Group 1 - Vestis (VSTS) reported quarterly earnings of $0.14 per share, exceeding the Zacks Consensus Estimate of $0.12 per share, but down from $0.22 per share a year ago, representing an earnings surprise of 16.67% [1] - The company posted revenues of $683.78 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.43%, and down from $717.92 million year-over-year [2] - Vestis has surpassed consensus EPS estimates two times over the last four quarters and has topped consensus revenue estimates just once during the same period [2] Group 2 - The stock's immediate price movement will depend on management's commentary during the earnings call and the sustainability of earnings expectations [3][4] - Vestis shares have increased approximately 3.9% since the beginning of the year, outperforming the S&P 500's gain of 3.2% [3] - The current consensus EPS estimate for the upcoming quarter is $0.14 on revenues of $696.59 million, and for the current fiscal year, it is $0.66 on revenues of $2.84 billion [7] Group 3 - The Zacks Industry Rank for Uniform and Related is currently in the top 7% of over 250 Zacks industries, indicating a favorable outlook for the industry [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - The estimate revisions trend for Vestis is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, suggesting it is expected to perform in line with the market in the near future [6]

Financial Performance - Vestis reported first quarter fiscal 2025 revenue of $683.8 million, a decrease of 4.7% compared to $717.9 million in the first quarter of fiscal 2024[4]. - Adjusted EBITDA for the first quarter fiscal 2025 was $81.2 million, down 17.4% from $98.4 million in the same period last year, but increased 0.9% sequentially from the fourth quarter of fiscal 2024[5]. - The company achieved an operating income of $30 million, reflecting a 2% sequential increase compared to the fourth quarter of fiscal 2024, with an operating margin of 4.4% remaining flat[6]. - Reported revenue for the three months ended December 27, 2024, was $621.7 million, a decrease of 4.8% compared to $653.2 million for the same period in 2023[38]. - Adjusted revenue (organic) for the same period was $621.7 million, reflecting a decline of 4.8% year-over-year[38]. - Operating income (as reported) decreased to $58.0 million from $74.1 million, representing a decline of 21.8%[38]. - Adjusted operating income (non-GAAP) was $63.4 million, down from $80.3 million, indicating a decrease of 21.0%[38]. - Adjusted EBITDA (non-GAAP) for the quarter was $90.6 million, compared to $106.3 million in the prior year, a decline of 14.8%[38]. - Net income (as reported) for the quarter was $0.8 million, significantly lower than $12.3 million in the same quarter last year[38]. - Adjusted net income (non-GAAP) was $18.1 million, down from $28.6 million, reflecting a decrease of 36.5%[38]. - Basic earnings per share for the quarter was $0.01, compared to $0.09 in the prior year[38]. - Adjusted diluted earnings per share was $0.14, down from $0.22 year-over-year[38]. - The company reported an adjusted operating income margin of 10.2% for the quarter, compared to 12.3% in the same period last year[38]. Cash Flow and Debt - Net cash provided by operating activities decreased to $3.8 million from $51.5 million in the comparable period of fiscal 2024, primarily due to lower operating income and timing shifts in accounts receivable collections[6]. - Total principal debt outstanding as of December 27, 2024, was $1.14 billion, resulting in a net leverage ratio of 3.80x, up from 3.62x at the end of fiscal 2024[7]. - Net cash used in financing activities increased from $21,645 million in December 2023 to $34,610 million in December 2024, an increase of approximately 60%[25]. - The company reported a significant increase in cash flows from investing activities, from a net cash outflow of $16,949 million in December 2023 to a net cash inflow of $17,854 million in December 2024[25]. Guidance and Future Outlook - The company reaffirmed its fiscal 2025 revenue guidance in the range of $2.8 billion to $2.83 billion and adjusted EBITDA guidance of $345 million to $360 million[9]. - Vestis anticipates a free cash flow to adjusted EBITDA ratio of approximately 50% for fiscal 2025[10]. - Vestis expects to achieve sequential improvement in results throughout the year, supporting a double-digit EBITDA growth rate heading into fiscal 2026[3]. Leadership Changes - The company is undergoing a transition in its finance leadership, with Rick Dillon leaving and Kelly Janzen appointed as the new CFO effective February 14, 2025[11]. Asset and Equity Changes - Total assets decreased from $2,932,387 million in September 2024 to $2,897,153 million in December 2024, a decline of approximately 1.2%[23]. - Total current liabilities decreased slightly from $456,102 million in September 2024 to $448,696 million in December 2024, a reduction of about 1.0%[23]. - Long-term borrowings decreased from $1,147,733 million in September 2024 to $1,128,444 million in December 2024, a decline of approximately 1.7%[23]. - Total equity decreased from $903,051 million in September 2024 to $899,590 million in December 2024, a decrease of about 0.5%[23]. - The company’s accumulated deficit in retained earnings changed from $2,565 million in September 2024 to $(1,213) million in December 2024, indicating a shift to a deficit position[23]. Non-GAAP Measures - The company emphasizes the importance of non-GAAP financial measures for evaluating operational performance, which may not be directly comparable to other companies[26].

