Vestis Corp
For the period ended Jun 27, 2025. Filed Aug 5, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 27, 2025 · Filed Aug 5, 2025
VSTS$14.20+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-28; filed 2025-05-07.
0001967649-25-000031
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-27; filed 2025-08-05.
0001967649-25-000046
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 109 previous paragraphs and 102 current paragraphs.
34 unchanged; 46 reworded; 21 added; 29 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
On May 1, 2025, we amended our Credit Agreement. As part of the amendment, among other things, we agreed to restrict all dividends and share repurchases until the earlier of (i) any fiscal quarter ending after October 2, 2026 so long as we are then in compliance with the financial covenants and (ii) when we achieve a net leverage ratio below or equal to 4.5x as of the last day of two consecutive quarters through the end of fiscal 2026.
Current report
Our financial performance and the sustained decrease in our share price during the quarter ended June 27, 2025 created a triggering event causing us to perform a quantitative goodwill impairment test for both reporting units as of June 27, 2025. While no impairment of goodwill was recognized as of the testing date, if our future operating results do not meet current forecasts or if we experience a sustained decline in our market capitalization that is determined to be indicative of a reduction in fair value of one or more of our reporting units within either of our segments, we may be required to record future impairment charges for goodwill.
Current report
Consolidated revenue of $673.8 million decreased $24.4 million, or 3.5%, for the three months ended June 27, 2025 compared to the three months ended June 28, 2024. As reported, the decline in revenue compared to the prior year reflects an $18.6 million decline in uniforms and a $5.8 million decline in workplace supplies. Consolidated revenue for the three months ended June 27, 2025 was negatively impacted by $0.8 million related to the effects of fluctuations in foreign exchange rates on currency. In addition to the effects of fluctuations in foreign exchange rates on currency, rental revenue declined $18.0 million while direct sales declined $5.6 million. The $18.0 million decline in rental revenue was primarily due to a $14.6 million decline from lost business in excess of new business and a $3.4 million decline in revenue related to existing customers. The decline in direct sales revenue of $5.6 million was primarily attributable to a $4.3 million unfavorable impact from the previously anticipated loss of a national account customer. Excluding that, direct sales decreased $1.3 million when compared to the prior year.
Current report
Cost of services provided decreased $4.1 million, or 0.8%, for the three months ended June 27, 2025 compared to the three months ended June 28, 2024. The decrease was primarily driven by a of $7.1 million reduction in delivery costs, and a $4.3 million decline in direct sales merchandise costs on lower direct sales revenue. These decreases were partially offset by a $4.9 million increase in rental merchandise amortization, and a $2.5 million increase in plant operating costs.
Current report
Depreciation and amortization expense of $34.9 million for the three months ended June 27, 2025 decreased $0.1 million, or 0.2%, compared to the three months ended June 28, 2024.
Current report
Results of Operations Nine Months Ended June 27, 2025 compared with June 28, 2024
Current report
Consolidated revenue of $2,022.8 million decreased $98.7 million, or 4.7%, for the nine months ended June 27, 2025 compared to the nine months ended June 28, 2024. As reported, the decline in revenue compared to the prior year reflects an $82.0 million decline in uniforms and a $16.7 million decline in workplace supplies. Consolidated revenue for the nine months ended June 27, 2025 was negatively impacted by $6.2 million related to the effects of fluctuations in foreign exchange rates on currency. In addition to the impact of effects of fluctuations in foreign exchange rates on currency, rental revenue declined $71.3 million and direct sales declined $21.2 million. The $71.3 million decline in rental revenue was primarily due to a $52.8 million decline from lost business in excess of new business and an $18.5 million decline in revenue related to existing customers. The decline in direct sales revenue of $21.2 million was primarily attributable to a $15.5 million unfavorable impact from the previously anticipated loss of a national account customer.
Current report
Cost of services provided decreased $25.6 million, or 1.7%, for the nine months ended June 27, 2025 compared to the nine months ended June 28, 2024. The decrease was primarily driven by a $16.0 million reduction in delivery costs, and a $15.3 million decline in direct sales merchandise costs on lower direct sales revenue. These decreases were partially offset by a $6.9 million increase in rental merchandise amortization.
Current report
United States revenue of $613.3 million decreased $23.5 million, or 3.7%, for thethree months ended June 27, 2025 compared to thethree months ended June 28, 2024. The decline in revenue compared to the prior year reflects a $17.7 million decline in uniforms and a $5.8 million decline in workplace supplies which corresponds to a $17.8 million decline in rental revenue and a $5.7 million decline in direct sales. The $17.8 million decline in rental revenue is primarily due to a $14 million decline from lost business in excess of new business and a $3.8 million decline in revenue related to existing customers. The decline in direct sales revenue of $5.7 million was primarily attributable to a $4.3 million unfavorable impact from the previously anticipated loss of a national account customer. Excluding that, direct sales decreased $1.4 million when compared to the prior year.
