Cintas Corporation (NASDAQ:CTAS) Q3 2024 Earnings Call Transcript March 27, 2024 10:00 AM ET

Company Participants

Jared Mattingley - VP and Treasurer, IR
Todd Schneider - President and CEO
Mike Hansen - EVP and CFO

Conference Call Participants

Ronan Kennedy - Barclays Capital
Joshua Chan - UBS
Heather Balsky - Bank of America
Andy Wittmann - RW Baird
George Tong - Goldman Sachs
Luke McFadden - William Blair
Andrew Steinerman - JP Morgan Securities
Jasper Bibb - Truist Securities
Ashish Sabadra - RBC
Stephanie Moore - Jefferies
Shlomo Rosenbaum - Stifel Nicolaus
Kartik Mehta - Northcoast Research
Toni Kaplan - Morgan Stanley

Operator

Good day, everyone, and welcome to the Cintas Corporation Announces Fiscal 2024 Third Quarter Earnings Release Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Mr. Jared Mattingley, Vice President and Treasurer, Investor Relations. Please go ahead, sir.

Jared Mattingley

Thank you for joining us. With me is Todd Schneider, President and Chief Executive Officer, and Mike Hansen, Executive Vice President and Chief Financial Officer. We will discuss our fiscal 2024 third quarter results. After our commentary, we will open the call to questions from analysts.

The Private Securities Litigation Reform Act of 1995 provides a safe harbor from civil litigation for forward-looking statements. This conference call contains forward-looking statements that reflect the company's current views as to future events and financial performance. These forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those we may discuss. I refer you to the discussion on these points contained in our most recent filings with the Securities and Exchange Commission.

I'll now turn the call over to Todd.

Todd Schneider

Thank you, Jared. Due to the outstanding dedication and execution of our employees, whom we call partners, we delivered very strong results for our third quarter. Total revenue for the third quarter grew 9.9% to $2.41 billion. The revenue dollars represent record quarterly revenue. We are pleased with the performance of each of our businesses.

Our revenue growth remains robust and we have good momentum in the business. New business remains strong. Our sales team continues to operate at a high level. We are seeing broad success across the many verticals, particularly within our focus verticals, as well as our cross-selling efforts and penetration of new products and services within our existing customers. Retention levels are strong and remain at very attractive levels. Our strong revenue growth flowed through to our bottom line. Gross margin for the third quarter increased 220 basis points to a record 49.4%, an increase of 14.9%. Operating income was a record 21.6%, an increase of 16.6%. Diluted EPS grew a robust 22.3% to $3.84.