Group 1: Vestis Corporation Overview - Vestis' recent stock rally is driven by optimism regarding its business strength, supported by healthy growth in its customer base [1] - The company is focusing on enhancing workforce productivity, optimizing network logistics, and managing operational costs and merchandise inventory, which is expected to positively impact its performance [1] - Vestis shares increased by 5.1% to close at $16.39, with trading volume significantly higher than normal, contrasting with a 0.2% loss over the past four weeks [4] Group 2: Earnings Estimates and Trends - The consensus EPS estimate for Vestis has been revised 25% lower over the last 30 days, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [2] - Empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements, highlighting the importance of monitoring these trends [5] Group 3: Industry Context - Vestis operates within the Zacks Uniform and Related industry, which includes UniFirst (UNF), another company in the same sector [6] - UniFirst's consensus EPS estimate remains unchanged at $2.27, reflecting a year-over-year change of -4.6%, and it currently holds a Zacks Rank of 4 (Sell) [3] - UniFirst is expected to report quarterly earnings of $0.12 per share, representing a year-over-year decline of 45.5%, with revenues projected at $686.74 million, down 4.3% from the previous year [7]

Group 1 - The article discusses Vestis Corp. (NYSE: VSTS) and previously assigned a hold rating due to uncertainty about the company's turnaround [1] - The author emphasizes a diverse investment approach, incorporating fundamental, technical, and momentum investing strategies [1] - The purpose of writing on Seeking Alpha is to track investment ideas and connect with like-minded investors [1] Group 2 - There is no disclosure of stock, options, or similar derivative positions in any mentioned companies [2] - The article expresses the author's personal opinions without compensation from any company [2] - Seeking Alpha clarifies that past performance does not guarantee future results and does not provide specific investment recommendations [3]

Financial Performance - Vestis generated revenue of approximately $2.8 billion in fiscal year 2024, with operating income of $158.0 million (5.6% of revenue) and net income of $21.0 million (0.7% of revenue)[34] - 94% of Vestis' total revenue in fiscal year 2024 came from its recurring rental business, while 6% was from direct sales[34] - Approximately 9% of the company's consolidated revenue and profit are generated from foreign denominated revenue and profit[341] - Each 1% increase in interest rates on the Term Loan Facilities would increase annual interest expense by approximately $12 million, with $1,163 million aggregate principal amount outstanding as of September 27, 2024[342] Customer Base and Market Presence - Vestis serves over 300,000 customer locations across the United States and Canada, with its top 10 customers accounting for less than 15% of total revenue[41] - The company serves over 95% of the largest metropolitan statistical areas in the United States and every province in Canada, enabling it to serve large, national customers[59] - The company delivers to over 300,000 customer locations and maintains long-term relationships with customers due to the quality of its services and products[60] - The company's customer base includes small family-owned operations and large corporations, with most customers served under multi-year contracts[44] Operations and Facilities - The company operates over 350 sites, including laundry plants, distribution centers, and manufacturing plants, supported by approximately 19,600 employees[31] - The company operates a network of over 350 facilities, including laundry plants, satellite plants, distribution centers, and manufacturing plants, supported by a fleet of service vehicles covering over 3,300 pick-up and delivery routes[53] - Approximately 60% of the company's uniforms and linens are manufactured in its two manufacturing plants in Mexico, which include 189,000 square feet of manufacturing capacity and a 107,000 square foot distribution facility[53] Leadership and Governance - The company's leadership team includes experienced executives recruited to lead Vestis as an independent, publicly traded company[32] - The company's Board of Directors is 60% from underrepresented groups, including 50% females, as of September 27, 2024[82] - The company's Board of Directors oversees ESG goals and objectives, supporting the implementation of ESG priorities and commitments[97] Products and Services - Vestis provides uniforms, workplace supplies, and contamination control products for industries such as manufacturing, healthcare, and food processing[30][42] Competition - Vestis faces competition from national, regional, and local providers, including Cintas Corporation and UniFirst Corporation[39] Growth Strategy - The company's strategy focuses on increasing revenue per stop through cross-selling, with current customers utilizing 30% to 40% of its full line of services and products[71] - The company is implementing targeted sales strategies to drive growth across high-value sectors, services, and products using enhanced data analytics[72] Cost Management - The company is focused on reducing operating costs through network optimization, workforce management, and merchandise inventory management[76][77][78] Sustainability and Environmental Initiatives - The company is committed to sustainability, minimizing fuel usage on routes, and reducing energy and water usage in laundry plant facilities[54] - The company has enhanced wash chemistry to conserve electricity, natural gas, and water, reducing washing machine run times, water temperatures, and rinse cycles[95] - The company uses telematics technology to reduce fuel usage by limiting idling through real-time, in-cab driver alerts[96] - The company does not anticipate any material expenditures for environmental remediation as of September 27, 2024[92] - The company actively manages sites requiring environmental remediation and monitoring in conjunction with regulators and partners[90] - The company invests in equipment, technology, and operating expenses for water treatment and waste removal to comply with environmental laws and regulations[92] Risk Management - The company is exposed to commodity price risks, primarily related to gasoline, diesel, and natural gas, but had no outstanding derivative arrangements as of September 27, 2024[344] Compliance and Ethics - The company's international private label garment manufacturers undergo annual third-party social compliance audits to ensure compliance with the Vendor Code of Conduct[94] Spin-off and Public Listing - The company completed its spin-off from Aramark on September 30, 2023, and began trading on the NYSE under the ticker symbol "VSTS" on October 2, 2023[33] Workforce - The company has approximately 19,600 employees, with 10,800 represented by labor unions as of September 27, 2024[81]

