UniFirst Corporation (NYSE:UNF) Q3 2023 Earnings Call Transcript

Steven Sintros: Yes. I would say, absolutely, the pricing that we’ve had to work through and our competitors as well in the market would say that pricing is up some over the last couple of years. As we’ve talked about before, it continues to be a very competitive industry. And so competition for new accounts is still very strong. But overall, yes, the market is still accepting some pricing. Although as we’ve said before, I think as some of the inflationary factors start to moderate, that may become a bit more challenging. But based on our commentary, we’re still seeing on the input side, the impact of that inflation. So I think the pricing environment is still productive. And I would say pricing is certainly elevated as an overall customer base compared to a couple of years ago for sure.

Sam Karlov: Okay. Thanks.

Steven Sintros: Thank you.

Operator: Our next question is coming from the line of Andrew Steinerman with JPMorgan. Please go ahead.

Andrew Steinerman: This might be an old question, but separate from pricing, could you just remind us about the fuel surcharge? I do think UniFirst charges a fuel surcharge when gas is up and stops when it’s down. So just remind us, when did the fuel surcharge go into effect? Has it sunsetted now? And what’s that kind of revenue impact because once you sunset that, that’s a drag.

Steven Sintros: So to give you some color there, Andrew, about I guess it was a little over a year ago now when fuel sort of spiked to almost $5 a gallon nationally. We did put in an incremental fuel charge, which has been partially rolled back during the course of this year as fuel has moderated. Now fuel still remains elevated from a few years ago. So we maintain a portion of that. But it has caused some portion of the say organic revenue decline. I’d be hesitant to kind of quantify it totally because there’s a number of things, obviously, that impact pricing over time. So but that’s the timing of when it went in and we have seen some rollback.

Andrew Steinerman: Right. And could you just mention like when was some of the — you said it went in around a year ago? When was some of the roll back? Is it at a certain time?

Steven Sintros: It was I believe during our second quarter primarily.

Andrew Steinerman: Okay. Thank you.

Steven Sintros: Thank you.

Operator: Our next question is coming from the line of Kartik Mehta with Northcoast Research. Please go ahead.

Kartik Mehta: Hey, good morning. Steve maybe just on attrition. We’re starting to see some bankruptcies increase on the SMB side and I’m wondering, as you look at your customer base, what you’re seeing from an attrition standpoint today versus maybe a year ago?

Steven Sintros: We have seen a tick-up in our — what we consider overall lost accounts over the last several months. Sort of digging into that detail a little bit I can’t say definitively here whether it’s been because of more out of businesses or so on. But as we do business with many small businesses, it’s still the biggest portion of our customer base and out of business situations has always been a decent percent of our attrition. You could probably make that connection. But we have seen some tick-up in attrition over the last few months.

Kartik Mehta: And what about from an add-stop metric, just job openings, it seems like there are a lot of job openings, but it also seems as though companies have maybe pulled back a little bit on the hiring. So if you kind of look at what you see in terms of job openings at your customers versus what you’re seeing in terms of add-stop metrics?