Financial Performance - Adjusted EBITDA for the first quarter was $70 million, showing improvement from the low point in fiscal Q4 2025 [4] - Revenue for the first quarter was $663.4 million, a decline of $20.4 million or 3% compared to the first quarter of fiscal 2025 [12] - Adjusted EBITDA margin was 10.6%, compared to 11.9% in the prior year, but improved by 150 basis points from fiscal Q4 2025 [16] Business Line Performance - Rental revenue declined by $17.9 million, and direct sales decreased by $2.7 million, with a slight positive impact from foreign exchange [12] - Processed 2% less in uniforms but increased linen volume by 7%, indicating a shift in product mix towards more costly items [13] - Revenue per pound declined by $0.04 or 3%, equating to a $20 million decrease in total revenue [14] Market Data - Total volume processed was flat year-over-year when measured by pounds, but the product mix has shifted, impacting revenue quality [12][14] - The company continues to focus on key verticals with no significant changes in macro demand observed [33] Company Strategy and Development Direction - The company is focused on operational excellence, commercial excellence, and network and asset optimization as part of its transformation framework [4][9] - Plans to improve revenue quality through better product mix and strategic pricing initiatives [14][21] - Actively marketing non-core properties for sale to optimize asset footprint and repay debt [9][21] Management Comments on Operating Environment and Future Outlook - Management emphasized that the transformation is still in early stages, with ongoing efforts to improve operational consistency and create value [10][37] - The company expects revenue for fiscal 2026 to be flat to down 2% compared to fiscal 2025, with adjusted EBITDA guidance of $285 million to $315 million [21] Other Important Information - First quarter capital investments were $9.4 million, below the target due to longer lead times for equipment [18] - The company generated $38 million in operating cash flow and $28 million in free cash flow, with significant improvements in working capital management [17][19] Q&A Session Summary Question: Revenue per pound decline and its trend for the year - Management confirmed that revenue per pound is expected to remain flat to down 2% for the full year, with a focus on improving mix and pricing [24][25] Question: Sequential EBITDA growth assumptions - Management guided for 5% sequential adjusted EBITDA growth for each remaining quarter, with specific operational and commercial assumptions underpinning this progression [27][28] Question: General macro and customer demand - Management noted no significant changes in macro demand, with consistent volume on a pound basis year-over-year [33] Question: Progress on transformation - Management indicated that they are in the early stages of transformation, with ongoing improvements in cost and service levels [37][39] Question: Cost savings realization and cadence - Management clarified that the $75 million in cost savings is a full-year target, with $40 million expected to be realized in FY 2026 [53][54] Question: Traction in the unvended market - Management reported a consistent split between programmers and non-programmers, with ongoing efforts to penetrate the unvended market [59][60]

