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SEC filingMixed quarter overshadowed by margin contraction from heavy SG&A investments and merger-related costs, amid pending Cintas acquisition.
The Uniform & Facility segment faced cost pressures from service staffing investments, even as these were partly offset by lower merchandise costs. This dynamic contributed to operating challenges, reflecting UniFirst's commitment to enhancing service delivery amid competitive demands.
SG&A expenses increased due to growth investments, proxy costs, and legal expenses. These investments, while strategic for long-term expansion, pressured margins in the quarter. The rise underscores UniFirst's focus on scaling operations and preparing for potential integration with Cintas.
Operating cash flow was impacted by working capital usage, particularly from rental merchandise installs. This supported funding for substantial capital expenditures and share buybacks, highlighting disciplined capital allocation despite softer cash generation. Acquisitions, mainly First Aid tuck-ins, further deployed cash while adding strategic capabilities.