Boardroom Battle Erupts at UniFirst as Activist Investor Demands Overhaul

A contentious struggle for corporate control is unfolding at UniFirst Corporation, with activist investment firm Engine Capital launching a proxy fight to reconfigure the company’s leadership. The significant minority shareholder is urging fellow investors to support its director nominees at the upcoming December 15 annual meeting. Engine Capital’s campaign calls for a comprehensive board refreshment and strategic review that includes exploring a potential sale of the entire company. The investor has repeatedly expressed concerns about the current strategic direction in private communications with management.

Market Sentiment Remains Cautious Amid Strategic Uncertainty

Financial analysts maintain a predominantly cautious stance toward UniFirst’s equity. Six separate research firms unanimously recommend either reducing positions or maintaining existing holdings, with none currently advising new purchases. The consensus price target sits at $174.75 per share. Barclays recently demonstrated heightened skepticism by lowering its target from $152 to $145 while downgrading the stock to an “underweight” rating.

Key Financial Metrics:
* Consensus Rating: Reduce/Sell
* Average Price Target: $174.75
* Current Trading Price: Approximately $162.94
* Market Capitalization: $3.02 Billion
* P/E Ratio: Around 20.4

Quarterly Performance Reveals Mixed Signals

The company’s most recent quarterly report delivered some positive surprises, with earnings per share reaching $2.28 compared to analyst expectations of $2.15. Revenue figures of $614.45 million also surpassed estimates. However, year-over-year comparisons reveal concerning trends, with revenues declining by 4.0 percent. More troubling to market observers, management’s own financial projections for 2026 fall substantially below current analyst forecasts.

Should investors sell immediately? Or is it worth buying UniFirst?

Operational Challenges Weigh on Valuation

Despite maintaining a solid balance sheet, UniFirst faces persistent structural difficulties. The company’s operating margin has contracted at an average annual rate of 6.4 percent over the past five years. Equity performance reflects these challenges, with shares declining 7.5 percent over the past 90 days and trading 18 percent below their level from one year ago. The stock even touched a 52-week low of $149.52 during November trading.

The central question remains whether the current board can reverse this downward trajectory. While competitors like Cintas have demonstrated robust growth, UniFirst has largely stagnated—a performance gap that Engine Capital highlights to justify its call for radical change.

Proxy Contest Emerges as Primary Share Price Catalyst

The escalating battle for board control is now driving stock price movements. Engine Capital has accused directors of delaying a potential “cash-rich premium offer” from industry peer Cintas, a decision the activist claims may have cost the controlling family billions in value. This governance confrontation has become the decisive factor influencing UniFirst’s share price performance, creating significant uncertainty for investors regarding the company’s future direction.