Vestis Corporation - Vestis Corporation, spun off from Aramark in late 2023, is equal in size to UniFirst but less than a third of Cintas, making it a potential merger or buyout target [1] - The uniform industry remains fragmented despite years of consolidation, with Cintas as a potential buyer [1] - Several buyout firms have expressed interest in Vestis, but no firm offers are on the table [1] - Insiders have been actively buying Vestis shares in 2024, with nine insiders making 14 purchases, bringing their total holding to over 13% [9] - Institutional ownership of Vestis reached nearly 98% by late December 2024 [9] - Vestis pays a healthy dividend, less than 25% of its earnings, and has a solid balance sheet [20] OPKO Health - OPKO Health has numerous catalysts that could drive its share price up in 2025, including potential approvals for its key therapy, acquisitions, and normalization of its diagnostic business [11] - Analysts are optimistic about OPKO Health, with a consensus "Buy" rating and a projected 90% upside [11] - Insider activity in OPKO Health includes 24 purchases by seven insiders in 2024, making it the second most bought stock for the year [4] - However, the company has issued shares to raise capital, increasing the share count by more than 32%, and the $100 million share repurchase authorization may not be sufficient to offset the dilution [4] Greif, Inc - Greif, Inc is an industrial packaging company with a volatile share price but a solid bottom near $60, reinforced by insider buying at the low end of the range [12] - Insiders buying Greif shares include the CEO, CFO, and several directors [12] - Analysts view Greif as a deep value stock, with a consensus "Moderate Buy" rating and a potential upside of 10% to 20% [13] - Greif pays a dividend yield of 3.57% and has a price target of $78.67 [12] Institutional Activity - Institutions have been net buyers of shares in CQ1, Q2, and Q3 2024, with the largest shareholder being activist hedge fund Corvex Management, which owns more than 13% of the stock [2] - Institutional ownership of Greif is around 50%, with activity in 2024 aligning with buying at the low end and selling at the high end of the range [16] - Institutional activity in Q4 2024 is bullish, suggesting a potential rebound in the stock price [16] Industry Insights - The uniform industry remains fragmented, with Cintas as the industry leader and a potential buyer for Vestis [1] - Cintas is an example of a company capable of sustaining dividend payments, share buybacks, and self-funding growth [10] - Insider activity is significant in companies like Vestis, OPKO Health, and Greif, signaling higher-than-average conviction in the share price outlook [19]

Group 1: Vestis Corporation Overview - Vestis' recent stock rally is driven by optimism regarding its business strength, supported by healthy growth in its customer base [1] - The company is focusing on enhancing workforce productivity, optimizing network logistics, and managing operational costs and merchandise inventory, which is expected to positively impact its performance [1] - Vestis shares increased by 5.1% to close at $16.39, with trading volume significantly higher than normal, contrasting with a 0.2% loss over the past four weeks [4] Group 2: Earnings Estimates and Trends - The consensus EPS estimate for Vestis has been revised 25% lower over the last 30 days, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [2] - Empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements, highlighting the importance of monitoring these trends [5] Group 3: Industry Context - Vestis operates within the Zacks Uniform and Related industry, which includes UniFirst (UNF), another company in the same sector [6] - UniFirst's consensus EPS estimate remains unchanged at $2.27, reflecting a year-over-year change of -4.6%, and it currently holds a Zacks Rank of 4 (Sell) [3] - UniFirst is expected to report quarterly earnings of $0.12 per share, representing a year-over-year decline of 45.5%, with revenues projected at $686.74 million, down 4.3% from the previous year [7]

Group 1 - The article discusses Vestis Corp. (NYSE: VSTS) and previously assigned a hold rating due to uncertainty about the company's turnaround [1] - The author emphasizes a diverse investment approach, incorporating fundamental, technical, and momentum investing strategies [1] - The purpose of writing on Seeking Alpha is to track investment ideas and connect with like-minded investors [1] Group 2 - There is no disclosure of stock, options, or similar derivative positions in any mentioned companies [2] - The article expresses the author's personal opinions without compensation from any company [2] - Seeking Alpha clarifies that past performance does not guarantee future results and does not provide specific investment recommendations [3]