Financial Performance - Adjusted EBITDA for the first quarter was $70 million, showing improvement from the low point in fiscal Q4 2025, reflecting progress in cost management and operational efficiency [4][16] - Revenue for the first quarter was $663.4 million, a decline of $20.4 million or 3% compared to the first quarter of fiscal 2025, with rental revenue down $17.9 million and direct sales down $2.7 million [12][14] - Cost of service decreased by $3 million year-over-year, while SG&A expenses were down approximately $0.9 million, but were impacted by $7.8 million in third-party support costs and $5.5 million in severance related to the transformation [15][16] - First quarter adjusted EBITDA margin was 10.6%, compared to 11.9% in the prior year, but improved by 150 basis points from fiscal Q4 2025 [16] Business Line Performance - Volume processed was flat year-over-year, but the product mix shifted, with a 2% decrease in uniforms and a 7% increase in linen volume, negatively impacting revenue quality [12][13] - The shift in product mix resulted in a $0.04 or 3% decline in revenue per pound, equating to a $20 million decrease in total revenue [14] Market Data - The company processed the same amount of work on a pound basis year-over-year, indicating stable overall throughput despite the decline in revenue [12][33] - The company continues to focus on key verticals with no significant changes in macro demand observed [33] Company Strategy and Development Direction - The company is focused on a business transformation framework with three pillars: operational excellence, commercial excellence, and network and asset optimization [4][9] - Efforts are being made to improve revenue quality through better product mix and strategic pricing, with a focus on customer engagement [8][14] - The company is actively marketing non-core properties for sale to optimize its asset footprint and intends to use proceeds to repay debt [9][21] Management Comments on Operating Environment and Future Outlook - Management expressed that they are in the early stages of transformation, with ongoing improvements expected in cost per pound and revenue per pound [10][37] - The company reaffirmed its full-year guidance for fiscal 2026, expecting revenue to be flat to down 2% compared to fiscal 2025, and adjusted EBITDA to be between $285 million and $315 million [21][22] Other Important Information - The company generated $38 million in operating cash flow and $28 million in free cash flow during the quarter, with significant improvements in working capital management [17][19] - Net debt at the end of the first quarter was $1.29 billion, with a strong liquidity position and no debt maturities until 2028 [20] Q&A Session Summary Question: Revenue per pound decline and future trends - Management confirmed that revenue per pound is expected to trend flat to down 2% for the year, with strategic pricing and mix improvements as key drivers [24][25] Question: Sequential EBITDA growth assumptions - Management guided for 5% sequential adjusted EBITDA growth for each remaining quarter, with operational and commercial assumptions underpinning this progression [27][28] Question: General macro and customer demand - Management indicated no significant changes in macro demand, with consistent volume on a pound basis year-over-year [33][34] Question: Progress on transformation - Management described their progress as being in the early stages, with ongoing improvements expected in both cost and revenue metrics [36][37] Question: Cost savings realization and unvended market growth - Management clarified that the $75 million cost savings is a full-year target, with $40 million expected to be realized in FY 2026, and noted stable penetration in the unvended market [53][54][59]

Financial Performance - Adjusted EBITDA for the first quarter was $70 million, showing improvement from the low point in fiscal Q4 2025, reflecting progress in cost management and utilization [4][16] - Revenue for the first quarter was $663.4 million, a decline of $20.4 million or 3% compared to the first quarter of fiscal 2025, with rental revenue down $17.9 million and direct sales down $2.7 million [11][12] - Cost of service decreased by $3 million year-over-year, while SG&A expenses were down approximately $0.9 million, but were impacted by $7.8 million in third-party support costs and $5.5 million in severance [15][16] - First quarter adjusted EBITDA margin was 10.6%, compared to 11.9% in the prior year, but improved by 150 basis points from fiscal Q4 2025 [16] Business Line Performance - Volume processed was flat year-over-year, but the product mix shifted, with a 2% decrease in uniforms processed and a 7% increase in linen volume [12][13] - The shift in product mix negatively impacted revenue per pound by $0.04 or 3%, equating to a $20 million decline in revenue [12][14] Market Data - The company reported no significant changes in macro demand, maintaining consistent volume on a pound basis year-over-year [32][33] - The focus remains on improving revenue quality and product mix through strategic pricing and enhanced customer engagement [14][58] Company Strategy and Industry Competition - The company is focused on a business transformation framework centered on operational excellence, commercial excellence, and network optimization [4][8] - Plans include marketing non-core properties for sale to repay debt and improve the balance sheet [20][19] Management Commentary on Operating Environment and Future Outlook - Management emphasized that the transformation is still in early stages, with expectations for continued improvement in operational metrics and financial performance [9][35] - The company reaffirmed its full-year revenue guidance, expecting revenue to be flat to down 2% compared to fiscal 2025 [21][20] Other Important Information - The first quarter capital investments were $9.4 million, below the target of $15 million due to longer lead times for equipment [18] - The company generated $38 million in operating cash flow and $28 million in free cash flow, with a strong liquidity position [17][19] Q&A Session Summary Question: Revenue per pound decline and future trends - Management confirmed that revenue per pound is expected to trend flat to down 2% for the year, with a focus on improving mix and pricing strategies [24][25] Question: Sequential EBITDA growth assumptions - Management guided for 5% sequential Adjusted EBITDA growth for each remaining quarter, with specific operational and commercial assumptions underpinning this progression [27][28] Question: General macro and customer demand - Management indicated no significant changes in macro demand, with consistent volume year-over-year, but acknowledged shifts in product mix affecting revenue [32][33] Question: Progress on transformation - Management described the transformation as being in the early stages, with ongoing improvements in cost and revenue metrics expected [35][38] Question: Cost savings realization - Management clarified that the $75 million in cost savings is a full-year target, with $40 million expected to be realized in FY26, and detailed the expected cadence of these savings [51][52] Question: Traction in the unvended market - Management reported a consistent split between programmers and non-programmers in new business, with ongoing efforts to penetrate the unvended market [56][58]

