UniFirst Corporation Shares Drop 7% Despite Earnings Growth and Raised Guidance

UniFirst Corporation (NYSE: UNF) saw its shares decline sharply by 7.81% to $175.22 during Wednesday's trading session, even as the company reported a 4.9% year-over-year increase in Q3 FY25 earnings per share (EPS) to $2.13. Revenue edged up 1.2% to $610.8 million, driven by modest growth in the Core Laundry segment.

Operating income dipped 0.6% to $48.2 million, pressured by rising healthcare costs and $5.7 million in legal and advisory expenses. The company raised its full-year EPS guidance to $7.60–$8.00 while maintaining its revenue target, underscoring confidence in its financial trajectory despite margin pressures.

With $211.9 million in cash reserves and $196.5 million in operating cash FLOW over nine months, UniFirst maintains a solid liquidity position. The market's negative reaction suggests investor concerns over flat margins and cost headwinds overshadowing the earnings beat.