Latest news with #Vestis
Yahoo
20-05-2025
- Business
- Yahoo
VSTS Q1 Earnings Call: Revenue Miss, Service Challenges, and Leadership Transition Shape Outlook
Uniform rental provider Vestis Corporation (NYSE:VSTS) fell short of the market's revenue expectations in Q1 CY2025, with sales falling 5.7% year on year to $665.2 million. On the other hand, the company expects next quarter's revenue to be around $678 million, close to analysts' estimates. Its non-GAAP loss of $0.05 per share was significantly below analysts' consensus estimates. Is now the time to buy VSTS? Find out in our full research report (it's free). Revenue: $665.2 million vs analyst estimates of $693 million (5.7% year-on-year decline, 4% miss) Adjusted EPS: -$0.05 vs analyst estimates of $0.15 (significant miss) Adjusted EBITDA: $47.62 million vs analyst estimates of $83.07 million (7.2% margin, 42.7% miss) Revenue Guidance for Q2 CY2025 is $678 million at the midpoint, roughly in line with what analysts were expecting EBITDA guidance for Q2 CY2025 is $63 million at the midpoint, below analyst estimates of $89.75 million Operating Margin: -1.3%, down from 6.1% in the same quarter last year Free Cash Flow was -$6.85 million, down from $63.16 million in the same quarter last year Market Capitalization: $814.4 million Vestis Corporation's first quarter results reflected operational challenges stemming from volume declines and ongoing customer service issues, as discussed by interim CEO Phillip Holloman. The company faced revenue headwinds as rental sales fell short of expectations, primarily due to lower demand from hospitality customers post-holiday and a drop in billings for lost or ruined inventory. Management also cited seasonal factors and continuing service-related credits as key contributors to underperformance. Looking ahead, Vestis leadership shifted to providing only quarterly guidance, citing both the need to realign internal forecasting and external macroeconomic uncertainty. The company expects slight sequential revenue improvement, but margins are projected to remain pressured. Holloman emphasized ongoing investments in customer service and operational efficiency, while incoming CEO Jim Barber's leadership transition is expected to influence future strategy and execution. CFO Kelly Janzen noted, 'We are encouraged by recent trends,' but acknowledged the need for continued improvements in retention and service delivery. Vestis management attributed the latest quarter's shortfall to internal operational issues and seasonal demand factors, while highlighting steps underway to stabilize performance and support future growth. Leadership transition announced: Former UPS COO Jim Barber was appointed as the incoming CEO, effective June 2025, signaling a shift in leadership focus. Customer service focus: Management acknowledged that service deficiencies, such as product shortages and cleaning quality, drove increased credits issued to customers, adversely affecting revenue. Sales team ramp-up: The frontline sales organization is now fully staffed, with productivity per sales representative rising 10% over the quarter, supporting improved new business wins. Lost versus new business: Although lost business still exceeded new wins, the gap narrowed by about 10% quarter-over-quarter, and new customer installations rose 35% year-over-year. Operational changes and cost control: The company continued plant consolidations and asset utilization initiatives, while emphasizing the need to balance cost reductions with investments to retain customers and enhance service. Management's outlook for the next quarter is shaped by ongoing investments in service and sales capacity, tempered by the need to address persistent cost pressures and internal execution risks. Customer retention improvements: The company is prioritizing service enhancements and operational reliability to reduce customer churn, which management believes is essential for stabilizing revenue. Margin recovery efforts: Efforts to improve gross margin include stricter control over service credits, optimization of facility operations, and reduced discretionary spending. CEO transition impact: The incoming CEO is expected to evaluate further strategic and operational changes, potentially increasing investment to drive a turnaround in customer service and sales effectiveness. Andy Wittmann (Baird): Asked about management's confidence that this quarter marks the bottom and whether operational service issues are being resolved. Management cited improving monthly revenue trends but acknowledged the need for sustained progress. Shlomo Rosenbaum (Stifel): Inquired about the duration and required investment of the cultural transformation to address recurring service issues. Leadership described a renewed focus on accountability and customer-centric operations, but emphasized it will take time. Luke McFadden (William Blair): Sought clarity on when new business is expected to exceed lost business. The company expressed optimism, citing increased sales team productivity but did not provide a specific timeline. Ronan Kennedy (Barclays): Asked whether revenue declines and suspended guidance were due to internal factors or broader market trends. Management confirmed most issues were internal, especially related to customer retention and service. Stephanie Moore (Jefferies): Requested details on how Vestis differentiates itself to win new customers given recent service challenges. Management highlighted that 56% of new wins came from competitors and pointed to new service tools and processes. In the upcoming quarters, the StockStory team will monitor (1) whether service initiatives succeed in reducing customer churn and credits, (2) the impact of the CEO transition on operational strategy and execution, and (3) the ability of the fully staffed sales team to convert increased pipeline activity into sustained revenue growth. Improvements in free cash flow and margin stabilization will also be key areas of focus. Vestis currently trades at a forward P/E ratio of 7.8×. Should you double down or take your chips? See for yourself in our free research report. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
