Vestis 2025 Q4 Earnings Net Loss Widens 446.1% Despite 4.1% Revenue Growth

Vestis (VSTS) reported mixed fourth-quarter results on Dec 1, 2025, with revenue rising 4.1% to $712.01 million but a net loss expanding to $12.55 million. The company’s non-GAAP EPS of $0.03 missed estimates by $0.03, while management outlined a restructuring plan targeting $75 million in annual cost savings.

Revenue

Vestis’s total revenue for Q4 2025 grew to $712.01 million, a 4.1% increase from $684.28 million in the prior year. This growth was driven by an additional week of operations, which added $51.6 million to revenue. Excluding the extra week, revenue fell 3.5% year-over-year, reflecting a $18.1 million decline in rental revenue due to lost business, a $5 million drop in direct sales, and negative currency impacts from Canadian operations.

Earnings/Net Income

The company’s losses widened significantly, with a net loss of $12.55 million ($0.10 per share) in Q4 2025, a 446.1% increase from the $2.30 million loss in Q4 2024. Adjusted net income was $4 million ($0.03 per share), below the $0.02 per share loss a year earlier. The EPS miss and deteriorating profitability highlight operational challenges despite stable quarterly performance over the past three years.

Post-Earnings Price Action Review

The strategy of buying Vestis shares on earnings release and holding for 30 days generated a 4.3% annualized return over three years, underperforming the S&P 500’s 8.6%. While the stock surged 6.75% in the week following the earnings release, it plummeted 9.08% in after-hours trading, underscoring its volatility. Broader market conditions and investor sentiment further amplified risks, with the stock’s post-earnings decline reflecting uncertainty around its restructuring efforts.

CEO Commentary

Jim Barber, President and CEO, emphasized Vestis’s transformation plan focused on Commercial Excellence, Operational Excellence, and Asset & Network Optimization. The plan aims to unlock $75 million in annual operating cost savings by fiscal 2026, with Kelly Janzen, CFO, prioritizing near-term profitability and cash flow to strengthen the balance sheet.

Guidance

Vestis expects fiscal 2026 revenue to remain flat to decline 2% compared to normalized 2025 levels, with Adjusted EBITDA projected between $285 million and $315 million. Free Cash Flow is anticipated to range from $50 million to $60 million, despite restructuring costs of $25 million to $30 million. Risks include macroeconomic pressures and execution uncertainties.

Additional News

Vestis announced a multi-year restructuring plan targeting $75 million in annual operating cost savings by fiscal 2026, with a focus on streamlining operations and enhancing customer service. CEO Jim Barber highlighted the plan’s emphasis on Commercial Excellence and Operational Excellence, while CFO Kelly Janzen reiterated priorities to boost profitability and cash flow. The company’s stock dropped 5.5% after hours following the earnings report, reflecting investor skepticism about its ability to meet revised guidance.