Vestis Q2 2025: Unpacking Contradictions in Service, Revenue, and Strategic Direction

Service improvements and customer satisfaction, revenue growth and sales performance, pricing strategy and expectations, strategic alternatives evaluation, and customer retention and new business growth are the key contradictions discussed in Vestis's latest 2025Q2 earnings call.



Revenue Decline and Market Challenges:
- Vestis Corporation reported second quarter revenue of $665 million, which declined approximately $18 million from Q1, or 2.7%.
- The decline was attributed to a $15 million onetime bad debt adjustment and decreases in both direct sales and rental revenue.

Operational Improvements and Cost Management:
- The company is focusing on improving customer service and operational effectiveness, including enhancing route sales representative (RSR) productivity.
- These efforts are aimed at reducing customer credits, improving forecasting, and optimizing plant utilization to decrease costs.

Sales and New Business Growth:
- Frontline sales and national accounts installed 35% more recurring revenue year-over-year, with a 10% increase compared to last quarter.
- New business contributed 2.4% of revenue growth, exceeding lost business by the end of Q2.

Financial Performance and Guidance:
- Adjusted EBITDA was $63 million, representing a 9.4% margin, down 250 basis points from Q1.
- Guidance for the third quarter's revenue was provided at $674 million to $682 million, with adjusted EBITDA anticipated at least $63 million, indicating sequential improvement.