分组1 - Vestis reported quarterly earnings of $0.1 per share, exceeding the Zacks Consensus Estimate of $0.06 per share, but down from $0.14 per share a year ago, representing an earnings surprise of +66.67% [1] - The company posted revenues of $663.39 million for the quarter ended December 2025, missing the Zacks Consensus Estimate by 0.26%, and down from $683.78 million year-over-year [2] - Vestis has surpassed consensus revenue estimates two times over the last four quarters, while it has only beaten consensus EPS estimates once in the same period [2] 分组2 - The stock has gained approximately 9.8% since the beginning of the year, outperforming the S&P 500's gain of 1.7% [3] - The current consensus EPS estimate for the upcoming quarter is $0.08 on revenues of $656.45 million, and for the current fiscal year, it is $0.37 on revenues of $2.66 billion [7] - The Zacks Industry Rank for Uniform and Related is currently in the bottom 15% of over 250 Zacks industries, indicating potential challenges for the stock's performance [8]

Notes to Investors Non-GAAP Financial Measures Vestis reports its financial results in accordance with U.S. GAAP, but in this presentation and the non-GAAP reconciliations that follow, Vestis also uses the following non-GAAP measures: Adjusted Basic Earnings Per Share ("EPS"), Adjusted Diluted EPS, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income (Loss), Free Cash Flow, Adjusted Free Cash Flow, Net Debt, Net Leverage Ratio, Operating Leverage, Trailing Twelve Months Covenant Adjusted EBITDA, Adj ...

