Vestis (VSTS) Q2 2026 earnings summary

Executive summary

• Revenue for Q2 2026 was $659.4 million, down 0.9% year-over-year, with volume in pounds processed declining 1.2% but offset by improved pricing and product mix.

• Adjusted EBITDA rose 19.1% to $74.5 million (11.3% margin), driven by operational improvements and cost control.

• Net income turned positive at $2.6 million, compared to a net loss of $27.8 million in the prior year.

• Transformation plan and operational excellence initiatives delivered measurable progress, including $15 million in realized cost savings year-to-date and a target of $75 million annualized by year-end.

• Focused on disciplined execution, cost control, and value creation through improved culture, accountability, and commercial discipline.

Financial highlights

• Adjusted EBITDA was $74.5 million (11.3% margin), up from $47.6 million (7.2% margin) in Q2 2025.

• Q2 revenue was $659.4 million, down 0.9% year-over-year, with a $2.7 million FX benefit.

• Adjusted Net Income for Q2 2026 was $21.8 million ($0.16 per diluted share).

• Free Cash Flow for the quarter was $45.6 million; Adjusted Free Cash Flow was $56.6 million, up $63.5 million year-over-year.

• Cost per pound improved by $0.02 year-over-year, driven by plant productivity and cost control.

Outlook and guidance

• FY 2026 Adjusted EBITDA guidance raised to $295–$325 million (midpoint up $10 million); Free Cash Flow guidance raised to $120–$150 million (midpoint up $80 million).

• Sequential Adjusted EBITDA growth of ~5% expected in Q3 and 5–10% in Q4 2026.

• Fiscal 2026 revenue expected to be flat to down 2% year-over-year, excluding the 53rd week last year.

• Anticipate return to top-line growth in Q4 2026.

• Transformation plan expected to be substantially complete by end of fiscal 2027, with anticipated cost savings and enhanced revenue.