The raised FCF guidance is the standout catalyst — a 145% midpoint increase signals strong working capital discipline and transformation execution. However, the GAAP EPS miss and ongoing revenue decline cap the upside. Watch for sequential Adjusted EBITDA growth of ~5% in Q3 and 5-10% in Q4 as proof points. The stock may trade on the FCF upgrade near-term, but sustained revenue stabilization is needed for a full re-rating.
Price Chart
Executive Summary
Vestis reported FQ2 2026 GAAP EPS of $0.02 (vs consensus $0.08, a miss) and revenue of $659.4M (vs consensus $656.0M, a slight beat). Revenue declined 0.9% YoY, but the company swung to a GAAP net profit of $2.6M from a -$27.8M loss last year. The key positive was a raised FY2026 Adjusted EBITDA guidance midpoint by $10M to $310M and Free Cash Flow guidance midpoint by $80M to $135M, signaling confidence in the transformation plan's cash generation.
Key Financial Metrics
Key Facts
- Revenue $659.4M, down 0.9% YoY from $665.2M, slightly above $656.0M consensus
- GAAP diluted EPS $0.02 vs consensus $0.08 — a miss; Adjusted diluted EPS $0.16
- Adjusted EBITDA $74.5M (11.3% margin), up 19% YoY vs Covenant Adjusted EBITDA of $62.6M
- Raised FY2026 Adjusted EBITDA guidance to $295M-$325M (midpoint $310M, +$10M vs prior)
- Raised FY2026 Free Cash Flow guidance to $120M-$150M (midpoint $135M, +$80M vs prior)
- Repaid $34M of debt; Net leverage ratio improved to 4.47x from 4.83x in Q1
- Revenue per pound flat YoY for the first time as a public company; cost per pound down $0.02
Financial Impact
Adjusted EBITDA guidance raised by $10M at midpoint; FCF guidance raised by $80M at midpoint, implying ~$135M in FCF vs prior ~$55M
Risk Factors
- Revenue continues to decline (down 0.9% YoY) with volume down 1.2%
- GAAP EPS of $0.02 missed consensus of $0.08 by 75%
- Transformation plan carries execution risk; $30-35M in cash transformation costs expected in FY2026
- High net leverage at 4.47x limits financial flexibility
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001628280-26-033869 |
| Exhibit: ex992vestis2q26earningsd.htm | 0001628280-26-033869 |
| Document: vsts-20260512.htm | 0001628280-26-033869 |
| Document: 0001628280-26-033869-index-headers.html | 0001628280-26-033869 |
| Document: 0001628280-26-033869-index.html | 0001628280-26-033869 |
| Document: 0001628280-26-033869.txt | 0001628280-26-033869 |
| 8-K Data (Synthetic) | 0001628280-26-033869 |
Track record builds as more directional reports settle.
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Sep 3, 2026 29d ago | Insider Buy | $12.54 $12.97 | ▲ +3.43% | ▲ +4.58% | $14.04 (+11.96%) |
Aug 11, 2026 7w ago | 8-K | $13.87 $13.01 | ▼ −6.20% | ▼ −5.80% | $14.04 (+1.23%) |
Jun 1, 2026 17w ago | 3 | $12.80 $12.87 | ▲ +0.55% | ▲ +3.51% | $14.04 (+9.69%) |
May 12, 2026 20w ago | 8-K | $12.00 $12.17 | ▲ +1.42% | ▲ +1.34% | $14.04 (+17.00%) |
US Market Status
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