 Revenue Rises but Margins Narrow

UniFirst reported consolidated revenue of $621.3 million, and the figure increased 2.7% from the previous year. However, operating margin slipped to 7.3% as planned investments continued across Core operations. Net income declined to $34.4 million as expense levels grew.

The company stated that diluted earnings per share reached $1.89, yet the figure trailed the prior year. Adjusted EBITDA margin also moved lower to 13.3% as transformation costs weighed on results. The quarterly effective tax rate ROSE to 26.9% and added mild pressure.

UniFirst recorded $2.3 million in costs tied to its enterprise system upgrade during the period. These costs reduced operating income and earnings metrics across reporting lines. Still, the company noted that the project aims to support future efficiency.

Segment Results Show Mixed Trends

The Uniform and Facility Service Solutions segment generated $565.9 million in revenue, and the total increased 2.4%. Organic growth matched the headline number and reflected steady account gains. Yet operating margin decreased to 7.4% due to higher healthcare and legal expenses.

Adjusted EBITDA margin for the segment slipped to 13.6% as merchandise costs improved but other expenses rose. The company continued strategic investments that supported new customer wins. However, these actions produced short-term pressure on profitability.

The First Aid and Safety Solutions segment posted $30.2 million in revenue, and the figure marked a 15.3% jump. The unit still reported an operating loss, which reflected ongoing investment in the First Aid van business. Adjusted EBITDA remained negative as profitability initiatives continued.

Balance Sheet Strength and Full-Year Outlook

The company ended the quarter with $129.5 million in cash and no long-term debt. UniFirst also repurchased $31.7 million in shares during the period. Moreover, it maintained $8.9 million in buyback capacity.

The firm reported $25.2 million in revenue for its nuclear solutions segment as expected project wind-downs reduced activity. Operating income reached $3.9 million despite the revenue dip. Also, Adjusted EBITDA of $4.8 million reflected the segment’s fixed-cost structure.

UniFirst reaffirmed its fiscal 2026 outlook with revenue expected between $2.475 billion and $2.495 billion. Earnings guidance remained at $6.58 to $6.98 per share and included planned project costs. Therefore, the market responded to near-term margin pressure while the company emphasized longer-term benefits.