Vestis VSTS

NYSE VSTS

$12.52 +0.04 (+0.32%)

As of: Aug 31, 2026 · 3:59 PM EDT

Key Stats

Market Cap1.64 Bn

P/E-309.82

P/S0.61

Div. Yield0.00

ROIC (Qtr)0.00

Total Debt (Qtr)1.09 Bn

Revenue Growth (1y) (Qtr)-1.80

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About

Vestis Corporation is a leading provider of uniform rentals and workplace supplies in the United States and Canada. The company specializes in delivering uniforms, mats, towels, linens, restroom supplies, first-aid supplies, safety products, and other essential workplace items to businesses across diverse industries. With over 75 years of experience, Vestis operates a vast network of facilities and a fleet of service vehicles to support its recurring service model, which…

Vestis generates revenue primarily through its uniform rental and workplace supply services, which accounted for 95% of its $2.7 billion in fiscal 2025 revenue. The remaining 5% comes from direct sales of customized uniforms and related products. The company’s business model relies on recurring, contracted services, providing predictable revenue streams. Customers benefit from cost efficiencies, enhanced brand image, and operational focus, as Vestis handles the design, delivery, laundering, and replacement of uniforms and supplies on a weekly basis.

The company operates through the following segments:

Uniform Rental and Workplace Supplies: This segment provides full-service uniform programs, including the design, sourcing, manufacturing, customization, delivery, laundering, sanitization, repair, and replacement of uniforms. It also supplies restroom products, first-aid kits, safety equipment, floor mats, towels, and linens. The segment serves industries such as manufacturing, hospitality, retail, food processing, healthcare, and automotive, offering both standard and specialized garments like flame-resistant, high-visibility, and contamination-control apparel.
Direct Sales: This segment focuses on the sale of customized uniforms and workplace supplies, typically to large regional or national companies. It complements the rental business by addressing customer needs that require one-time or bulk purchases rather than recurring services.

Vestis holds a prominent position in the highly fragmented uniform rental and workplace supplies industry, where competition is driven by product quality, service reliability, and pricing. The company is the second-largest provider in the United States and Canada, based on revenue, employee count, and facility footprint. Its key competitors include Cintas Corporation and UniFirst Corporation, alongside numerous regional and local providers. Vestis differentiates itself through its full-service offerings, extensive network of over 325 facilities, and long-standing customer relationships, which span more than 300,000 accounts. The company’s scale enables procurement efficiencies, route density, and operational cost advantages over smaller competitors.

Vestis serves a diverse customer base across industries such as manufacturing, hospitality, retail, food processing, pharmaceuticals, healthcare, and automotive. Its clients range from small, family-owned businesses to large national franchises and corporations with multiple locations. The company’s revenue is well-distributed, with its 10 largest customers accounting for less than 10% of total revenue in fiscal 2025. Vestis also caters to specialized sectors, including cleanroom environments for electronics, pharmaceuticals, and medical equipment manufacturing, where contamination control and static-free garments are critical.

Investment Thesis

▲ Bull case

Vestis is demonstrating tangible progress in its strategic transformation, with the company raising its full-year fiscal 2026 adjusted EBITDA guidance to $295 million-$325 million (midpoint $310 million) and free cash flow guidance to $120 million-$150 million, reflecting successful execution of its three-pillar plan that has already delivered $15 million in year-to-date cost savings and is now expected to yield $50 million in in-year benefits, up from the prior $40 million estimate. This operational improvement is evidenced by a $0.02 year-over-year reduction in cost per pound, driven by an 11% increase in plant productivity and a 12% decline in adjusted SG&A, which together fueled a 19% increase in adjusted EBITDA to $74.5 million despite a modest 0.9% revenue decline, signaling that the company is extracting more profit from its existing base through disciplined cost control and mix optimization.
The company’s commercial excellence initiatives are creating a sustainable foundation for top-line growth, with revenue per pound stabilizing at $1.37 (flat year-over-year and sequentially) after periods of decline, as intentional exits from low-margin linen business—where volume carried only ~$1 per pound—have improved revenue quality, and management confirmed a deliberate shift: reducing linen growth by 7% year-over-year while increasing garment growth by 5% year-over-year, positioning the business to capitalize on higher-margin uniform products as the product mix transition accelerates, with early signs of revenue growth returning in March and sequential adjusted EBITDA growth guided at 5% in Q3 and 5%-10% in Q4.
Vestis’s balance sheet is strengthening rapidly, with $34 million of debt repaid in Q2 using operating cash and asset sale proceeds, leaving no debt maturities until 2028 and $344 million of available liquidity ($294 million undrawn revolver, $50 million cash), while the disposition of 13 total properties (2 sold for $6.5 million, 11 marketed at ~$15 million) provides additional deleveraging flexibility, and the company’s net leverage ratio improved to 4.47x from 4.83x year-over-year, reflecting a de-risked capital structure that supports continued financial flexibility and positions Vestis to fund growth initiatives or further deleverage without constraint as transformation benefits compound.

