Revenue growth remains in contraction territory, with a 0.9% decline in 2026Q2, while gross margins have deteriorated significantly from 30.0% in 2024Q1 to 21.1% in 2026Q2.
| Sales/Revenue | 2.71B | 2.73B | 2.81B | 2.83B | 2.69B | 2.46B |
| Revenue Growth % | -0.84% | -2.53% | -0.69% | 5.15% | 9.38% | - |
| Cost of Goods Sold | 2.04B | 2.01B | 1.99B | 1.97B | 1.91B | 1.77B |
| COGS % of Revenue | - | 73.5% | 70.92% | 69.74% | 71.07% | 71.87% |
| Gross Profit | 671.27M | 724.76M | 815.95M | 855.07M | 777.33M | 690.94M |
| Gross Margin % | 24.78% | 26.5% | 29.08% | 30.26% | 28.93% | 28.13% |
| Gross Profit Growth % | - | -11.18% | -4.58% | 10% | 12.5% | - |
| Operating Expenses | 584.31M | 660.33M | 658M | 637.16M | 585.09M | 594.7M |
| OpEx % of Revenue | - | 24.14% | 23.45% | 22.55% | 21.77% | 24.21% |
| Selling, General & Admin | 479.77M | 517.31M | 517.22M | 500.66M | 450.73M | 461.4M |
| SG&A % of Revenue | - | 18.92% | 18.43% | 17.72% | 16.77% | 18.78% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - |
| Other Operating Expenses | 3M | 143.02M | 140.78M | 136.5M | 134.35M | 133.31M |
| Operating Income | 86.96M | 64.43M | 157.95M | 217.91M | 192.24M | 96.24M |
| Operating Margin % | 3.21% | 2.36% | 5.63% | 7.71% | 7.15% | 3.92% |
| Operating Income Growth % | - | -59.21% | -27.52% | 13.35% | 99.76% | - |
| EBITDA | 226.07M | 207.45M | 298.73M | 354.41M | 326.6M | 229.54M |
| EBITDA Margin % | 8.35% | 7.59% | 10.65% | 12.54% | 12.15% | 9.34% |
| EBITDA Growth % | -2.62% | -30.56% | -15.71% | 8.52% | 42.28% | - |
| D&A (Non-Cash Add-back) | 139.11M | 143.02M | 140.78M | 136.5M | 134.35M | 133.31M |
| EBIT | 76.59M | 47.96M | 158.59M | 271.84M | 194.51M | 96.24M |
| Net Interest Income | -90.09M | -92.26M | -126.56M | -10K | -2.28M | 1.12M |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 1.12M |
| Interest Expense | 90.09M | 92.26M | 126.56M | 10K | 2.28M | 0 |
| Other Income/Expense | -104.66M | -108.74M | -125.92M | 51.82M | -2.28M | 1.12M |
| Pretax Income | -17.7M | -44.31M | 32.03M | 269.73M | 189.96M | 97.36M |
| Pretax Margin % | -0.65% | -1.62% | 1.14% | 9.55% | 7.07% | 3.96% |
| Income Tax | -682K | -4.08M | 11.06M | 56.57M | 48.28M | 23.09M |
| Effective Tax Rate % | 3.85% | 9.22% | 34.53% | 20.97% | 25.42% | 23.72% |
| Net Income | -17.02M | -40.22M | 20.97M | 213.16M | 141.68M | 74.27M |
| Net Margin % | -0.63% | -1.47% | 0.75% | 7.54% | 5.27% | 3.02% |
| Net Income Growth % | 29.84% | -291.81% | -90.16% | 50.45% | 90.76% | - |
| Net Income (Continuing) | -17.02M | -40.22M | 20.97M | 213.16M | 141.68M | 74.27M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | -0.13 | -0.31 | 0.16 | 1.63 | 1.09 | 0.57 |
| EPS Growth % | 29.67% | -293.75% | -90.18% | 49.54% | 91.23% | - |
| EPS (Basic) | - | -0.31 | 0.16 | 1.63 | 1.09 | 0.57 |
| Diluted Shares Outstanding | 133.05M | 131.75M | 131.79M | 130.73M | 129.86M | 131M |
| Basic Shares Outstanding | 132.01M | 131.75M | 131.51M | 130.73M | 129.86M | 131M |
| Dividend Payout Ratio | - | - | 94.67% | 792.33% | 94.93% | 128.71% |
Route density and margin erosion
Based on reported financial data, VSTS has experienced a consistent decline in top-line performance, with revenue contracting by 0.9% in 2026Q2 following a 3.0% drop in the prior quarter, signaling ongoing challenges in maintaining volume within its core uniform rental and facility services segments.
The persistent negative growth suggests that the company is struggling to offset churn with new account acquisition or price increases. Investors should monitor whether this trend reflects broader industrial employment weakness or a specific loss of competitive positioning against more efficient national peers.
As reported in recent income statements, VSTS's gross margin has deteriorated from 30.0% in 2024Q1 to 21.1% in 2026Q2, highlighting significant pressure on the company's ability to effectively manage its industrial laundry cost structure and route-based service delivery expenses in a competitive environment.
This margin compression appears to indicate a lack of operational scale compared to industry leaders, as fixed costs associated with laundry facilities and fleet maintenance remain high. The inability to expand margins suggests that the current service model may be overly sensitive to input cost inflation and labor volatility.
According to the provided quarterly data, VSTS's operating income has failed to scale, fluctuating significantly and reaching a low of -1.3% in 2025Q2, which suggests that the company's standalone corporate overhead is currently disproportionate to its underlying gross profit generation capabilities.
The volatility in operating margins implies that the company has limited flexibility to absorb fluctuations in revenue without impacting bottom-line profitability. This lack of operating leverage warrants further investigation into whether the current SG&A structure is optimized for the company's reduced revenue base.
Based on the provided figures, the company's net income has frequently dipped into negative territory, with a net margin of -1.0% in 2026Q1, raising concerns about the long-term viability of the current business model without a fundamental shift in operational efficiency or pricing power.
Short-sellers may focus on the persistent net losses as evidence that the company's standalone cost structure is fundamentally misaligned with its revenue potential. The reliance on non-recurring items to occasionally reach profitability suggests that core earnings quality remains weak and highly susceptible to further margin erosion.
Quick answers to the most common questions about buying VSTS stock.
For fiscal year 2025, Vestis Corporation (VSTS) reported total revenue of $2.73B. This represents a 11.3% increase compared to $2.46B in 2021.
Vestis Corporation (VSTS) reported a net loss of $40.2M for the fiscal year ending 2025.
Vestis Corporation (VSTS) reported an operating income of $64.4M, resulting in an operating profit margin of 2.4%. This margin reflects the operational efficiency of the business before interest and taxes.
Vestis Corporation (VSTS) generated $724.8M in gross profit for the year, representing a gross profit margin of 26.5%. This demonstrates the company's core pricing power and production efficiency.