Cintas Corporation (NASDAQ:CTAS) Q1 2024 Earnings Call Transcript

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Todd Schneider: Yes. Good question, Seth. Certainly, it’s a very competitive marketplace and First Aid products, Safety products, there is hundreds of competitors out there. There’s many, many ways to procure those products, whether it be van delivered or e-commerce, you name it, we see it there. But as a result of that, it’s a very competitive market. And we’ve talked about the health and safety of employees being the #1 item that businesses are focused on. And when that occurs, there’s certainly — it attracts plenty of people into the marketplace because the value proposition of taking great care of employees is resonating with folks. And so yes, it’s a very competitive environment, and I’m sure it will continue to be.

Operator: And our next question comes from Stephanie Moore from Jefferies.

Stephanie Moore: Actually, maybe continuing on that last question there. Could you talk a little bit about what you’re seeing in terms of the competitive landscape and your more core Uniform ancillary product segment? As you continue to win new business, where are you seeing the majority of that new business coming from? Is it nonprogrammers, some of the regional players, larger players? Any color there would be helpful.

Todd Schneider: So I’ve been in the Uniform Rental and Facility Services business my entire career, 34 years. It’s been highly competitive my entire career, and I’m sure it will continue to be that way. But we haven’t seen a change in the landscape. It’s always really competitive. So that being said, we — our sales organization is highly skilled. And what we know is, there is a massive opportunity with the no program market. And for years, our organization has been focused on expanding the pie, and they are continuing to do exactly that. And when we talk about expanding the pie, they are — those employees at a no programmer mean — they’re wearing garments, right? It’s — but they are — they may be buying it themselves. They may be buying it through a catalog, it might be a centralized program for the company, but they’re purchasing them.

And then we provide more value to them with the products and services that we offer, whether they’re unique products like Carhartt or Chef Works or Landau, great branded programs. But the no-program market is really attractive for us, and we find that market sees really good value in what we’re offering. So we’re focused on expanding that high, and that will continue.

Stephanie Moore: Got it. And just a follow-up, if I may. You noted that retention level continue to be really high. I’m just curious, in this current environment, what do you think is resonating the most with your customers that your sales force kind of goes in? Is it kind of the willingness to work with them on price? Is it the product offering, your scale? I’d love to just get your thoughts on what do you think is resonating the most to drive such a nice retention level.

Todd Schneider: Yes. Great question, Stephanie. That’s a very complicated answer because there’s so many inputs to it. But it starts with being highly focused on taking incredibly good care of our customers and attracting and retaining the very best people. But then giving them product, services, tools so that they can not only have the intent to take great care of our customers, but do just exactly that. So — and that gets into great products that I mentioned earlier, the service — focus that we — or the tools that we’re making that make it easier to do business with us. But it gets down to our people and positioning them to take a really, really good care of our customers and then executing on that. And they’re executing at a really high level.

And we talk often about when markets — when things are challenging, when it’s hard to attract people, when it’s hard to procure products, when it’s hard to operate in the marketplace, it gives us a chance to shine. And our culture is shining through. And our people are doing one heck of a job in taking care of our customers.

Operator: And our next question comes from Scott Schneeberger from Oppenheimer.

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