Baird Adds Healthcare Question to Quarterly Survey

Robert W. Baird & Co. and TRSA recently released the results of their Fourth-Quarter 2023 Uniform & Linen Rental Survey. In the latest survey, Baird added a question to gauge revenue growth among linen, uniform and facility services companies that service the healthcare sector.

Eighty-four percent of survey respondents indicated that their healthcare operations experienced growth in the past 90 days compared to last year’s (fourth quarter of 2022) levels.

Survey participants include senior executives at linen, uniform and facility services companies across the United States, with some operations in Canada and other international locations. The total response pool includes nearly 500 independent firms.

Key uniform rental survey findings include:

• Rental Revenue Trends: 20% of respondents beat their internal revenue expectations for the quarter versus 33% falling short (47% as expected).
• Add/Stops: Employment-driven expansion at existing accounts (i.e., Add/Stop Diffusion Index) held in positive territory at 53.6 (from 56.8 last quarter and a neutral 50 reading in June). This number parallels still strong employment data.
• No-Programmers: The no-programmer (new customers without an existing rental program) diffusion index dipped negative in the fourth quarter of 2023 to 46.4. This index has been vacillating between positive and negative all year, so this is not a major surprise.
• Growth Outlook: Respondents expect roughly 4% rental revenue growth in 2024, which is about average (nearly 3-5%) but a slight deceleration from prior quarters.

Key linen rental survey findings include:

• Rental Revenue Trends: 61% of respondents cited rental revenue trends above expectations with 17% in-line and 22% falling short. 39% relative spread continues trends of revenue at and/or above expectations versus uniform rental operators, where more survey respondents indicated that they fell short.
• No-Programmers: No-programmer interest remained solidly positive at 63.9, little changed from 66 last quarter and remaining near record levels. The index has been in expansionary territory since dipping negative in 2020.
• Growth Outlook: Forecasted 12-month revenue outlook moderated to 4.4% (down from 5.5%) but is slightly above the outlook for uniform rental revenue growth rates.

Click here to view the full report. If you have any questions or comments, or would like to participate in the survey moving forward, contact Baird Senior Analyst Andrew Wittmann at awittmann@rwbaird.com or Senior Research Associate Justin Hauke at jhauke@rwbaird.com.