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Mar 29, 2024
Vestis Q2 2024 Earnings Report
Reported Q2 2024 results, showing revenue increase and updated full-year outlook.
Key Takeaways
Vestis Corporation reported a 0.9% increase in revenue to $705 million for Q2 2024. Despite a decrease in operating income and adjusted EBITDA, the company demonstrated strong cash flow generation, with operating cash flow up 85% and free cash flow up 107% year-over-year. The company updated its fiscal year 2024 outlook, expecting revenue growth in the range of -1% to 0% and adjusted EBITDA margin between 12.0% and 12.4%.
Revenue increased by 0.9% year-over-year to $705 million, or 2.8% excluding FX impact and prior year temporary energy fee.
Operating income was $43 million, representing 6.1% of revenue.
Operating cash flow reached $127.5 million year-to-date, an 85% increase year-over-year.
Free cash flow totaled $97.7 million year-to-date, a 107% increase year-over-year.
Vestis
Vestis
Forward Guidance
Vestis expects fiscal year 2024 revenue growth to be in the range of -1% to 0% and adjusted EBITDA margin between 12.0% and 12.4%.
Positive Outlook
- Actively pursuing a portfolio of cost efficiency programs.
- Accelerating logistics and merchandise optimization.
- Identifying and implementing the optimal organization structure to accelerate growth.
- Disciplined capital allocation with deleveraging as a priority.
- Expect strong free cash flow conversion and anticipate a ratio of free cash flow to net income greater than or equal to 100%.
Challenges Ahead
- Expect to deliver fiscal 2024 revenue growth in the range of (1)% to 0%.
- Adjusted EBITDA margin is now expected to be between 12.0% and 12.4%.
- Continue to expect $15 to $18 million in incremental public company costs in the period.
- Results in the quarter and outlook for the year are not in line with expectations
- Navigating short-term challenges.