UniFirst (UNF) Stock: Drops as Revenue Reaches $621.3M in Q1 and Margins Decline

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.  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. 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. 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.

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