Vestis Q3 revenue misses estimates on lower volumes

Overview

• Uniforms and workplace supplies provider's fiscal Q3 revenue declined 1.8% yr/yr, missing analyst expectations

• Adjusted net income for fiscal Q3 beat analyst expectations

• Company raised full-year 2026 free cash flow outlook by $30 mln, citing strong execution

Outlook

• Vestis raises FY 2026 Free Cash Flow outlook to $160 mln-$170 mln

• Company maintains FY 2026 revenue outlook of flat to down 2% vs normalized 2025 revenue

• Vestis sees FY 2026 Adjusted EBITDA of $310 mln-$315 mln, up $2.5 mln at midpoint

Result Drivers

• LOWER VOLUME OFFSET BY PRICING - Co said a 4.5% decline in pounds processed weighed on revenue, but was partly offset by improved pricing and product mix

• OPERATIONAL IMPROVEMENTS - Co cited reduced operating expenses and improved plant productivity, including a 9% gain in plant productivity and lower cost of services

• PRICING INITIATIVES - Co said pricing and segmentation initiatives led to a 3% increase in revenue per pound and year-over-year revenue growth in its Canadian segment

Company press release: ID:nBwDqsqba

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 3 "hold" and 3 "sell" or "strong sell"

• The average consensus recommendation for the personal services peer group is "buy."

• Wall Street's median 12-month price target for Vestis Corporation is $10.00, about 27.9% below its August 10 closing price of $13.87

• The stock recently traded at 22 times the next 12-month earnings vs. a P/E of 20 three months ago

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For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)