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Vestis Q2 2025 Earnings Report
Vestis reported a decrease in revenue and an operating loss for the second quarter of fiscal year 2025, while also amending its credit agreement to enhance financial flexibility.
Key Takeaways
Vestis Corporation announced its second quarter fiscal 2025 results, reporting a revenue of $665 million and an operating loss of $9 million. The company's Adjusted EBITDA was $48 million, which includes a $15 million one-time bad debt expense. Despite the challenges, Vestis improved new customer sales and amended its credit agreement to strengthen its balance sheet and provide additional financial flexibility.
Second quarter fiscal 2025 revenue totaled $665.2 million, a decrease of $40.1 million year over year.
The company generated an operating loss of $8.6 million during the period, a decrease of $51.6 million compared to the second quarter of 2024.
Adjusted EBITDA was $47.6 million, inclusive of a $15.0 million one-time bad debt expense.
Vestis amended its credit agreement, extending the net leverage covenant ratio to 5.25x through the second quarter of fiscal 2026 and eliminating dividends to strengthen the balance sheet.
Vestis
Vestis
Forward Guidance
For the fiscal third quarter of 2025, Vestis expects revenue to be in the range of $674 million to $682 million and Adjusted EBITDA to be at least $63 million. The company will no longer provide full-year guidance for fiscal 2025 or guidance for free cash flow.
Positive Outlook
- Expected revenue for Q3 2025 is between $674 million and $682 million.
- Expected Adjusted EBITDA for Q3 2025 is at least $63 million.
- Strategic imperatives include disciplined capital allocation with deleveraging as a priority.
- Continued focus on driving free cash flow conversion over the long term.
- Appointment of Jim Barber as President and Chief Executive Officer, effective June 2, 2025.
Challenges Ahead
- No longer providing full-year guidance for fiscal 2025.
- No longer providing guidance for free cash flow.
- Forward-looking non-GAAP information cannot be reconciled to GAAP without unreasonable efforts.
- Future acquisitions, divestitures, restructurings, and asset impairments are difficult to predict.
- Estimates of revenue growth and adjusted EBITDA for fiscal year 2025 do not forecast currency fluctuations.