Financial Performance - Net income for the three months ended January 2, 2026, was a loss of $6,391,000 compared to a profit of $832,000 for the same period in 2024[18]. - Comprehensive loss for the three months ended January 2, 2026, was $3,219,000, an increase from a loss of $2,325,000 in the prior year[18]. - Total revenue for the three months ended January 2, 2026, was $663.388 million, down from $683.780 million in the prior year[78]. - Revenue from the United States for the three months ended January 2, 2026, was $602.901 million, a decrease from $621.716 million for the same period in 2024[78]. - The net loss for the three months ended January 2, 2026, was $6.391 million, compared to a net income of $832,000 for the same period in 2024, indicating a significant decline in profitability[116]. - Basic earnings per share for the three months ended January 2, 2026, was $(0.05), down from $0.01 for the same period in 2024[116]. - The effective tax rate for the three months ended January 2, 2026, was 25.3%, a decrease from 45.9% for the same period in 2024, primarily due to a consolidated pre-tax book loss[117]. Assets and Liabilities - Total assets decreased to $2,884,021,000 from $2,906,900,000 in the previous quarter[21]. - Total current assets remained stable at $853,063,000 compared to $850,031,000 in the previous quarter[21]. - Total liabilities decreased to $2,019,593,000 from $2,041,256,000 in the previous quarter[21]. - Long-term borrowings were reported at $1,148,793,000, a slight decrease from $1,155,143,000 in the previous quarter[21]. - As of January 2, 2026, the allowance for credit losses was $35.2 million, an increase from $32.7 million as of October 3, 2025[39]. - The Company had eight properties classified as held for sale with an aggregate carrying value of $6.0 million as of January 2, 2026[47]. - The Company had $19 million outstanding on its $300 million revolving credit facility as of January 2, 2026, leaving $275.2 million available for borrowing[69]. Cash Flow and Operating Activities - Cash and cash equivalents increased to $41,547,000 as of January 2, 2026, from $29,748,000 at the end of the previous quarter[21]. - Net cash provided by operating activities for the three months ended January 2, 2026, was $37,687,000, a significant increase from $3,780,000 in the same period last year[25]. Expenses and Costs - The Company reported share-based compensation expense of $2,343,000 for the three months ended January 2, 2026, down from $5,180,000 in the prior year[25]. - The Company recorded $5.6 million of expense related to deferred employee sales commissions during the three months ended January 2, 2026[84]. - Operating lease costs for the three months ended January 2, 2026, were $10,821 thousand, compared to $10,989 thousand for the same period in 2024, reflecting a decrease of 1.5%[90]. - Finance lease costs increased to $11,136 thousand for the three months ended January 2, 2026, from $10,225 thousand in the same period of 2024, representing an increase of 8.9%[90]. - The Company recorded $3.3 million of capital expenditures as of January 2, 2026, down from $6.5 million as of October 3, 2025[52]. - Capital expenditures for the three months ended January 2, 2026, totaled $9.386 million, down from $14.732 million for the same period in 2024[112]. Legal and Regulatory Matters - The company is currently involved in multiple derivative actions and class action lawsuits alleging breaches of fiduciary duties and seeking unspecified damages[106][107][108]. - The company has consolidated several derivative actions under the caption In re Vestis Corporation Derivative Litigation, indicating ongoing legal challenges[110]. - The company has entered into agreements with Aramark following its separation, establishing rights and obligations related to asset transfers and liabilities[118]. Business Operations and Strategy - The Company completed the spin-off of Vestis on September 30, 2023, distributing approximately 131.2 million shares of common stock to Aramark stockholders[29]. - The Company initiated a multi-year business transformation and restructuring plan with estimated costs of approximately $25 million to $30 million[55]. - During the first quarter of fiscal 2026, the Company recognized severance and related employee costs of $5.5 million, compared to $4.3 million for the same period in the previous year[58]. - As of January 2, 2026, accrued severance and related employee obligations were $7.3 million, slightly down from $7.4 million as of October 3, 2025[58]. Financial Instruments and Risks - The Company is exposed to foreign currency risk due to revenues and profits being denominated in foreign currencies, with no financial instruments currently used to manage this risk[190]. - Interest rate risk remains a concern as the Company's Term Loan Facilities bear interest at variable rates, potentially increasing debt servicing costs[191]. - The Company is also exposed to commodity price risk, particularly related to gasoline, diesel, and natural gas, and manages this through normal operations and commodity derivative agreements[192].

Financial Performance - Revenue for Q1 2026 totaled $663.4 million, a decrease of $20.4 million or 3.0% year-over-year[9] - Adjusted EBITDA for Q1 2026 was $70.4 million, representing 10.6% of revenue, down from $81.2 million or 11.9% in Q1 2025[11] - Net loss for Q1 2026 was $6.4 million or $(0.05) per diluted share, compared to a net income of $0.8 million or $0.01 per diluted share in Q1 2025[10] - Revenue for the three months ended January 2, 2026, was $663,388,000, a decrease of 2% from $683,780,000 for the same period in 2024[41] - Operating income for the same period was $16,578,000, down 45.5% from $30,399,000 in the prior year[41] - Net loss for the three months ended January 2, 2026, was $(6,391,000), compared to a net income of $832,000 for the same period in 2024[41] - Adjusted Basic EPS and Adjusted Diluted EPS for the current period were both $(0.05), compared to $0.01 in the prior year[41][26] - Adjusted EBITDA for the trailing twelve months ended January 2, 2026, was $246,606 thousand, down from $257,425 thousand in the previous period[51] - Adjusted net income for the three months ended January 2, 2026, was $13,129 thousand, compared to $18,149 thousand in the same period in 2024[49] - The adjusted EBITDA margin (Non-GAAP) for the three months ended January 2, 2026, was 10.6%, compared to 11.9% for the same period in 2024[49] Cash Flow and Liquidity - Free Cash Flow for Q1 2026 was $28.3 million, with Adjusted Free Cash Flow increasing by $53.9 million compared to Q1 2025[13] - Free Cash Flow for the three months ended January 2, 2026, was $37,687,000, significantly higher than $3,780,000 for the same period in 2024[45] - Cash and cash equivalents increased to $41,547,000 as of January 2, 2026, from $29,748,000 at the end of the previous quarter[43] - The company had available liquidity of $316.7 million, including $41.5 million in cash and cash equivalents[6] Debt and Liabilities - The company plans to use proceeds from the sale of non-core properties to repay debt[8] - Net debt as of January 2, 2026, was $1,288,509 thousand, slightly down from $1,310,875 thousand as of October 3, 2025[51] - Total principal debt outstanding as of January 2, 2026, was $1,161,500 thousand, compared to $1,168,500 thousand as of October 3, 2025[51] - Total liabilities decreased to $2,019,593,000 from $2,041,256,000 in the previous quarter[43] - The Net Leverage Ratio is calculated as Net Debt divided by Trailing Twelve Months Covenant Adjusted EBITDA, indicating the company's ability to meet future financial obligations[28] - The net leverage ratio (Non-GAAP) as of January 2, 2026, was 4.83, compared to 4.72 in the previous period[51] Operational Efficiency - Plant productivity improved by 7%, on-time deliveries increased by 3%, and customer complaints decreased by 12% compared to Q1 2025[7] - Revenue per Pound for the period reflects pricing and product mix relative to processing volume, providing insight into operational efficiency[37] Future Outlook - The company expects fiscal 2026 revenue to be flat to down 2% and Adjusted EBITDA to range between $285 million and $315 million[16] - Adjusted EBITDA is expected to improve approximately 5% sequentially for each remaining quarter of fiscal 2026[17] - The strategic business transformation plan is expected to generate annual operating cost savings of at least $75 million by the end of fiscal 2026[4]

