Vestis raises FY2026 Free Cash Flow guidance by $30M, reports Q3 revenue of $661.7M

Vestis Corp disclosed its financial results for the fiscal quarter ended July 3, 2026. The full results are contained in a press release furnished as Exhibit 99.1, which is not reproduced in the main 8-K body. Without access to that exhibit, specific revenue, earnings, or guidance figures cannot be quoted or summarized.

Vestis reported third-quarter fiscal 2026 revenue of $661.7 million, down 1.8% year-over-year, with net income of $11.0 million ($0.08 per diluted share) compared to a net loss of $0.7 million in the prior year. Adjusted EBITDA was $80.9 million with a 12.2% margin, up from $64.0 million and 9.5% margin in Q3 2025. Operating cash flow was $64.9 million and Free Cash Flow was $47.0 million.

Vestis achieved a milestone in its transformation, reporting year-over-year Revenue Per Pound growth while holding Cost Per Pound flat — the first time this has occurred since becoming a public company. The company also reported a 3% increase in Revenue Per Pound during the quarter, driven by strategic pricing and improved product mix, despite a 4.5% decline in volume (pounds processed).

Third quarter fiscal 2026 revenue was $661.7 million, a decrease of $12.1 million or 1.8% year-over-year. Total volume (pounds processed) decreased 4.5% compared to the prior year quarter. The revenue decline was driven by intentional shedding of low-profit volume, including linen, while Revenue Per Pound increased 2.9% year-over-year to $1.42, marking the first quarter of year-over-year Revenue Per Pound growth in the company's public history.

Adjusted EBITDA for the third quarter was $80.9 million, representing 12.2% of revenue. This was an increase of $15.0 million or 23% compared to Covenant-Adjusted EBITDA of $65.8 million in the prior year quarter. The improvement resulted from strategic business transformation initiatives that reduced Adjusted Operating Expenses by $27.2 million, offsetting the revenue decline. Sequentially, Adjusted EBITDA increased from $74.5 million (11.3% margin) in the second quarter of fiscal 2026.

Free Cash Flow for the third quarter was $47.0 million, an improvement of $39.0 million year-over-year. Adjusted Free Cash Flow, which excludes $8.6 million of transformation-related cash expenditures, was $55.5 million. Year-to-date Free Cash Flow reached $120.8 million and Adjusted Free Cash Flow totaled $155.1 million. The company reported total available liquidity of $351.8 million, including $57.7 million of cash and cash equivalents on hand as of July 3, 2026.

Adjusted diluted earnings per share for the third quarter was $0.18, compared to $0.07 in the prior year quarter. This represents Adjusted Net Income of $24.2 million on a diluted share count of 134.3 million shares. The improvement reflects higher Adjusted EBITDA and lower interest expense, partially offset by transformation-related costs.

The company updated its full-year fiscal 2026 outlook. Adjusted EBITDA guidance is $310.0 million to $315.0 million (midpoint $312.5 million), implying fourth quarter Adjusted EBITDA of $84.0 million to $89.0 million. Free Cash Flow is expected to be $160.0 million to $170.0 million, reflecting between $60 million and $70 million in annual capital expenditures and between $35 million and $40 million in transformation-related cash expenses.