$68.46
$154.80
bear $68.46
base $119.98
bull $154.80
margin of safety $45.00
market price* $263.00
UniFirst rents, cleans and delivers work uniforms, floor mats, towels and facility service products to more than 300,000 customer locations in the United States, Canada and Europe, and sells first aid and safety products through a growing fleet of service vans. Its principal garment plants are in Mexico and Nicaragua. Revenue was $2.43 billion in fiscal 2025, of which Uniform & Facility Service Solutions was $2.22 billion. The company has no borrowings, held $168.9 million of cash and short-term investments at May 30, 2026, and had $198 million available under a $300 million credit line. Pending sale. In March 2026 UniFirst agreed to be acquired by Cintas for $155.00 in cash plus 0.7720 Cintas shares per UniFirst share. Shareholders approved it on June 11, 2026, the same day the Federal Trade Commission issued a second request for information. The agreement's outside date is January 10, 2027 (extendable by eight months), and break fees of $213.3 million (payable by UniFirst) and $350.0 million (payable by Cintas) apply in specified circumstances. Everything below values UniFirst as a standalone business; it does not include the deal consideration or either break fee. Earning power. We measure owner earnings as cash from operations, excluding swings in working capital (receivables, inventories, rental merchandise in service, payables and the like), less stock compensation and the part of capital spending needed just to stay in business. Capital spending runs about 6.8% of revenue, so roughly half of reported operating cash flow is reinvested. On that basis owner earnings per share were $5.99 in fiscal 2016, peaked at $9.03 in fiscal 2019, fell to $5.01 in fiscal 2023 when capital spending peaked at $172 million, and recovered to $7.92 in fiscal 2024 (a 53-week year) and $7.48 in fiscal 2025. Revenue grew about 5.8% a year from fiscal 2016 to fiscal 2025, yet total cash earnings (owner earnings plus a trivial amount of cash interest) rose only about 1.6% a year, from roughly $122 million to $140 million, as margins were squeezed. Following how the company presents its cash flow, the net change in rental merchandise in service (uniforms placed in service) is treated as working capital. Starting level. We anchor on the ten-year median of $6.41 per share (owner earnings plus cash interest), a window that includes the 2020 pandemic shutdown, the 2022-2023 cost squeeze and the recovery since. We did not use fiscal 2025's $7.54 because the first nine months of fiscal 2026 are weaker: operating profit was $94.4 million against $134.9 million a year earlier. At least $20.7 million of that gap is one-time merger advisory and legal cost, but even excluding it operating profit is about 15% lower, with gross margin steady at 36.3% (36.1% a year earlier) and the shortfall coming from higher selling and administrative costs. Healthcare claims were already $12.8 million higher in fiscal 2025, and the multi-year ERP software project continues ($62.3 million capitalized so far). Starting at $6.41 is 15% below fiscal 2025 and already absorbs that weaker run rate. Owner earnings per share fell 5.5% in fiscal 2025; the base case assumes no growth in year one because the level has already been reset lower, not because a recovery is expected. Base case: about $119.98 a share. Owner earnings of $6.41 per share, flat in year one and then growing 1% a year for nine more years to about $7.01, then held flat. The 1% is what the record supports: median cash earnings in fiscal 2021-2025 ($128 million) were about 5% above fiscal 2016-2020 ($122 million), and revenue has grown in nine of the last ten years, helped by new account sales, price increases and a first aid van business that grew 7.8% in fiscal 2025. After year ten we credit no growth, because the rental routes and customer relationships have persisted for decades and replacement capital is already charged, but nothing we can evidence adds to them. We left out savings from the ERP and customer-system projects (not yet visible in results), margin recovery, market-share gains and the merger. About 57% of this value comes from years beyond ten, which is why the level is held flat there. Business value is about $114.37 per share; the company owes nothing; $6.55 per share of its cash is beyond what operations need (we keep $50 million of the $168.9 million); and we deduct $0.94 per share for the Mexican tax matter below, for a net value of $119.98 per share. Bear case: about $68.46 a share. Owner earnings per share (with cash interest) sit at $5.08, the fiscal 2023 low and the weakest year in the record, for the first three years. In year four a pandemic-style shutdown cuts them by a third to $3.40, matching the roughly one-third drop from fiscal 2019 to fiscal 2020. They recover to $5.08 in year five, then erode 2% a year for every year after that, continuing the pattern of the past decade in which revenue grew about two-thirds while cash earnings rose only about 15%, with no recovery assumed. The Mexican subsidiary's full $84.7 million tax assessment (about $4.66 per share) is also paid. Business value is about $66.57 per share; the company owes no debt, so net cash of $6.55 is added and the assessment takes off $4.66, for $68.46. With no borrowings, the balance sheet carries this case without any refinancing risk. Bull case: about $154.80 a share. Owner earnings start at $7.76 per share, the average of fiscal 2024 and 2025, a level the business actually delivered in current conditions, and grow 2% a year for nine years to about $9.27, then hold flat. The 2% reflects fiscal 2025 organic growth of 1.8% (excluding the extra week in fiscal 2024) and 3.3% revenue growth in the first nine months of fiscal 2026, and assumes the ERP and customer-system programs keep costs in check. Fiscal 2019's $9.03 shows this order of earnings has been reached before. No Mexican assessment is paid. Business value is about $148.26 per share, the company owes nothing, and the surplus cash adds $6.55, for about $154.80. Mexican tax matter. In fiscal 2022 Mexico's tax authority assessed the company's Mexican subsidiary $84.7 million ($17.0 million of fiscal 2016 import and value-added taxes and fees, plus $67.7 million of surcharges, fines and penalties). A Mexican tax court ruled partly in the company's favor in fiscal 2025, and the matter remains in appeal. The company has recorded no liability and calls a loss neither probable nor remote. We deduct the $17.0 million tax portion in the base case and the whole amount in the bear case. What would make this wrong. If the weakness seen in fiscal 2026 is the new normal rather than a reset (owner earnings per share staying near $5), values move toward the bear case; if labor and healthcare costs keep outrunning price increases, the 1% growth in the base case would not be earned. If the ERP project delivers its promised cost savings, results move toward the bull case. The split between one-time and lasting cost increases in fiscal 2026 is not fully disclosed, so it is our judgement. Margin-of-safety price: $45. We are fairly confident of the earnings level: owner earnings were positive in all ten years and ranged from $5.01 to $9.03 per share, and the business has no debt, but it has not grown cash earnings much despite higher revenue. The worst plausible outcome is a pandemic-type shutdown on top of the cost squeeze in the bear case, plus the full Mexican penalty; the balance sheet (no debt, cash, 148 owned facilities) would survive that, so the risk is lower earnings, not insolvency. If we are wrong about the starting level (really $5.08) or if earnings erode every year rather than holding flat, the shares are worth about $68, the bear value. A price of $45 values the operating business, after its $6.55 per share of surplus cash, at about $38.45, or about 6 times our $6.41 of annual owner earnings, a cash yield near 17% before any growth, of which the $0.365 quarterly dividend pays out about 3% of the $45 in cash over the holding period. The price assumes a holding period of three years or longer; on that assumption, steady cash generation plus a modest rise in the value placed on it implies about 20% a year. The margin-of-safety price is not higher because at higher prices that implied return would depend on both the base-case growth and the flat-forever assumption holding, and the company's record on margins does not justify that. Figures from earlier analyses are not comparable, as they were built on a different basis.