Vestis is demonstrating tangible progress in its strategic transformation, with the company raising its full-year fiscal 2026 adjusted EBITDA guidance to $295 million-$325 million (midpoint $310 million) and free cash flow guidance to $120 million-$150 million, reflecting successful execution of its three-pillar plan that has already delivered $15 million in year-to-date cost savings and is now expected to yield $50 million in in-year benefits, up from the prior $40 million estimate. This operational improvement is evidenced by a $0.02 year-over-year reduction in cost per pound, driven by an 11% increase in plant productivity and a 12% decline in adjusted SG&A, which together fueled a 19% increase in adjusted EBITDA to $74.5 million despite a modest 0.9% revenue decline, signaling that the company is extracting more profit from its existing base through disciplined cost control and mix optimization.
The company’s commercial excellence initiatives are creating a sustainable foundation for top-line growth, with revenue per pound stabilizing at $1.37 (flat year-over-year and sequentially) after periods of decline, as intentional exits from low-margin linen business—where volume carried only ~$1 per pound—have improved revenue quality, and management confirmed a deliberate shift: reducing linen growth by 7% year-over-year while increasing garment growth by 5% year-over-year, positioning the business to capitalize on higher-margin uniform products as the product mix transition accelerates, with early signs of revenue growth returning in March and sequential adjusted EBITDA growth guided at 5% in Q3 and 5%-10% in Q4.
Vestis’s balance sheet is strengthening rapidly, with $34 million of debt repaid in Q2 using operating cash and asset sale proceeds, leaving no debt maturities until 2028 and $344 million of available liquidity ($294 million undrawn revolver, $50 million cash), while the disposition of 13 total properties (2 sold for $6.5 million, 11 marketed at ~$15 million) provides additional deleveraging flexibility, and the company’s net leverage ratio improved to 4.47x from 4.83x year-over-year, reflecting a de-risked capital structure that supports continued financial flexibility and positions Vestis to fund growth initiatives or further deleverage without constraint as transformation benefits compound.

▼ Bear case

Vestis’s revenue decline of 0.9% year-over-year, driven by a 1.2% volume loss, remains a persistent headwind despite management’s attribution of the loss to intentional low-margin exits, and the company has not provided clear evidence that the shift toward higher-margin garments is generating sufficient incremental revenue to offset the volume drag, especially as revenue per pound has only stabilized—not increased—suggesting pricing power remains limited and the mix shift may be more about shedding unprofitable business than capturing new profitable demand, leaving top-line growth dependent on uncertain execution of commercial initiatives that have yet to translate into measurable revenue expansion beyond stabilization.
The company’s free cash flow improvement, while impressive on a year-over-year basis ($74 million YTD vs. -$18 million prior year), contains significant non-recurring elements that may not persist, including ~$12 million in Q2 from one-time rental merchandise management benefits and ~$7 million from reduced sales commissions, with CFO Adam Bowen explicitly noting that operating working capital benefits are unlikely to continue at the same pace, implying that the full-year free cash flow guidance of $120-$150 million relies on assumptions about sustained working capital efficiency and continued transformation cost discipline that could falter if macroeconomic pressures or integration challenges arise, particularly as the company steps up capex to $60-$70 million and reduces transformation-related cash outflows from $11 million in Q2 to only $5 million per quarter in H2.
Vestis operates in a highly competitive, commoditized industry where pricing discipline is difficult to sustain long-term, and the company’s reliance on Market Development Representatives (MDRs) and national account renewals for growth introduces execution risk, as the success of these initiatives depends on overcoming entrenched customer relationships with competitors like Cintas and UniFirst, while macroeconomic headwinds—including potential tariff impacts, fuel cost volatility, and labor cost pressures—could erode margin gains from cost-per-pound improvements, especially given that the company’s effective tax rate guidance of 35%-40% leaves little room for error in converting operating leverage to net income, and the absence of any discussion about customer retention rates or contract renewal stability in the Q&A leaves a material gap in assessing the durability of its commercial turnaround.

