Vestis Corporation (NYSE:VSTS) reported first-quarter fiscal 2026 results on Tuesday that missed market expectations, as softer revenue weighed on profitability.
The uniform and workplace supplies provider posted adjusted earnings of $0.10 per share, well below the analyst consensus of $0.27. Revenue totaled $663.4 million, missing forecasts of $763.69 million and marking a 3% year-on-year decline. Shares were flat in pre-market trading following the announcement.
During the quarter, rental revenue declined by $17.9 million compared with the prior year, while direct sales revenue slipped by $2.7 million. Vestis also reported a net loss of $6.4 million, or -$0.05 per diluted share, versus net income of $0.8 million, or $0.01 per diluted share, in the same period last year.
Despite the weaker-than-expected quarter, the company reiterated its full-year outlook. Vestis continues to expect fiscal 2026 revenue to be flat to down 2%, adjusted EBITDA of $285 million to $315 million, and free cash flow in the range of $50 million to $60 million.
“Our first quarter results reflect a solid start to our fiscal 2026 and strong execution against our business transformation plan focused on unlocking operating leverage while elevating the customer experience,” said Jim Barber, President and CEO. “Based on our performance to date and initiatives underway, we are reaffirming our fiscal 2026 outlook and expect continued sequential improvements in quarterly Adjusted EBITDA throughout the year.”
Adjusted EBITDA for the quarter came in at $70.4 million, representing 10.6% of revenue, down from $81.2 million, or 11.9% of revenue, a year earlier. The decline was driven by a 2.8% drop in revenue per pound, partially offset by cost improvements tied to the company’s ongoing transformation efforts.
Vestis said its business transformation plan remains on track to deliver at least $75 million in annual operating cost savings by the end of fiscal 2026. In the first quarter, the company reported a 7% improvement in plant productivity, a 3% increase in on-time deliveries, and a 12% reduction in customer complaints compared with the same period last year.