Core Viewpoint - Kahn Swick & Foti, LLC has initiated an investigation into Vestis Corporation following significant financial disclosures and a related securities class action lawsuit against the company and its executives [1][2][3]. Financial Performance - In May 2025, Vestis Corporation announced its 2Q 2025 financial results, retracting its revenue and growth guidance for the full fiscal year 2025, citing "lost business in excess of new business" and "lower adds over stops" as primary reasons for the disappointing outlook [2]. Legal Issues - The company and certain executives are facing a securities class action lawsuit for allegedly failing to disclose material information, which is currently ongoing [2]. - KSF's investigation is focused on whether Vestis' officers and/or directors breached their fiduciary duties to shareholders or violated state or federal laws [3]. Company Background - Kahn Swick & Foti, LLC is recognized as a leading boutique securities litigation law firm, with a strong track record in recovering investment losses due to corporate fraud or malfeasance [4].

Core Insights - Riverwater Partners' Small Cap Strategy reported solid results for Q3 2025 but lagged behind the benchmark due to the market's preference for lower-quality companies [1] - The strategy focuses on higher-quality companies with strong fundamentals and a clear path to profitability, positioning itself well for challenging market conditions [1] - Vestis Corporation (NYSE:VSTS) was highlighted as a stock of interest, showing a one-month return of 38.46% but a significant 53.07% decline over the past 52 weeks [2] Company Analysis - Vestis Corporation is undergoing a business turnaround, which is expected to take longer than initially anticipated, compounded by a debt overhang that may hinder reinvestment [3] - The company is not among the 30 most popular stocks among hedge funds, with 27 hedge fund portfolios holding its shares at the end of Q3 2025, down from 34 in the previous quarter [4] - While Vestis Corporation has potential, the company is viewed as less favorable compared to certain AI stocks that are believed to offer greater upside potential and lower downside risk [4]

Core Viewpoint - Vestis Corp. (VSTS) continues to hold a "hold" rating due to a lack of immediate turnaround signs in its performance [1] Group 1: Company Analysis - The analyst previously assigned a "hold" rating to Vestis Corp. as there were no tangible signs of improvement [1] - The investment strategy employed by the analyst includes fundamental, technical, and momentum investing approaches, indicating a comprehensive analysis of the company's performance [1] Group 2: Investor Perspective - The individual investor focuses on managing personal capital accumulated over the years, suggesting a long-term investment approach [1] - The purpose of writing on Seeking Alpha is to track investment ideas and connect with like-minded investors, highlighting the importance of community in investment strategies [1]