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Investing.com -- Vestis Corporation (NYSE:VSTS) shares tumbled 28.5% after the uniform and workplace supplies provider reported second-quarter earnings that fell well short of analyst expectations and issued weak guidance for the current quarter.
The company posted an adjusted loss of -$0.05 per share for the quarter ended March 28, 2025, compared to the analyst estimate of $0.29 profit. Revenue came in at $665 million, missing the consensus forecast of $767 million and declining 5.7% YoY.
Vestis attributed the revenue decline primarily to lost business exceeding new business wins, lower demand from existing customers, and the loss of a national account. The company also recorded a one-time $15 million bad debt expense in the quarter.
For the third quarter, Vestis expects revenue between $674 million and $682 million, below analysts’ projections of $710.2 million. The company also withdrew its full-year 2025 guidance.
"We are disappointed with our second quarter results, which do not reflect the true potential of our business," said Phillip Holloman, Interim Executive Chairman, President and CEO.
In response to the weak performance, Vestis amended its credit agreements to increase financial flexibility and eliminated its dividend to strengthen its balance sheet. The company’s net leverage ratio stood at 4.16x at quarter-end, up from 3.62x at the end of fiscal 2024.
Vestis also announced the appointment of Jim Barber as its new President and CEO effective June 2, 2025, replacing Holloman who has been serving in an interim capacity since March.
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