Vestis Corporation
Q1 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: −4.31%.
Did VSTS Beat Earnings? Q1 2026 Results
Vestis Corporation delivered a mixed fiscal Q1 2026, beating adjusted earnings expectations while falling short on the top line as the uniform services company navigates a broad operational turnaround. The company posted adjusted EPS of $0.10, edging past the $0.09 consensus estimate by 5.82%, but revenue of $663.39 million trailed the $674.48 million analyst expectation by 1.64% and slid 3.0% year over year. The shortfall was driven primarily by a $17.90 million drop in rental revenue tied to a product mix shift within workplace supplies toward lower-revenue-per-pound linen products, which pulled revenue per pound from $1.41 to $1.37. On a GAAP basis, Vestis recorded a net loss of $6.39 million, though sequential improvement from Q4 2025 was a notable theme, with Adjusted EBITDA climbing to $70.38 million from $64.66 million the prior quarter. Analysts lifted their consensus price target by roughly 29% following the print. Management reaffirmed its fiscal 2026 outlook, guiding for revenue flat to down 2% and Adjusted EBITDA of $285 million to $315 million, underpinned by a transformation plan targeting at least $75 million in annual cost savings by year-end.
- Revenue per pound decline of $0.04 driven by product mix shift toward linen and linen-adjacent products with lower revenue per pound
- Pre-transformation commercial practices that are no longer in effect contributed to revenue per pound decline
- Cost per pound improvement of $0.02 per pound on flat volume year-over-year
- Adjusted operating expenses declined $10 million or 2% from cost of service and SG&A improvements
- 7% improvement in plant productivity versus Q1 2025
- 3% improvement in on-time deliveries versus Q1 2025
- 12% reduction in customer complaints versus Q1 2025
- Working capital improvements contributed $12.7 million benefit to cash flow
- Business retention rate of 91.2%
“Our first quarter results reflect a solid start to our fiscal 2026 and strong execution against our business transformation plan focused on unlocking operating leverage while elevating the customer experience. Based on our performance to date and initiatives underway, we are reaffirming our fiscal 2026 outlook and expect continued sequential improvements in quarterly Adjusted EBITDA throughout the year.”
Vestis CEO, on the earnings call
Forward Guidance & Outlook
Vestis reaffirmed its fiscal 2026 outlook: revenue flat to down 2% versus FY 2025 on a 52-week basis, Adjusted EBITDA in the range of $285 million to $315 million, and Free Cash Flow in the range of $50 million to $60 million. The company expects Adjusted EBITDA to improve approximately 5% on a sequential basis for each of the remaining quarters of the fiscal year, driven by business transformation efforts and a reduction in operating cost per pound. The strategic business transformation plan is expected to generate annual operating cost savings of at least $75 million by the end of fiscal 2026.
VSTS YoY Financials
VSTS Revenue by Segment
VSTS Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.