Vestis (VSTS) investor relations material

Executive summary

• Revenue declined 3.5% year-over-year to $673.8M in Q3 2025, mainly due to lost business and lower direct sales, resulting in a net loss of $0.7M for the quarter.

• Operating income fell to $25M, with adjusted EBITDA down 26.3% to $64M, reflecting higher selling expenses and adverse product mix.

• Leadership transition completed, with new CEO focused on operational discipline, commercial process improvements, and value-based pricing.

• Management is prioritizing operating leverage, cost optimization, and expects improvement initiatives to yield results in 2026.

• Amended credit agreement restricts dividends and share repurchases until leverage targets are met; company remains covenant compliant.

Financial highlights

• Q3 2025 revenue was $673.8M, down $24M or 3.5% year-over-year, with rental revenue down $18M and direct sales down $5.6M.

• Gross margin was 27.0%, down 200 basis points year-over-year, with gross profit at $182.1M.

• Adjusted EBITDA was $64M, margin 9.5%, down 295 bps year-over-year.

• Net loss for Q3 2025 was $0.7M, or $(0.01) per share, compared to $5.0M profit last year.

• Free cash flow was $8M, with available liquidity of $290M at quarter-end.

Outlook and guidance

• Near-term performance expected to mirror Q3 trends, with ongoing revenue pressure from churn and macroeconomic headwinds.

• Management is focused on operating leverage, value-based pricing, and product mix, with improvement initiatives expected to yield results in 2026.

• Operating plan for 2026 to be finalized by year-end, with detailed expectations to be shared in the next call.

• Management expects to remain covenant compliant under the amended credit agreement.

• No specific forward guidance provided; future impairment charges possible if performance or market capitalization declines.