Uniform Rental Trends Downward in Fourth-Quarter Baird Report

Robert W. Baird & Co. and TRSA recently released the results of their Fourth-Quarter 2024 Uniform & Linen Rental Survey. Several key metrics on the uniform rental side of the business moved into negative territory for the first time since June 2020. However, linen rental and healthcare respondents remained positive on their prospects for growth moving forward.

Key uniform rental survey findings include:

• Revenues mostly fell short of expectations again: 41% of respondents reported revenues falling short of expectations in the fourth quarter of 2024. This is similar to the results in the third quarter of 2024, and the relative spread (ahead/below) has been negative in four of the last five quarters. This is a longer period of decline than during COVID and in the Baird survey’s 21-year history.
• Add/Stops remained negative; saw further decline: Employment-driven expansion at existing accounts (i.e., Add/Stop Diffusion Index) remained negative at 37.5 for the third consecutive quarter. It has contracted all year.
• Revenue growth expectations held at their lowest level since COVID: Respondents expect roughly 2.8% rental revenue growth in 2025, down from the previous forecast in the 4-5% range.
• New business interest was negative for the second consecutive quarter: The no-programmer diffusion index (a measure of the amount of new business available in the marketplace) remained negative at 47.1, similar to 46.2 last quarter (down from 55.9 in the second quarter of 2024). This index has been vacillating between positive and negative over the past two years.

Key linen rental survey findings include:

• Rental Revenue Trends: 48% of respondents cited rental revenue trends above expectations in the fourth quarter of 2024 versus 24% below (29% were in line with their expectations). This reversed the negative trend last quarter, which was the first quarter in which more respondents saw revenue trends below expectations than above since March 2021.
• No-Programmers: No-programmer interest flipped positive in the fourth quarter of 2024 to 52.6. Last quarter marked the first negative (i.e., 50) number since December 2020. This contrasted with uniform rentals’ negative reading this quarter.
• Growth Outlook: The forecasted 12-month revenue outlook improved, now expected at 3.9% versus 2.1% last quarter. Growth expectations held steady in the 5-6% range post-COVID recovery.

87% of survey participants that serve the healthcare sector indicated that their revenues were greater during the last 90 days compared to the same time last year. 40% of respondents experienced growth greater than 5%.

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.

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.