Fiscal Year 2024 Results - Revenue for Fiscal Year 2024 reached $2.81 billion, a decrease of 0.7% year-over-year[6] - Adjusted EBITDA for Fiscal Year 2024 was $353 million, with a margin of 12.6%[7] - Free Cash Flow for Fiscal Year 2024 amounted to $165 million, representing a 47% Free Cash Flow conversion rate[7] - Customer retention improved by 150 basis points in Fiscal Year 2024 compared to Fiscal Year 2023[8] - Net Debt to Adjusted EBITDA ratio stood at 3.6x, reflecting strong cash generation and debt reduction efforts[8] Q4 2024 Results - Revenue for Q4 2024 was $684 million, a decrease of 4.4% year-over-year[5] - Adjusted EBITDA for Q4 2024 was $81 million, resulting in an 11.8% margin[6] - Free Cash Flow for Q4 2024 was $40 million, with a 49% Free Cash Flow conversion rate[7] Fiscal Year 2025 Outlook - The company anticipates revenue between $2.8 billion and $2.83 billion, representing a growth of -0.2% to +0.9%[45] - Adjusted EBITDA is projected to be between $345 million and $360 million, with a margin of 12.3% to 12.7%[45] - The company targets a Free Cash Flow conversion rate of approximately 50% of Adjusted EBITDA[46]

Financial Data and Key Metrics Changes - Revenue for Q3 2024 was $698 million, a decrease of 1.6% year-over-year, with a sequential revenue decline of approximately 1% [6][17] - Adjusted EBITDA was $87 million, flat sequentially compared to Q2, and down approximately $20 million from Q3 2023, with an adjusted EBITDA margin of 12.4%, a decline of 260 basis points year-over-year [6][20][21] - Customer retention rates improved year-to-date by 210 basis points compared to fiscal 2023, indicating progress in stabilizing the business [8][17] Business Line Data and Key Metrics Changes - New business contributed approximately 800 basis points of growth in Q3, with 700 basis points from new customers and 100 basis points from route sales to existing customers [7][17] - Direct sales were down $3 million year-over-year, primarily due to lost revenue from a large national account [19] - The uniform business experienced a decline of 3.5% year-over-year, while workplace supplies remained flat [19] Market Data and Key Metrics Changes - The company faced approximately 900 basis points of revenue loss year-over-year due to customer losses, with 5% from known losses exiting fiscal 2023 and 4% from losses during the current fiscal year [18] - Pricing contributed 60 basis points to top-line growth, reflecting annual price increases and moderated off-cycle pricing [19] Company Strategy and Development Direction - The company is focused on improving operations and enhancing service levels to drive customer retention and growth [5][11] - A new Chief Operating Officer and Head of Sales have been appointed to streamline operations and accelerate growth [10][12] - The company aims to end fiscal 2024 with strength and is not providing guidance for fiscal 2025 until November [9][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of the business and the improvement of retention metrics, indicating a positive outlook for future growth [5][16] - The company is prioritizing deleveraging and has entered into an accounts receivable securitization facility to reduce net debt [15][24][26] - Management expects the underlying operating trends from Q3 to continue into Q4, despite some one-time benefits in Q3 that will not repeat [27][28] Other Important Information - The company has implemented a new customer delivery notification system to enhance customer experience [13][14] - A restructuring initiative is expected to generate approximately $8 million in annualized gross cost savings [11][12] Q&A Session Summary Question: Customer losses and their impact on future revenue - The management confirmed that the known customer losses in 2024 are less severe than in 2023, indicating a smaller revenue impact moving forward [30][31] Question: Pricing strategy and its effects - Management clarified that while there is positive pricing year-over-year, there is a sequential decline in realized pricing due to moderated pricing actions [34][35][36] Question: Recurring revenue customer retention - Management acknowledged some volatility in quarterly retention metrics but emphasized the year-to-date improvement as a positive trend [38][39] Question: Accounts receivable securitization facility - The facility is non-recourse to the company, allowing for early access to cash from receivables without impacting operating cash flow [40][41] Question: Operational improvements and service levels - Management is optimistic about ongoing efforts to enhance service levels, including on-time delivery and inventory management [64][67]

