Vestis (VSTS) investor relations material

Executive summary

• Revenue for Q2 2026 was $659.4 million, down 0.9% year-over-year, with volume declining 1.2% but offset by improved pricing and product mix.

• Adjusted EBITDA rose 19.1% to $74.5 million (11.3% margin), driven by operational improvements and cost reductions.

• Net income turned positive at $2.6 million versus a net loss of $27.8 million in the prior year.

• Transformation initiatives delivered $15 million in realized cost savings year-to-date, with annualized savings expected to reach at least $75 million by year-end.

• Operational excellence initiatives improved plant productivity by 11% and on-time deliveries by 270 bps.

Financial highlights

• Adjusted EBITDA margin improved to 11.3% from 7.2% prior year.

• Free Cash Flow for Q2 was $45.6 million; Adjusted Free Cash Flow was $56.6 million, up $63.5 million year-over-year.

• SG&A declined $13.5 million or 12% year-over-year after adjusting for prior-year non-recurring items.

• Cash flow from operations for six months was $95.9 million, up from $10.4 million year-over-year.

• Debt repayment of $34 million during the quarter; available liquidity at quarter-end was $344.5 million, including $50.3 million in cash.

Outlook and guidance

• FY 2026 Adjusted EBITDA guidance raised to $295–$325 million; Free Cash Flow guidance raised to $120–$150 million.

• Revenue for FY 2026 expected to be flat to down 2% versus normalized FY 2025 revenue.

• Sequential Adjusted EBITDA growth of ~5% expected in Q3 and 5–10% in Q4 2026.

• Transformation plan expected to be substantially complete by end of fiscal 2027.

• Free Cash Flow outlook reflects $60–$70 million in annual capital expenditures and $30–$35 million in transformation expenses.