Current report
Segment operating income of $40.7 million for the three months ended June 27, 2025 decreased $23.8 million, or 36.9%, compared to the three months ended June 28, 2024, primarily driven bythe decrease in revenue during the three months ended June 27, 2025, as described above.
Current report
Segment operating income margin decreased approximately 350 basis points from 10.1% for the three months ended June 28, 2024 to approximately 6.6% for the three months ended June 27, 2025.
Current report
United States revenue of$1,841.1 million decreased$91.0 million, or 4.7%, for the nine months ended June 27, 2025 compared to the nine months ended June 28, 2024. The decline in revenue compared to the prior year reflects an $75.8 million decline in uniforms and a $15.2 million decline in workplace supplies which corresponds to an $71.1 million decline in rental revenue and a $19.9 million decline in direct sales revenue. The $71.1 million decline in rental revenue was primarily due to a $49.5 million decline from lost business in excess of new business and a $21.6 million decline in revenue related to existing customers. The decline in direct sales revenue of $19.9 million was primarily attributable to a $15.5 million unfavorable impact from the previously anticipated loss of a national account customer.
Current report
Segment operating income of $117.3 million for the nine months ended June 27, 2025 decreased $92.5 million, or 44.1%, compared to the nine months ended June 28, 2024, primarily driven bythe decrease in revenue during the nine months ended June 27, 2025, as described above.
Current report
Segment operating income margin decreased approximately 450 basis points from 10.9% for the nine months ended June 28, 2024 to approximately 6.4% for the nine months ended June 27, 2025.
Current report
Canada revenue of $60.5 million decreased $0.9 million, or 1.5%, for thethree months ended June 27, 2025 compared to thethree months ended June 28, 2024. As reported, the decline in revenue compared to the prior year reflects a $0.8 million decline in uniforms and a $0.1 million decline in workplace supplies. Canada revenue for the three months ended June 27, 2025 was negatively impacted by $0.8 million related to the effects of fluctuations in foreign exchange rates on currency. Excluding the effects of fluctuations in foreign exchange rates on currency, rental revenue decline by $0.2 million offset by a $0.1 million increase in direct sales.
Current report
Segment operating income of $2.5 million for the three months ended June 27, 2025 increased $1.2 million, or 94.7%, compared to the three months ended June 28, 2024.
Current report
Canada revenue of$181.7 million decreased$7.7 million, or 4.0%, for the nine months ended June 27, 2025 compared to the nine months ended June 28, 2024. As reported, the decline in revenue compared to the prior year reflects a $6.2 million decline in uniforms and a $1.5 million decline in workplace supplies. The nine months ended June 27, 2025 was negatively impacted by $6.2 million related to the effects of fluctuations in foreign exchange rates on currency. In addition to the effects of fluctuations in foreign exchange rates on currency, rental revenue declined $0.1 million and direct sales declined $1.4 million.
Current report
Segment operating income of $6.5 million for the nine months ended June 27, 2025 decreased $0.3 million, or 4.6%, compared to the nine months ended June 28, 2024.
Current report
Segment operating income margin was 3.6% for both the nine months ended June 27, 2025 and the nine months ended June 28, 2024.
Current report
•dividend payments of$9.2 million; and
Current report
Recent Amendment to Credit Agreement
Removed paragraphs (29)
Previous report
Consolidated revenue of $665.2 million decreased $40.1 million, or 5.7%, for the three months ended March 28, 2025 compared to the three months ended March 29, 2024. Revenue declined by $17.5 million due to lost business in excess of new business during the period, in addition to approximately $5.8 million in lower revenue related to existing customers, $6.8 million lower revenue from direct sales, primarily related to the loss of a national account customer, $5.0 million in lower customer exit billings that did not recur, and $5.0 million in lower revenue related to other revenue categories.
Previous report
Cost of services provided decreased $14.4 million, or 2.9%, for the three months ended March 28, 2025 compared to the three months ended March 29, 2024 primarily due to decreases in wages and payroll costs of $8.2 million and merchandise cost of $5.0 million.
Previous report
Depreciation and amortization expense of $35.9 million for the three months ended March 28, 2025 increased $0.7 million, or 1.9%, compared to the three months ended March 29, 2024.
