Vestis Corp (VSTS) News & EventsVSTSVestis Corp

Company Reports Q3 Revenue of $661.7M, Below Expectations

Reports revenue $661.7M, consensus $669.02M. "During the fiscal third quarter, we continued to deliver against our commitments for the year, advancing our strategic transformation through disciplined operational and commercial execution," said Jim Barber, President and CEO. "Operationally, we continued to see improvements in plant productivity and on-time delivery while lowering our overall operating expenses. Commercially, our pricing and segmentation initiatives gained traction as we exited more unprofitable volume, and for the first time as a public company, Revenue Per Pound increased while Cost Per Pound remained flat on a year-over-year basis. Together, these efforts delivered a second consecutive quarter of improved Adjusted EBITDA and Operating Leverage. Our total revenue and Revenue Per Pound improved sequentially as we continued to build commercial momentum supported by our strategic transformation," concluded Barber. "We also generated strong cash flow during the quarter and with liquidity of over $350M, we remain well positioned to continue allocating capital to the highest-return areas of the business while reducing debt. Our priorities remain focused on commercial excellence: executing to a data-driven standard across every market center, fueling profitable growth and market share expansion amidst a backdrop of shifting market dynamics."

Company Updates Fiscal 2026 Outlook, Expects Free Cash Flow of $160M to $170M

The Company is updating its outlook for fiscal 2026. The Company now expects fiscal 2026 Free Cash Flow to be in the range of $160M to $170M. The Company continues to expect fiscal 2026 revenue to be between flat to down 2%, as compared to normalized revenue excluding the impact of the additional operating week in fiscal 2025. The Company expects fiscal 2026 Adjusted EBITDA to be in the range of $310M to $315M with a midpoint of $312.5M, an increase of $2.5M. Based on the Company's outlook, fiscal fourth quarter 2026 Adjusted EBITDA is implied to be in the range of $84M to $89M.

Vestis Launches Strategic Transformation Plan, Expected to Save $75M

The company said, "During its fiscal first quarter of 2026, the Company launched a strategic business transformation plan designed to make the Company more customer focused, agile and efficient - while positioning it for long-term profitable growth. Once fully implemented, the Plan is expected to generate annualized operating cost savings of at least $75M and to enhance revenue. The Company estimates approximately $50M of in-year benefit to fiscal 2026 from the Plan, with roughly $30M already realized, as expected, through the fiscal third quarter. The Plan is structured around three strategic priorities: Operational Excellence, Commercial Excellence and Asset & Network Optimization. During the fiscal third quarter of 2026, Vestis advanced its strategic transformation priorities in the following ways: Operational Excellence: The Company reduced its operating expenses while improving service quality. The Company also lowered its cost of services, which includes merchandise, plant and delivery costs, while improving plant productivity by 9%. These initiatives further enhanced the customer experience, driving an 80bps improvement in on-time deliveries and a 74bps reduction in customer complaints during the period. The Company also streamlined its corporate support functions by partnering with a leading third-party provider, creating a more efficient and agile corporate support organization to better serve its markets and customers. The Company expects this outsourcing arrangement to generate approximately $10M in annual SG&A savings beginning in fiscal 2027 with some benefits realized as early as the fourth fiscal quarter of 2026. Commercial Excellence: Vestis advanced its strategic pricing execution through improved commercial practices and the deployment of robust decision-support processes that drove pricing strength over the prior year. These efforts supported a 3% increase in Revenue Per Pound during the quarter in addition to year-over-year revenue growth in the Company's Canadian segment. The initiatives emphasize disciplined pricing and product profitability structured at the customer level to deliver value for both customers and shareholders. Asset & Network Optimization: The Company continued to evaluate its network across key markets, leveraging available capacity to identify growth and optimization opportunities to further strengthen operating leverage. The Company is analyzing its network through a market segmentation approach while executing route optimization initiatives in select areas, with plans to expand as market dynamics evolve. These actions are designed to improve route efficiency, optimize costs, and strengthen network performance. The Company also continued to market non-operating properties for sale to further optimize its asset base and service network. Vestis continues to demonstrate significant progress against its transformation priorities, driving a more favorable product mix and stronger pricing discipline resulting in year-over-year Revenue Per Pound growth supporting Operating Leverage returning to its highest level since the fiscal third quarter of 2024. The Company's strong year-to-date results establish a solid platform for profitable growth moving into fiscal 2027."