Vestis’s revenue decline of 0.9% year-over-year, driven by a 1.2% volume loss, remains a persistent headwind despite management’s attribution of the loss to intentional low-margin exits, and the company has not provided clear evidence that the shift toward higher-margin garments is generating sufficient incremental revenue to offset the volume drag, especially as revenue per pound has only stabilized—not increased—suggesting pricing power remains limited and the mix shift may be more about shedding unprofitable business than capturing new profitable demand, leaving top-line growth dependent on uncertain execution of commercial initiatives that have yet to translate into measurable revenue expansion beyond stabilization.
The company’s free cash flow improvement, while impressive on a year-over-year basis ($74 million YTD vs. -$18 million prior year), contains significant non-recurring elements that may not persist, including ~$12 million in Q2 from one-time rental merchandise management benefits and ~$7 million from reduced sales commissions, with CFO Adam Bowen explicitly noting that operating working capital benefits are unlikely to continue at the same pace, implying that the full-year free cash flow guidance of $120-$150 million relies on assumptions about sustained working capital efficiency and continued transformation cost discipline that could falter if macroeconomic pressures or integration challenges arise, particularly as the company steps up capex to $60-$70 million and reduces transformation-related cash outflows from $11 million in Q2 to only $5 million per quarter in H2.
Vestis operates in a highly competitive, commoditized industry where pricing discipline is difficult to sustain long-term, and the company’s reliance on Market Development Representatives (MDRs) and national account renewals for growth introduces execution risk, as the success of these initiatives depends on overcoming entrenched customer relationships with competitors like Cintas and UniFirst, while macroeconomic headwinds—including potential tariff impacts, fuel cost volatility, and labor cost pressures—could erode margin gains from cost-per-pound improvements, especially given that the company’s effective tax rate guidance of 35%-40% leaves little room for error in converting operating leverage to net income, and the absence of any discussion about customer retention rates or contract renewal stability in the Q&A leaves a material gap in assessing the durability of its commercial turnaround.

Geographical Breakdown of Revenue (2025)

Peer group

Peer Comparison

Companies in the Rental & Leasing Services

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	SUNB	Sunbelt Rentals Holdings, Inc.	30.34 Bn	25.93	2.89	8.13 Bn
2	AER	AerCap Holdings N.V.	25.16 Bn	5.96	2.81	42.77 Bn
3	R	Ryder System Inc	9.39 Bn	18.93	0.73	7.46 Bn
4	GATX	Gatx Corp	6.25 Bn	26.60	3.05	-
5	CAR	Avis Budget Group, Inc.	5.18 Bn	-7.76	0.44	6.02 Bn
6	HRI	Herc Holdings Inc	5.08 Bn	103.76	1.05	7.92 Bn
7	EQPT	EquipmentShare.com Inc	4.46 Bn	153.85	2.63	3.64 Bn
8	WSC	WillScot Holdings Corp	3.73 Bn	-54.21	1.63	3.50 Bn

Vestis VSTS

About

Investment Thesis

Segments Breakdown of Revenue (2025)

Geographical Breakdown of Revenue (2025)

Peer Comparison

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