Yahoo
09-05-2025
- Business
- Yahoo
Q1 Earnings Highs And Lows: Cintas (NASDAQ:CTAS) Vs The Rest Of The Industrial & Environmental Services Stocks
Quarterly earnings results are a good time to check in on a company's progress, especially compared to its peers in the same sector. Today we are looking at Cintas (NASDAQ:CTAS) and the best and worst performers in the industrial & environmental services industry. Growing regulatory pressure on environmental compliance and increasing corporate ESG commitments should buoy the sector for years to come. On the other hand, environmental regulations continue to evolve, and this may require costly upgrades, volatility in commodity waste and recycling markets, and labor shortages in industrial services. As for digitization, a theme that is impacting nearly every industry, the increasing use of data, analytics, and automation will give rise to improved efficiency of operations. Conversely, though, the benefits of digitization also come with challenges of integrating new technologies into legacy systems. The 7 industrial & environmental services stocks we track reported a strong Q1. As a group, revenues beat analysts' consensus estimates by 3.1% while next quarter's revenue guidance was 2.3% above. Thankfully, share prices of the companies have been resilient as they are up 6.8% on average since the latest earnings results. Starting as a family business collecting and cleaning shop rags in Cincinnati, Cintas (NASDAQ:CTAS) provides corporate identity uniforms, facility services, and safety products to over one million businesses across North America. Cintas reported revenues of $2.61 billion, up 8.4% year on year. This print was in line with analysts' expectations, and overall, it was a strong quarter for the company with a solid beat of analysts' EPS estimates and a narrow beat of analysts' full-year EPS guidance estimates. Interestingly, the stock is up 10.9% since reporting and currently trades at $214.61. We think Cintas is a good business, but is it a buy today? Read our full report here, it's free. With roots dating back to 1869 and a focus on creating cleaner industrial operations, CECO Environmental (NASDAQ:CECO) provides technology and expertise that helps industrial companies reduce emissions, treat water, and improve energy efficiency across various sectors. CECO Environmental reported revenues of $176.7 million, up 39.9% year on year, outperforming analysts' expectations by 17%. The business had a stunning quarter with a solid beat of analysts' EPS estimates and full-year revenue guidance beating analysts' expectations. CECO Environmental pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 37.4% since reporting. It currently trades at $26.38. Is now the time to buy CECO Environmental? Access our full analysis of the earnings results here, it's free. Operating a network of more than 350 facilities with 3,300 delivery routes serving customers weekly, Vestis (NYSE:VSTS) provides uniform rentals, workplace supplies, and facility services to over 300,000 business locations across the United States and Canada. Vestis reported revenues of $665.2 million, down 5.7% year on year, falling short of analysts' expectations by 4%. It was a softer quarter as it posted a significant miss of analysts' EPS estimates. Vestis delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 32.4% since the results and currently trades at $5.89. Read our full analysis of Vestis's results here. With a fleet of trucks making weekly deliveries to over 300,000 customer locations, UniFirst (NYSE:UNF) provides, rents, cleans, and maintains workplace uniforms and protective clothing for businesses across various industries. UniFirst reported revenues of $602.2 million, up 1.9% year on year. This number met analysts' expectations. Overall, it was a strong quarter as it also recorded a solid beat of analysts' full-year EPS guidance estimates. The stock is up 5% since reporting and currently trades at $183.53. Read our full, actionable report on UniFirst here, it's free. With a 50-year legacy of "Leading with Science" and operations on all seven continents, Tetra Tech (NASDAQ:TTEK) provides high-end consulting and engineering services focused on water management, environmental solutions, and sustainable infrastructure for government and commercial clients worldwide. Tetra Tech reported revenues of $1.10 billion, up 4.9% year on year. This result topped analysts' expectations by 6.6%. It was a strong quarter as it also produced an impressive beat of analysts' EPS guidance for next quarter estimates and revenue guidance for next quarter exceeding analysts' expectations. Tetra Tech achieved the highest full-year guidance raise among its peers. The stock is up 14% since reporting and currently trades at $35.19. Read our full, actionable report on Tetra Tech here, it's free. As a result of the Fed's rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed's 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump's victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025. Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. Join Paid Stock Investor Research Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.
