Vestis (VSTS) Financials

Vestis Corp (NYSE: VSTS) has shown a mixed financial performance over the last four years with notable trends emerging from its latest quarterly reports ending Q3 2025.

Positive Financial Highlights:

• Operating revenues have remained relatively stable around $670 million in Q3 2025 compared to about $690 million in Q3 2024, demonstrating consistent sales performance.
• Gross profit in Q3 2025 was $182 million, showing the company maintains a positive margin between revenue and cost of goods sold.
• Depreciation expenses remain significant but stable, around $34-35 million per quarter, reflecting steady investment in fixed assets.
• Net cash from operating activities in Q3 2025 was positive at $22.9 million, indicating core business operations are generating cash despite the net loss.
• Total assets remained strong at approximately $2.91 billion in Q3 2025 with a healthy base of plant, property & equipment net ($652 million) and goodwill ($963 million), indicating substantial asset backing.
• Total shareholders' equity was stable around $882 million in Q3 2025, suggesting the company’s net asset position is intact despite quarterly losses.

Neutral Financial Observations:

• Vestis maintains significant accounts receivable (~$176 million) and inventories (~$187 million), requiring attentive working capital management.
• Capital expenditures in Q3 2025 totaled $14.86 million, reflecting ongoing reinvestments in property and equipment, which may support future growth.
• The weighted average basic and diluted shares outstanding remained steady around 131.8 million shares, indicating no major dilution events recently.

Negative Financial Concerns:

• Net income has deteriorated sharply, with a loss of approximately $676,000 in Q3 2025 compared to a profit of $5.0 million in Q3 2024, signaling profitability challenges.
• Operating income in Q3 2025 was just $24.9 million, down from $37.5 million in the same quarter last year, reflecting margin compression or increased costs.
• Significant interest and investment expense impacted the bottom line, with a net adverse impact of approximately $25.7 million in other income/expense in Q3 2025.
• Net cash from financing activities was negative $12.7 million in Q3 2025 due to high debt repayments ($56.87 million), exceeding new debt issuances ($53.0 million), suggesting deleveraging but also cash outflows.
• Total liabilities remain elevated at approximately $2.03 billion with long-term debt around $1.16 billion, implying a high leverage level that could pressure financial flexibility.
• Net change in cash and equivalents was negative $5.06 million in Q3 2025, continuing a pattern of cash outflow despite operational cash inflows.
• Retained earnings remain negative (-$34.3 million), indicating accumulated losses over time despite recent positive quarters.
• Selling, general & administrative expenses stayed high at $122 million in Q3 2025, contributing to pressure on profitability.

Overall Analysis:

Vestis has demonstrated consistent revenue and solid asset backing over the past four years. However, profit margins and net income have come under pressure in 2025, with losses in the latest quarters. Significant interest expenses and high debt levels weigh on profitability and cash flows. Nevertheless, the company has maintained positive operating cash flow and continues investing in its asset base. Investors should watch for improvements in profitability and efficient working capital management to support long-term financial health.