Achieved record gross margins across all three route-based businesses, driven by strong top-line growth and the realization of strategic technology investments.

Performance was bolstered by a deliberate focus on resilient sectors including healthcare, hospitality, education, and state and local government.

New business acquisition remains robust, with approximately 2/3 of new customers originating from the 'no-program' or do-it-yourself market segment.

Management attributes margin expansion to high execution levels in managing controllable inputs and leveraging the SAP-enabled supply chain advantage.

Customer retention remains at record levels near 95%, while pricing strategies have stayed consistent with historical levels of 2% to 3%.

The value proposition continues to resonate in a complex macro environment by allowing customers to outsource non-core functions like image and safety compliance.

Raised fiscal 2026 revenue guidance to a range of $11.21 billion to $11.24 billion, reflecting an expected total growth rate of 8.4% to 8.7%.

The UniFirst merger is anticipated to close in the second half of calendar 2026, with integration efforts focused on technology and route optimization.

Guidance assumes a constant foreign currency exchange rate and does not factor in future share buybacks or significant economic downturns.

Management plans to implement SAP technology into the Fire Protection segment, which is expected to create a 100 basis point margin headwind for that segment during the rollout year.

Future growth strategy relies on continued cross-selling into the existing customer base and expanding the 'Apparel+' program to target the growing trades and manufacturing sectors.

Adjusted EPS guidance excludes non-recurring transaction costs related to the UniFirst acquisition, estimated at $0.03 to $0.04 for fiscal 2026.

Operating income and EPS growth comparisons were impacted by a one-time asset sale gain recognized in the third quarter of the prior year.

Energy costs remained flat year-over-year at 1.7% of revenue, though management has contemplated potential fuel price increases in the updated guidance.

Management noted that while they are not immune to tariffs, the supply chain team has successfully mitigated material impacts through long-term amortization and sourcing strategies.

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Fuel at the pump accounts for only about 100 basis points of total sales, limiting the overall impact of price spikes.

Management explicitly stated they do not use fuel surcharges, preferring to offset energy inflation through internal efficiency gains.

Buybacks were limited in Q3 due to a quiet period during UniFirst negotiations and regulatory restrictions following the agreement signing.

The company intends to remain opportunistic with buybacks once restrictions are lifted, supported by a projected 1.5x debt-to-EBITDA ratio at the merger's close.

Large national accounts have responded positively, viewing the merger as a way to gain better technology and faster delivery infrastructure.

Management dismissed concerns regarding customer dissynergies, noting that most national contracts are 'hunting licenses' where local sites choose providers based on service quality.

The segment achieved an all-time high gross margin of 58.1% due to strong double-digit organic growth and favorable revenue mix.

Management cautioned that Q4 growth comparisons will be difficult due to a one-time spike in AED training revenue in the prior year.

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