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Vestis Corporation (VSTS), a wholesale distributor of miscellaneous nondurable goods with annual revenues of $2.8 billion and a market capitalization of $2.1 billion, has announced significant changes to its executive team. According to InvestingPro data, the company maintains strong liquidity with a current ratio of 1.73, indicating solid financial footing as it navigates this transition.
Timothy Donovan, the Executive Vice President, Chief Legal Officer, and General Counsel, informed the company of his retirement effective February 14, 2025. The following day, Rick Dillon, Executive Vice President and Chief Financial Officer, also decided to depart from his role on the same date. The company clarified that Dillon’s exit does not stem from any disagreements regarding operations, policies, or practices.
In a swift move to fill the vacancy, Vestis appointed Kelly C. Janzen as the new Executive Vice President and Chief Financial Officer, effective February 14, 2025. The appointment comes at a crucial time, as InvestingPro analysis shows four analysts have recently revised their earnings expectations downward, though the company is still expected to remain profitable this year with projected earnings of $0.66 per share.
Janzen, 52, has been serving as a finance consultant for Vestis since October 2024 and boasts a robust financial background, with previous roles including Finance Executive at Fernweh Group and senior financial positions at BlueLinx Corporation, WestRock (NYSE:WRK) Company, Baker Hughes (NASDAQ:BKR), and McDermott International Ltd.
Under the terms of the Employment Agreement dated January 29, 2025, Janzen will receive an initial annual base salary of $610,000, with a target annual bonus of 75% of her base salary. The agreement also includes an annual equity or equity-based award with a target value of $1,000,000, subject to approval by the company’s Human Resources and Compensation Committee.
Additional benefits include a monthly car allowance, reimbursement for financial planning services, and eligibility for standard employee benefits and executive perks.
The Employment Agreement outlines severance terms for Janzen, including salary continuation, bonus payments, and benefits continuation under certain termination conditions. Furthermore, it includes restrictive covenants encompassing non-disclosure, non-disparagement, and post-employment non-competition clauses.
This leadership transition comes at a time when Vestis Corp is navigating a competitive industry landscape, with the company trading at a relatively high P/E ratio of 102.4 while maintaining a strong free cash flow yield. The changes are detailed in an 8-K filing with the SEC, which serves as the basis for this report.
For deeper insights into Vestis’s financial health and future prospects, InvestingPro subscribers can access the comprehensive Pro Research Report, which includes detailed analysis of the company’s valuation metrics, growth potential, and industry positioning among 1,400+ top US stocks.
In other recent news, Vestis Corporation reported its Q4 earnings and revenue, both of which fell short of analyst expectations. The company announced adjusted earnings per share of $0.14, missing the consensus of $0.22 by $0.08. Revenue was reported at $684 million, below the anticipated $724.72 million and down 4.7% from the same quarter last year.
Despite these results, CEO Kim Scott expressed confidence in the company’s progress. Vestis also announced executive changes, with CFO Rick Dillon departing and Kelly Janzen stepping in as the new CFO. The company’s board declared a quarterly cash dividend of $0.035 per share.
For the fiscal year 2025, Vestis reaffirmed its revenue guidance of $2.8 billion to $2.83 billion, matching the analyst consensus. The company also maintained its adjusted EBITDA outlook of $345 million to $360 million.
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