G&K Services Inc. beat Wall Street earnings expectations by a penny a share and barely missed revenue projections in the results for its fiscal first quarter reported Tuesday.
The Minnetonka-based maker of industrial clothing and uniforms reported adjusted earnings of 67 cents per share, up 8 percent, on revenue of $229.3 million, up 3.1 percent. Wall Street had been expecting adjusted earnings of 66 cents on revenue of $230.9 million. Without adjustments for one-time gains and charges, G&K's first-quarter net earnings amounted to 69 cents a share, up 11.3 percent.
The company said revenue was driven by rentals, while direct product sales declined. Revenue was adversely affected by a lower currency exchange rate with Canada, the company said.
"We delivered another quarter of profitable growth, with solid revenue gains and operating margin improving to 10.2 percent, the highest level in over a decade," CEO Douglas Milroy said in a statement.
G&K confirmed its earlier projections for the fiscal year, which called for adjusted earnings of $2.80 to $3 per share, on revenue of $930 million to $950 million. Those projections exclude an expected tax benefit of $6.4 million.
Steve Alexander • 612-673-4553
