Why Cintas Stock Fell 35% in March
Shares of uniform provider Cintas (NASDAQ: CTAS) lost a painful 35% of their value in March, according to data from S&P Global Market Intelligence. That was much worse than the 13% decline in the S&P 500 Index. The general reason for the selloff was the COVID-19 pandemic, but what's really got investors worried are longer-term issues.
Cintas' business model is pretty simple from a big-picture perspective -- it provides uniforms and other facility-upkeep services to businesses. As COVID-19 began to spread rapidly across the country, state and local governments have either mandated or firmly requested that most people stay home as much as possible, and that all non-essential businesses close. That's a big headwind for a company that makes all its revenues by supporting other businesses' operations. In the near term, Cintas will see a drop in demand because of the widespread social distancing efforts being taken.
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Source Fool.com
