UniFirst Company (UNF) inventory has surged roughly 30% because the finish of October, serving to i
UniFirst Company (UNF) inventory has surged roughly 30% because the finish of October, serving to it recuperate from its post-This fall earnings launch downturn. The comeback additionally possible stems from the vaccine positivity, which has buyers leaping again into the work uniform inventory. That mentioned, its near-term outlook stays considerably difficult.
Exterior Its Management
UniFirst is an organization centered on the rental, lease, and sale of labor clothes, uniforms, protecting attire, facility service merchandise, and way more. The Wilmington, Massachusetts-based agency serves each trade from healthcare to foodservice and much past all through the U.S., Canada, and Europe.
UNF had been steadily rising its gross sales for years, with its solely current setbacks a 1% decline in 2009 and a small, 0.3% decline throughout its fiscal yr 2020 that led to late August. Nonetheless, issues have been a tad worse extra not too long ago and on the underside line.
For example, UNF’s Q3 gross sales dipped 2% and This fall fell 11%. On high of the gross sales pullback, UNF’s full-year working revenue fell 26% and adjusted earnings fell 24%.
All issues thought-about, some may need anticipated UNF to have taken an even bigger hit, given the financial devastation that the coronavirus has brought on. “General, we’re happy with our outcomes for the fourth quarter and full fiscal yr given the headwinds that we confronted throughout this unprecedented time in our historical past,” CEO Steven Sintros mentioned in ready remarks final quarter.
“Our skill to proceed producing strong outcomes and robust money flows speaks to the resiliency of our firm and the worth of the services that we offer to our prospects.”
What’s Subsequent?
As we talked about on the high, UNF inventory has climbed roughly 30% because the finish of October. This got here after its post-earnings launch pullback and coincided with the optimistic vaccine information that has despatched the market to new highs. Clearly, UNF would stand to learn if extra areas of the financial system, particularly these hard-hit areas, are capable of get again up and operating.
The run has pushed the inventory proper again up towards its January 2020 highs, which could imply UNF is a bit of overheated contemplating that Zacks estimates name for its gross sales to fall over 5% in Q1 and three% in Q2.
In the meantime, its adjusted earnings are projected to sink by 33% and 6%, respectively over this stretch. UNF’s full-year FY21 EPS estimate has additionally fallen 12% since its final report, with FY22 down 8%.
Backside Line
UniFirst’s downward earnings revision traits assist it seize a Zacks Rank #5 (Robust Promote) in the intervening time. The inventory can be a part of an trade that rests within the backside 4% of our over 250 Zacks industries.
That mentioned, the corporate nonetheless pays a dividend and buyers may wish to control UNF when it stories its first quarter FY21 outcomes on January 6.
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Unifirst Company (UNF): Free Inventory Evaluation Report
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