Financial Performance - Vestis generated revenue of approximately $2.8 billion in fiscal year 2024, with operating income of $158.0 million (5.6% of revenue) and net income of $21.0 million (0.7% of revenue)[34] - 94% of Vestis' total revenue in fiscal year 2024 came from its recurring rental business, while 6% was from direct sales[34] - Approximately 9% of the company's consolidated revenue and profit are generated from foreign denominated revenue and profit[341] - Each 1% increase in interest rates on the Term Loan Facilities would increase annual interest expense by approximately $12 million, with $1,163 million aggregate principal amount outstanding as of September 27, 2024[342] Customer Base and Market Presence - Vestis serves over 300,000 customer locations across the United States and Canada, with its top 10 customers accounting for less than 15% of total revenue[41] - The company serves over 95% of the largest metropolitan statistical areas in the United States and every province in Canada, enabling it to serve large, national customers[59] - The company delivers to over 300,000 customer locations and maintains long-term relationships with customers due to the quality of its services and products[60] - The company's customer base includes small family-owned operations and large corporations, with most customers served under multi-year contracts[44] Operations and Facilities - The company operates over 350 sites, including laundry plants, distribution centers, and manufacturing plants, supported by approximately 19,600 employees[31] - The company operates a network of over 350 facilities, including laundry plants, satellite plants, distribution centers, and manufacturing plants, supported by a fleet of service vehicles covering over 3,300 pick-up and delivery routes[53] - Approximately 60% of the company's uniforms and linens are manufactured in its two manufacturing plants in Mexico, which include 189,000 square feet of manufacturing capacity and a 107,000 square foot distribution facility[53] Leadership and Governance - The company's leadership team includes experienced executives recruited to lead Vestis as an independent, publicly traded company[32] - The company's Board of Directors is 60% from underrepresented groups, including 50% females, as of September 27, 2024[82] - The company's Board of Directors oversees ESG goals and objectives, supporting the implementation of ESG priorities and commitments[97] Products and Services - Vestis provides uniforms, workplace supplies, and contamination control products for industries such as manufacturing, healthcare, and food processing[30][42] Competition - Vestis faces competition from national, regional, and local providers, including Cintas Corporation and UniFirst Corporation[39] Growth Strategy - The company's strategy focuses on increasing revenue per stop through cross-selling, with current customers utilizing 30% to 40% of its full line of services and products[71] - The company is implementing targeted sales strategies to drive growth across high-value sectors, services, and products using enhanced data analytics[72] Cost Management - The company is focused on reducing operating costs through network optimization, workforce management, and merchandise inventory management[76][77][78] Sustainability and Environmental Initiatives - The company is committed to sustainability, minimizing fuel usage on routes, and reducing energy and water usage in laundry plant facilities[54] - The company has enhanced wash chemistry to conserve electricity, natural gas, and water, reducing washing machine run times, water temperatures, and rinse cycles[95] - The company uses telematics technology to reduce fuel usage by limiting idling through real-time, in-cab driver alerts[96] - The company does not anticipate any material expenditures for environmental remediation as of September 27, 2024[92] - The company actively manages sites requiring environmental remediation and monitoring in conjunction with regulators and partners[90] - The company invests in equipment, technology, and operating expenses for water treatment and waste removal to comply with environmental laws and regulations[92] Risk Management - The company is exposed to commodity price risks, primarily related to gasoline, diesel, and natural gas, but had no outstanding derivative arrangements as of September 27, 2024[344] Compliance and Ethics - The company's international private label garment manufacturers undergo annual third-party social compliance audits to ensure compliance with the Vendor Code of Conduct[94] Spin-off and Public Listing - The company completed its spin-off from Aramark on September 30, 2023, and began trading on the NYSE under the ticker symbol "VSTS" on October 2, 2023[33] Workforce - The company has approximately 19,600 employees, with 10,800 represented by labor unions as of September 27, 2024[81]

Vestis Corporation (NYSE:VSTS) Q4 2024 Earnings Conference Call November 21, 2024 8:30 AM ET Company Participants Michael Aurelio - IR Kimberly T. Scott - President and CEO Ricky T. Dillon - EVP and CFO Conference Call Participants Andrew Wittmann - Robert W. Baird Shlomo Rosenbaum - Stifel, Nicolaus & Company Harold Antor - Jefferies Ronan Kennedy - Barclays Oliver Davies - Redburn Limited George Tong - Goldman Sachs Andrew Steinerman - J.P. Morgan Operator Welcome to the Vestis Corporation Fiscal Fourth Q ...

Uniforms and Workplace Supplies Fourth Quarter and Fiscal 2024 Results November 21, 2024 Forward looking statements This presentation contains "forward-looking statements" within the meaning of the securities laws. All statements that reflect our expectations, assumptions or projections about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, statements relating to future operations and financial performance and statements regarding our strat ...

Vestis Reports Fourth Quarter and Fiscal 2024 Results Provides Fiscal 2025 Guidance Fiscal 2024 Results • Revenue of $2.8 billion • Operating Income of $158 million or 5.6% of revenue • Adjusted EBITDA of $353 million or 12.6% of revenue • Operating Cash Flow of $472 million, up 83.6% year-over-year • Free Cash Flow of $165 million, up 13.2% year-over-year • Net leverage was 3.62x at the end of fiscal 2024 versus 3.95x at the end of fiscal 2023 • Net debt was $1.3 billion at the end of fiscal 2024, a declin ...

Luis Alvarez/DigitalVision via Getty Images Investment overview I give a hold rating for Vestis Corp. (NYSE:VSTS), as the business has yet to show tangible organic growth improvements so far. While I do appreciate the developments so far (improved retention rates and an improved sales team), I think it is too early to conclude that VSTS has managed to turn things around. Hence, I believe VSTS will continue to trade at a discount to peers in the near term. Business description VSTS is the second-largest prov ...