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ATLANTA - Vestis Corporation (NYSE:VSTS) reported disappointing fourth quarter results on Monday, with earnings and revenue falling short of analyst expectations, sending shares down 5.5% after hours following the announcement.
The uniform and workplace supplies provider posted adjusted earnings of $0.03 per share for the fourth quarter, significantly below the analyst consensus of $0.39 per share. Revenue came in at $712 million, missing the consensus estimate of $787.87 million, despite including an additional week of operations compared to the same period last year.
Excluding the impact of the extra week, which added $51.6 million to revenue, the company’s revenue actually declined 3.5% YoY. The decrease primarily reflected an $18.1 million drop in rental revenue due to lost business, a $5 million decline in direct sales, and negative currency impacts from its Canadian operations.
"We ended fiscal 2025 in a good position to advance our strategic priorities as we enter fiscal 2026," said Jim Barber, President and CEO. "Over the past several months, we have taken a close look at our commercial strategy as well as our operations and identified the actions needed to strengthen performance, unlock operating leverage, and better serve our customers."
The company announced a comprehensive multi-year transformation plan focused on three strategic pillars: Commercial Excellence, Operational Excellence, and Asset & Network Optimization. The plan is expected to generate annual operating cost savings of at least $75 million by the end of fiscal 2026.
For fiscal 2026, Vestis forecasts revenue to be between flat to down 2% compared to normalized fiscal 2025 revenue, with adjusted EBITDA projected between $285 million and $315 million. Free cash flow is expected to range from $50 million to $60 million.
"As we look ahead, our near-term focus is increasing both profitability and cash flow to lay the foundation for stronger, more durable financial performance going forward," said Kelly Janzen, Executive Vice President and Chief Financial Officer.
The company ended the quarter with $298 million in available liquidity, including $30 million in cash and cash equivalents.
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