Here’s Why Vestis Corporation’s (VSTS) Revenue Dropped in Q2

Core Insights - Riverwater Partners' Small Cap Strategy underperformed the Russell 2000 in Q2 2025 due to a focus on defensive holdings and market preference for low-quality companies [1] - Vestis Corporation (NYSE:VSTS) experienced significant challenges, including a sharp decline in revenue and a net loss, leading to a 71.04% decrease in share value over the past year [2][3] Company Performance - Vestis Corporation's one-month return was -2.29%, with shares closing at $4.26 on September 08, 2025, and a market capitalization of $561.638 million [2] - The company's fiscal third quarter revenue decreased by 3.5% year-over-year to $674 million, indicating ongoing financial difficulties [4] Strategic Moves - In response to financial stress, Vestis eliminated its dividend and amended its credit agreement to improve liquidity, reflecting diminished investor confidence [3] - Despite holding a small position in Vestis, the company may consider selling if the situation does not improve [3] Hedge Fund Interest - Vestis Corporation was held by 34 hedge fund portfolios at the end of Q2 2025, down from 48 in the previous quarter, indicating reduced interest among institutional investors [4]