UniFirst’s second quarter results for 2025 were met with a negative market reaction, reflecting concerns about the company’s muted revenue growth and operational headwinds. Management attributed the modest top-line growth to softness in customer wearer levels and a challenging pricing environment, partially offset by improved customer retention and new business installations. CEO Steven Sintros noted, “We have seen examples of cutbacks on employment levels and some targeted manufacturing sector companies,” highlighting broader caution among customers.

Is now the time to buy UNF? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions UniFirst’s Q2 Earnings Call

• John Ronan Kennedy (Barclays): Asked about the drivers of organic growth and the extent of customer caution. CEO Steven Sintros explained that reductions in employment among larger manufacturing customers contributed to lower wearer levels, offsetting gains from improved retention and new business.
• Kartik Mehta (Northcoast Research): Inquired about the pace of new sales and the impact of the add-stop metric. Sintros noted modest improvement in new sales momentum but confirmed that the add-stop metric remained negative, reflecting ongoing softness in customer headcount.
• Benjamin Luke McFadden (William Blair): Sought clarification on the cost dynamics of the company’s key initiatives. CFO Shane O’Connor described that most ERP project costs are currently being capitalized and that future phases may see increased expenses as deployment nears.
• Justin P. Hauke (Baird): Questioned labor cost trends and the origin of recent legal and advisory expenses. Sintros reported overall labor cost stability and explained that advisory expenses were tied to prior strategic discussions and a legal matter with a recently increased reserve.
• Joshua K. Chan (UBS): Asked how widespread the decline in wearer levels was across the customer base. Sintros stated the softness was broad-based and not concentrated in any one sector or customer group.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will closely monitor (1) the pace of ERP system deployment and its impact on operational efficiency, (2) trends in wearer levels and customer retention amid an uncertain demand environment, and (3) developments in vendor pricing and tariff-related cost pressures. Progress in cross-selling First Aid services will also be a key indicator of growth.

UniFirst currently trades at $170.63, down from $190.21 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).

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