Vestis’s fourth quarter results were met with a significantly positive market response, as investors focused on early signs of progress in the company’s business transformation efforts. Management pointed to improved operational execution, with CEO James Jay Barber highlighting a 7% increase in plant productivity and a 12% reduction in customer complaints. Notably, the company saw a 15% decline in average weekly lost business, viewed as leading indicators of greater efficiency and customer retention. Barber emphasized that these improvements are “not just statistics; they are leading indicators of operational efficiency and profitability.”
Is now the time to buy VSTS? Find out in our full research report (it’s free for active Edge members).
Vestis (VSTS) Q4 CY2025 Highlights:
- Revenue: $663.4 million vs analyst estimates of $664.7 million (3.2% year-on-year decline, in line)
- EPS (GAAP): -$0.05 vs analyst estimates of -$0.02 ($0.03 miss)
- Adjusted EBITDA: $70.38 million vs analyst estimates of $69.05 million (10.6% margin, 1.9% beat)
- EBITDA guidance for the full year is $300 million at the midpoint, above analyst estimates of $295.8 million
- Operating Margin: 2.5%, down from 4.4% in the same quarter last year
- Market Capitalization: $1.02 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Vestis’s Q4 Earnings Call
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John Ronan Kennedy (Barclays): Asked about trends in revenue per pound and the drivers behind its improvement. CFO Adam Bowen explained that improvement will come from shifting product mix and pricing, but will occur gradually.
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John Ronan Kennedy (Barclays): Inquired about the assumptions behind sequential EBITDA growth. Bowen pointed to cost per pound improvements and the incremental impact of transformation initiatives as the primary drivers.
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Stephanie Moore (Jefferies): Asked if macroeconomic or customer demand trends were a factor. Bowen responded that volumes remained stable, and CEO James Jay Barber emphasized the company’s internal transformation was more important than macro trends in the near term.
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Stephanie Moore (Jefferies): Sought an update on transformation progress. Barber described the company as being in the “first inning” of its effort, with improvements expected to be gradual and cumulative.
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Tim Mulvaney (William Blair): Asked for clarity on plant productivity improvements and the relationship to cost per pound. COO Bill Seward detailed that productivity gains are measured per operating hour and are being tracked daily to drive both cost and service improvements.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be monitoring (1) the pace and effectiveness of Vestis’s product mix and pricing initiatives, (2) continued gains in plant productivity and cost per pound improvements, and (3) progress on asset sales and debt reduction. Additionally, we will watch for signs that operational enhancements are translating into improved customer retention and higher-margin growth opportunities.
Vestis currently trades at $7.70, up from $7.32 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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