Financial Performance - Revenue for the three months ended June 28, 2024, was $698,248, a decrease of 1.6% from $709,384 for the same period in 2023[12]. - Operating income for the nine months ended June 28, 2024, was $128,175, down 20% from $160,134 for the same period in 2023[12]. - Net income for the nine months ended June 28, 2024, was $23,268, a decline of 80.5% compared to $119,186 for the same period in 2023[15]. - Net income for the quarter ending June 28, 2024, was $5.037 million, reflecting a decrease from the previous quarter[19]. - Net income for the three months ended June 28, 2024, was $5.0 million, representing a decrease of $43.8 million or 89.7% compared to $48.9 million for the same period in 2023[117]. - For the nine months ended June 28, 2024, revenue increased by $12.2 million or 0.6% to $2.12 billion, compared to $2.11 billion for the same period in 2023[119]. - The total revenue for the Company for the nine months ended June 28, 2024, was $2.12 billion, slightly up from $2.11 billion for the same period in 2023, an increase of 0.1%[79]. Assets and Liabilities - Total current assets remained stable at $1,019,957 as of June 28, 2024, compared to $1,019,965 on September 29, 2023[11]. - Total liabilities decreased to $2,244,453 as of June 28, 2024, from $2,279,764 on September 29, 2023[11]. - Cash and cash equivalents decreased to $29,098 as of June 28, 2024, from $36,051 at the beginning of the period[18]. - The Company’s total equity increased to $901,177 as of June 28, 2024, from $877,360 on September 29, 2023[11]. - The total principal debt issued by the Company as of June 28, 2024, was $1.42 billion, a decrease from $1.5 billion as of September 29, 2023[45]. - As of June 28, 2024, the company had approximately $29.1 million in cash and cash equivalents and $294.7 million available for borrowing under its Revolving Credit Facility[142]. Operating Expenses - Operating expenses for the three months ended June 28, 2024, totaled $660,725, an increase of 2.8% from $643,017 for the same period in 2023[12]. - The company incurred interest expenses of $29,386 for the three months ended June 28, 2024, compared to $83 for the same period in 2023[12]. - The Company recorded severance charges of $1.0 million and $1.4 million for the three and nine months ended June 28, 2024, respectively[42]. - Selling, general and administrative expenses rose by $17.9 million or 4.9% for the nine months ended June 28, 2024, largely due to incremental public company costs[121]. Segment Performance - Total revenue for the United States segment was $636.8 million for the three months ended June 28, 2024, compared to $646.4 million for the same period in 2023, reflecting a decrease of 1.8%[79]. - Total revenue for the Canada segment was $61.4 million for the three months ended June 28, 2024, down from $63.0 million in the same period of 2023, a decrease of 2.5%[79]. - United States segment operating income for the three months ended June 28, 2024, was $64.5 million, down $19.6 million or 23.3% compared to the same period in 2023[126]. - Canada segment operating income for the three months ended June 28, 2024, was $1.3 million, down $2.0 million or 60.6% compared to the same period in 2023[134]. Cash Flow - Net cash provided by operating activities increased to $176.2 million for the nine months ended June 28, 2024, compared to $143.9 million for the same period in 2023, driven by a change in cash from operating assets and liabilities of $135.1 million[145]. - Cash used in financing activities included payments of long-term borrowings totaling $879.5 million and proceeds from long-term borrowings of $798.0 million during the nine months ended June 28, 2024[147]. Dividends and Shareholder Returns - The company declared dividends of $0.035 per common share, totaling $4.603 million for the quarter ending June 28, 2024[19]. - The company declared a quarterly cash dividend of $0.035 per common share, amounting to $4.6 million, payable on July 2, 2024[97]. Legal and Compliance - The Company has provided for a settlement of $3.1 million related to a class action lawsuit, which has been fully accounted for in the financial statements[72]. - A putative class action lawsuit was filed against the company alleging false or misleading statements related to its business and operations, seeking unspecified damages[167]. Accounting and Standards - The Company adopted new accounting standards effective in the first quarter of fiscal 2024, which did not impact the Consolidated Financial Statements[30][31]. - The Company is currently evaluating the impact of new accounting standards issued in December 2023 and November 2023 on its disclosures[32][33]. Miscellaneous - The company completed a spin-off from Aramark on September 30, 2023, issuing approximately 131.2 million shares of common stock[24]. - The company began trading as an independent, publicly traded company under the stock symbol "VSTS" on October 2, 2023, following its separation from Aramark[89]. - The company received three federal trademark registrations for its "Vestis" trademarks and associated logos on April 30, 2024[165].

