UniFirst Corporation (NYSE:UNF) Q2 2023 Earnings Call Transcript

Shane O’Connor: Yeah. So when we’re talking about our current guidance for the year, yeah. I think, I think that sort of what you articulated excluding the impact or after the impact of my key initiatives and the transaction-related cost that I’m going to incur, you sort of spot on there. I think when you take a look at the guidance that we had last year, I was sort of indicating that after the effects of those two items that was largely in line with last year. Right now my guidance is about 60, 70 basis points lower than that previous guidance. When I, when I unpacked that change, about 20 basis points of that relates to the Clean acquisition. And obviously some that being influenced by the purchase accounting assumptions that I had articulated earlier.

I had even last quarter, I had indicated that my expectation of the headwind-related merchandize on the year was still going to approximate about a point of headwind on my margin. At this point in time, my assumption is, is slightly heavier than that with about 20 to 30 basis – 20 to 30 basis points of additional headwind, compared to that previous assumption. And then, Energy, because based on where Energy was I guess tracking towards in our assumptions, I thought that we were going to get a little – slightly larger benefit from Energy – from my Energy comparison than I think now. So that’s sort of like a 10 basis point headwind compared to that prior guidance, as well. So those three items are really largely explaining that change.

Andy Wittmann : Okay? I might follow up a little bit more offline to get a little bit more detail on that, but that’s helpful discussion. I guess, stepping back and thinking about the fact that the CRM is 75% installed and some of these locations it’s been installed for a while now. I guess, Steve, can you talk about how much benefits to your margins is being harvested already from the systems that are live? And I know that some of the locations where it is live, it’s still kind of being phased in where the old isn’t completely gone yet. So, I recognize that it’s not – you’re not getting the full benefit of this. But can you just talk about how much benefit if any, you are getting today? And as you turn the page to the next couple quarters, and maybe even the next fiscal year, when do you expect the benefits to your profit margins are going to wrap more substantially, as a result of that investment?

Steven Sintros : Yeah, I think when you look at the CRM, you’re right, we’re still, we’re still in the midst of it. Even though we’re through about 75% of the U.S. laundries, there’s still a lot of, what I’ll call learning and change management going on for locations adopting the new system. I think broadly, as we kind of go through that deployment. In fact, in the months, probably up to six months surrounding a deployment is probably not a net advantage, because there’s a lot of time and training and data conversion and a lot of work that’s being done. And so we’re seeing it takes locations six to nine months to sort of hit their stride, and using the new system. That’s not to say there aren’t benefits immediately, right? We’ve talked about enhanced merchandize control.