Companies /Industrials

Vestis Corporation

NYSE: VSTS Rental & Leasing Services
$12.75
▼ $0.28 (−2.15%) today
Markets closed · 3:44am ET

Q2 2025 Earnings

Reported May 6, 2025, 4:12pm ET · SEC source
$-0.05
Miss −133.81%
EPS · est. $0.15
$665.2M
Miss −3.70%
Revenue · est. $690.8M
+10.4%
Beating market
VSTS vs S&P since report
3 quarters
Consecutive EPS beats

Market Reaction

% change · around the report
−20%0+20%May 6May 7report 4:12pm ETearnings+0.5%−21.4%
−20%0+20%May 6May 7earnings+0.5%−21.4%
VSTS −21.4%S&P 500 +0.5%
−20%0+20%May 6May 7report 4:12pm ETearnings+0.5%−21.4%
−20%0+20%May 6May 7earnings+0.5%−21.4%
VSTS −21.4%NASDAQ +0.5%
0+20%+40%May 5May 14report 4:12pm ETearnings+5.3%−1.1%
0+20%+40%May 5May 14earnings+5.3%−1.1%
VSTS −1.1%S&P 500 +5.3%
0+20%+40%May 5May 14report 4:12pm ETearnings+7.9%−1.1%
0+20%+40%May 5May 14earnings+7.9%−1.1%
VSTS −1.1%NASDAQ +7.9%
−37.54%
Day of report
+15.26%
Next session
+12.13%
One week
+17.28%
30 days

S&P 500 over the same 30 days: +6.87%.

Did VSTS Beat Earnings? Q2 2025 Results

Vestis Corporation delivered a sharply disappointing fiscal second quarter 2025, swinging to a loss of $0.05 per diluted share against a consensus estimate of $0.15, a miss of 133.81%, while revenue fell 5.7% year-over-year to $665.25 million, coming in 3.70% below the $690.81 million analysts had expected. The primary culprit was a combination of net customer losses outpacing new wins, weaker volumes from existing accounts, and a $15.00 million one-time bad debt reserve charge that, alongside roughly $10.00 million in executive exit costs, pushed the company to an operating loss of $8.57 million versus operating income of $43.05 million a year ago. Adjusted EBITDA cratered 45% to $47.62 million, and Moody's responded by downgrading Vestis's corporate family rating to B2, citing diminished earnings expectations through 2026. The company eliminated its dividend and restricted buybacks as it works to reduce net leverage from 4.16x toward a long-term target below 3.0x, while guiding for fiscal Q3 revenue of $674 million to $682 million and Adjusted EBITDA of at least $63 million.

Key Takeaways
  • $17.5 million decline from lost business in excess of new business
  • $5.8 million decline in revenue from existing customers
  • $6.8 million decrease in direct sales from loss of a national account customer
  • $5.0 million from non-recurring customer exit billings in prior year
  • One-time $15 million bad debt reserve adjustment
  • Approximately $10 million in executive exit costs
  • Inventory investments to support new customers and advance tariff-related purchases

“We are disappointed with our second quarter results, which do not reflect the true potential of our business. As Interim CEO, I've been engaging with our teammates and focusing on our operations to drive immediate action.”

Vestis CEO, on the earnings call

Forward Guidance & Outlook

Vestis expects fiscal Q3 2025 revenue of $674 million to $682 million and Adjusted EBITDA of at least $63 million, representing growth versus Q2. The company shifted to quarterly guidance and is no longer providing full-year fiscal 2025 guidance or free cash flow guidance. Strategic priorities include disciplined capital allocation with deleveraging as the top priority, targeting a net leverage ratio below 3.0x over time. The dividend has been eliminated and share repurchases restricted through fiscal Q1 2027 or until net leverage falls below 4.50x for two consecutive quarters.

VSTS YoY Financials

Q2 2025 vs Q2 2024 · SEC filings Q2 2024 Q2 2025
$0$200.0M$400.0M$600.0M$705.4M$665.2MRevenue$165.7M$175.3MGross Profit
$0$200.0M$400.0M$600.0MRevenueGross Profit

VSTS Revenue by Segment

Workplace Supplies$410.4M−2.0%
Uniforms$254.8M−11.0%

VSTS Revenue by Geography

United States$606.1M−6.0%
Canada$59.2M−7.0%

Figures from SEC filings and company reports. Not investment advice.