Yahoo
07-05-2025
- Business
- Yahoo
Why Vestis (VSTS) Shares Are Sliding Today
What Happened? Shares of uniform rental provider Vestis Corporation (NYSE:VSTS) fell 37.5% in the afternoon session after the company reported disappointing first-quarter 2025 results, which missed across the board and included guidance that fell well short of expectations. The big hit came from lost deals and weaker sales to current clients, along with the loss of a big national account. Revenue dropped 6%, and even after removing a one-time charge, profit still fell from last year. The company gave a weak outlook for next quarter and pulled its full-year forecast, pointing to shaky demand. There were no redeeming qualities here. The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Vestis? Access our full analysis report here, it's free. What The Market Is Telling Us Vestis's shares are quite volatile and have had 16 moves greater than 5% over the last year. But moves this big are rare even for Vestis and indicate this news significantly impacted the market's perception of the business. Vestis is down 65.1% since the beginning of the year, and at $5.34 per share, it is trading 67.9% below its 52-week high of $16.62 from December 2024. Investors who bought $1,000 worth of Vestis's shares at the IPO in September 2023 would now be looking at an investment worth $277.31. Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.
Yahoo
07-05-2025
- Business
- Yahoo
Vestis (NYSE:VSTS) Reports Sales Below Analyst Estimates In Q1 Earnings, Stock Drops 25.9%
Uniform rental provider Vestis Corporation (NYSE:VSTS) missed Wall Street's revenue expectations in Q1 CY2025, with sales falling 5.7% year on year to $665.2 million. Next quarter's revenue guidance of $678 million underwhelmed, coming in 4.8% below analysts' estimates. Its non-GAAP loss of $0.05 per share was significantly below analysts' consensus estimates. Is now the time to buy Vestis? Find out in our full research report. Vestis (VSTS) Q1 CY2025 Highlights: Revenue: $665.2 million vs analyst estimates of $693 million (5.7% year-on-year decline, 4% miss) Adjusted EPS: -$0.05 vs analyst estimates of $0.15 (significant miss) Adjusted EBITDA: $47.62 million vs analyst estimates of $83.07 million (7.2% margin, 42.7% miss) Revenue Guidance for Q2 CY2025 is $678 million at the midpoint, below analyst estimates of $711.8 million EBITDA guidance for Q2 CY2025 is $63 million at the midpoint, below analyst estimates of $89.75 million Operating Margin: -1.3%, down from 6.1% in the same quarter last year Free Cash Flow was -$6.85 million, down from $63.16 million in the same quarter last year Market Capitalization: $1.17 billion 'We are disappointed with our second quarter results, which do not reflect the true potential of our business. As Interim CEO, I've been engaging with our teammates and focusing on our operations to drive immediate action,' said Phillip Holloman, Interim Executive Chairman, President and CEO. Company Overview Operating a network of more than 350 facilities with 3,300 delivery routes serving customers weekly, Vestis (NYSE:VSTS) provides uniform rentals, workplace supplies, and facility services to over 300,000 business locations across the United States and Canada. Sales Growth Reviewing a company's long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. With $2.73 billion in revenue over the past 12 months, Vestis is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. As you can see below, Vestis grew its sales at a sluggish 2.7% compounded annual growth rate over the last four years. This shows it failed to generate demand in any major way and is a rough starting point for our analysis. Vestis Quarterly Revenue We at StockStory place the most emphasis on long-term growth, but within business services, a stretched historical view may miss recent innovations or disruptive industry trends. Vestis's recent performance shows its demand has slowed as its revenue was flat over the last two years.