Based in Roswell, Georgia, Vestis is a provider of uniforms and workplace supplies in the United States and Canada. The Company was created as the result of its September 30, 2023 spinoff from food services and facilities management provider Aramark. Vestis began trading on the New York Stock Exchange on October 2, 2023, the first day of the Class Period, under the ticker symbol "VSTS." If you are a long-term stockholder of Vestis, have information, would like to learn more about these claims, or have any q ...

Core Viewpoint - The Gross Law Firm has issued a notice to shareholders of Vestis Corporation (NYSE: VSTS) regarding a class action lawsuit due to alleged misleading statements and operational deficiencies during the class period from October 2, 2023, to May 1, 2024 [1][2]. Summary by Relevant Sections Allegations - The complaint alleges that during the class period, Vestis Corporation's management made materially false and misleading statements, failing to disclose critical issues such as: - Aramark's historical underinvestment in the business that became Vestis [2] - Vestis operating with outdated facilities and an underperforming sales force [2] - These operational deficiencies led to "service gaps," hindering growth and resulting in customer attrition [2] - Consequently, the defendants' statements regarding Vestis's business, operations, and prospects were materially false and lacked a reasonable basis [2] Class Action Details - The class period for the lawsuit is defined as October 2, 2023, to May 1, 2024 [2] - The deadline for shareholders to register for the class action is July 16, 2024 [3][4] - Shareholders are encouraged to register to potentially become lead plaintiffs, although this is not a requirement for recovery [1][4] Next Steps for Shareholders - Registered shareholders will be enrolled in a portfolio monitoring software to receive updates throughout the case [4] - Participation in the case incurs no cost or obligation for shareholders [4]

WHY LEVI & KORSINSKY: Over the past 20 years, the team at Levi & Korsinsky has secured hundreds of millions of dollars for aggrieved shareholders and built a track record of winning high-stakes cases. Our firm has extensive expertise representing investors in complex securities litigation and a team of over 70 employees to serve our clients. For seven years in a row, Levi & Korsinsky has ranked in ISS Securities Class Action Services' Top 50 Report as one of the top securities litigation firms in the United ...

NEW YORK, July 09, 2024 (GLOBE NEWSWIRE) -- The Gross Law Firm issues the following notice to shareholders of Vestis Corporation (NYSE: VSTS). CLASS PERIOD: October 2, 2023 to May 1, 2024 NEXT STEPS FOR SHAREHOLDERS: Once you register as a shareholder who purchased shares of VSTS during the timeframe listed above, you will be enrolled in a portfolio monitoring software to provide you with status updates throughout the lifecycle of the case. The deadline to seek to be a lead plaintiff is July 16, 2024. There ...