Vestis 2025 Q2 Earnings Misses Targets as Net Income Drops 566.6%

Vestis(VSTS) reported its fiscal 2025 Q2 earnings on May 07th, 2025. The company missed expectations with a net income drop of 566.6% year-over-year, recording a net loss of $27.83 million compared to a net income of $5.96 million in the same quarter last year. The guidance for the third quarter reveals anticipated sequential improvement, with revenue expected between $674 million and $682 million and adjusted EBITDA of at least $63 million, signaling a cautious optimism despite recent performance setbacks.

Revenue

Earnings/Net Income
Vestis swung to a loss of $0.21 per share in 2025 Q2 from a profit of $0.05 per share in 2024 Q2 (520.0% negative change). Meanwhile, the company reported a net loss of $-27.83 million in 2025 Q2, reflecting a 566.6% deterioration from the net income of $5.96 million achieved in 2024 Q2. The Company has sustained profitability for 3 years over the corresponding fiscal quarter, reflecting stable business performance. The EPS reflects disappointing results, highlighting the company's challenges this quarter.

Price Action
The stock price of Vestis has edged down 0.00% during the latest trading day, has plummeted 37.90% during the most recent full trading week, and has plummeted 31.83% month-to-date.

Post-Earnings Price Action Review
Over the past five years, the strategy of buying VSTS shares following a revenue increase and holding for 30 days has not been successful. This approach has consistently underperformed the benchmark, yielding a return of -7.98% compared to a benchmark return of 28.14%. The negative excess return of -36.12% and a Sharpe ratio of -0.33 indicate that the strategy involves significant risk with adverse returns. This trend suggests that investors have not been rewarded for buying into VSTS after revenue rises, reflecting the stock's volatility and the company's inability to maintain consistent post-earnings growth.

CEO Commentary

Guidance

Additional News
In recent developments, Vestis Corporation has announced a significant leadership change with the appointment of Jim Barber as President and Chief Executive Officer, effective June 2, 2025. Barber, who brings extensive logistics and operational experience from his previous role as COO at UPS, succeeds Phillip Holloman. Meanwhile, the company has also amended its credit agreement, enhancing financial flexibility by extending the net leverage covenant ratio of 5.25x through Q2 2026. Additionally, Vestis has decided to eliminate dividends to strengthen its balance sheet, reflecting a strategic shift towards financial stability amid current challenges.