Business Wire
06-05-2025
- Business
- Business Wire
Vestis Appoints Jim Barber as President and Chief Executive Officer
ATLANTA--(BUSINESS WIRE)--Vestis Corporation (NYSE: VSTS) ('Vestis' or the 'Company'), a leading provider of uniforms and workplace supplies, today announced the appointment of Jim Barber as President and Chief Executive Officer and as a member of the company's Board of Directors (the 'Board'), effective June 2, 2025. Mr. Barber succeeds Phillip Holloman, who has been serving as Interim Executive Chairman, President and Chief Executive Officer since March 18, 2025. Mr. Holloman will return to his role as Chairman of the Board following the transition. Mr. Barber brings more than 35 years of relevant logistics, operations and route-based experience, having served in several leadership positions at UPS and on multiple public company boards. As the next President and CEO, he will be responsible for overseeing all aspects of the company's business, including operational excellence, customer service, talent and growth. He will focus on enhancing Vestis' strategy, delivering exceptional service for its customers and driving long-term performance improvement for its shareholders. 'I am pleased to welcome Jim Barber as our next President and CEO and am confident he has the right skills and experience to lead Vestis forward,' said Mr. Holloman. 'Jim is a proven leader with a track record of driving profitable growth, making him well suited to drive the next chapter of our strategy, with a focus on enhancing execution and instilling a customer-centric mindset throughout the organization. I look forward to partnering with Jim to capture the significant opportunity ahead in the attractive uniform rental, direct sales and workplace supplies market and drive long-term value for our shareholders.' Mr. Barber joins Vestis following a distinguished career at UPS, where he most recently served as Chief Operating Officer and was responsible for overseeing a highly complex, global route-based delivery network. He began his career at UPS as a delivery driver and held several roles of increasing leadership responsibility, including President of UPS International and President of UPS Europe. Mr. Barber currently serves on the board of directors for C.H. Robinson and previously served on the boards of US Foods, UNICEF USA and the Folks Center for International Business at the University of South Carolina's Darla Moore School of Business. 'I am honored to be appointed President and CEO and look forward to working alongside Phillip, the Board and the talented team at Vestis,' said Mr. Barber. 'I see exciting opportunities ahead as we focus on delivering for our customers and driving value for our shareholders through a commitment to operational excellence and best-in-class service.' Fiscal Second Quarter 2025 Results In a separate press release today, Vestis reported its fiscal second quarter 2025 earnings results. Management will host a webcast to discuss the fiscal second quarter 2025 earnings results on Wednesday, May 7, 2025, at 9:00 AM ET. The webcast can be accessed live through the investor relations section of our website at About Vestis™ Vestis is a leader in the B2B uniform and workplace supplies category. Vestis provides uniform services and workplace supplies to a broad range of North American customers from Fortune 500 companies to locally owned small businesses across a broad set of end sectors. The Company's comprehensive service offering primarily includes a full-service uniform rental program, floor mats, towels, linens, managed restroom services, first aid supplies, and cleanroom and other specialty garment processing. Forward-Looking Statements This press release contains 'forward-looking statements' within the meaning of the securities laws. All statements that reflect our expectations, assumptions or projections about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, forecasts relating to discussions of future operations and financial performance and statements regarding our strategy for growth, future product development, regulatory approvals, competitive position and expenditures. In some cases, forward-looking statements can be identified by words such as 'outlook,' 'anticipate,' 'continue,' 'estimate,' 'expect,' 'will,' and 'believe,' and other words and terms of similar meaning or the negative versions of such words. These forward-looking statements are subject to risks and uncertainties that may change at any time, and actual results or outcomes may differ materially from those that we expected. Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict including, but not limited to: unfavorable economic conditions; increases in fuel and energy costs; the failure to retain current customers, renew existing customer contracts and obtain new customer contracts; natural disasters, global calamities, climate change, pandemics, strikes and other adverse incidents; increased operating costs and obstacles to cost recovery due to the pricing and cancellation terms of our support services contracts; a determination by our customers to reduce their outsourcing or use of preferred vendors; risks associated with suppliers from whom our products are sourced; challenge of contracts by our customers; our expansion strategy and our ability to successfully integrate the businesses we acquire and costs and timing related thereto; currency risks and other risks associated with international operations; our inability to hire and retain key or sufficient qualified personnel or increases in labor costs; continued or further unionization of our workforce; liability resulting from our participation in multiemployer-defined benefit pension plans; liability associated with noncompliance with applicable law or other governmental regulations; laws and governmental regulations including those relating to the environment, wage and hour and government contracting; increases or changes in income tax rates or tax-related laws; risks related to recent U.S. tariff announcements; new interpretations of or changes in the enforcement of the government regulatory framework; a cybersecurity incident or other disruptions in the availability of our computer systems or privacy breaches; stakeholder expectations relating to environmental, social and governance considerations; any failure by Aramark to perform its obligations under the various separation agreements entered into in connection with the separation and distribution; a determination by the IRS that the distribution or certain related transactions are taxable; and the and the timing and occurrence (or non-occurrence) of other transactions, events and circumstances which may be beyond our control. The above list of factors is not exhaustive or necessarily in order of importance. For additional information on identifying factors that may cause actual results to vary materially from those stated in forward-looking statements, see Vestis' filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it is made, and we assume no obligation to update or revise such statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