Previous report
Selling, general and administrative expenses ("SG&A") increased $25.3 million, or 20.6%, for the three months ended March 28, 2025 compared to the three months ended March 29, 2024. The increase in SG&A was primarily due to an increase of $17.4 million in the Company's bad debt expense, which includes an adjustment to the Company's allowance for credit losses in the amount of $15.0 million based on updated estimates of collectability, an increase in severance charges of $8.1 million primarily related to the departure of certain former executives, increased share based compensation of $3.2 million primarily related to the acceleration of expense due to certain executive departures, and increased general and administrative wage and payroll costs of $2.2 million.
Previous report
Results of Operations Six Months Ended March 28, 2025 compared with March 29, 2024
Previous report
Consolidated revenue of $1,349.0 million decreased $74.3 million, or 5.2%, for the six months ended March 28, 2025 compared to the six months ended March 29, 2024. Revenue declined by $36.1 million due to lost business in excess of new business during the period, in addition to approximately $22.6 million in lower revenue related to existing customers, including one-time exit billings, net of new pricing during the period, and $15.6 million lower revenue from direct sales.
Previous report
Cost of services provided decreased $21.5 million, or 2.1%, for the six months ended March 28, 2025 compared to the six months ended March 29, 2024 primarily due to decreases in wages and payroll costs of $11.6 million and merchandise costs of $8.9 million.
Previous report
United States revenue of $606.1 million decreased $36.0 million, or 5.6%, for thethree months ended March 28, 2025 compared to thethree months ended March 29, 2024. Revenue declined by $15.9 million due to lost business in excess of new business during the period, in addition to approximately $13.7 million in lower revenue related to existing customers, including one-time exit billings, net of new pricing during the period, and $6.4 million lower revenue from direct sales.
Previous report
Segment operating income of $18.6 million for the three months ended March 28, 2025 decreased $52.6 million, or 73.9%, compared to the three months ended March 29, 2024, primarily driven by:
Previous report
•an increase of$17.4 million in the Company's bad debt expense, which includes an adjustment to the Company's allowance for credit losses in the amount of $15.0 million based on updated estimates of collectability; and
Previous report
•an increase in wage and payroll costs of$4.5 million; partially offset by
Previous report
•a decrease in merchandise costs of$4.1 million.
Previous report
Segment operating income margin decreased approximately 800 basis points from 11.1% for the three months ended March 29, 2024 to approximately 3.1% for the three months ended March 28, 2025.
Previous report
United States revenue of$1,227.8 million decreased$67.5 million, or 5.2%, for the six months ended March 28, 2025 compared to the six months ended March 29, 2024. Revenue declined by $33.2 million due to lost business in excess of new business during the period, in addition to approximately $20.2 million in lower revenue related to existing customers, including one-time exit billings, net of new pricing during the period, and $14.1 million lower revenue from direct sales.
Previous report
Segment operating income of $76.6 million for the six months ended March 28, 2025 decreased $68.7 million, or 47.3%, compared to the six months ended March 29, 2024, primarily driven by:
Previous report
•the decrease in revenue during the six months ended March 28, 2025, as described above; and
Previous report
•an increase of$19.2 million in the Company's bad debt expense, which includes an adjustment to the Company's allowance for credit losses in the amount of $15.0 million based on updated estimates of collectability; partially offset by
Previous report
•lower merchandise costs of$6.8 million;
Previous report
•a decrease in wage and payroll costs of$6.6 million; and
Previous report
•a decrease in energy costs of$4.4 million.
Previous report
Segment operating income margin decreased approximately 500 basis points from 11.2% for the six months ended March 29, 2024 to approximately 6.2% for the six months ended March 28, 2025.
Previous report
Canada revenue of $59.2 million decreased $4.1 million, or 6.5%, for thethree months ended March 28, 2025 compared to thethree months ended March 29, 2024. Revenue declined by $1.5 million due to lost business in excess of new business during the period, in addition to approximately $2.2 million in lower revenue related to existing customers, including one-time exit billings, net of new pricing during the period, and $0.4 million lower revenue from direct sales.
Previous report
Segment operating income of $2.1 million for the three months ended March 28, 2025 increased $1.1 million, or 113.1%, compared to the three months ended March 29, 2024.
Previous report
Canada revenue of$121.2 million decreased$6.8 million, or 5.3%, for the six months ended March 28, 2025 compared to the six months ended March 29, 2024. Revenue declined by $2.8 million due to lost business in excess of new business during the period, in addition to approximately$2.6 million in lower revenue related to existing customers, including one-time exit billings, net of new pricing during the period, and$1.4 million lower revenue from direct sales.
Previous report
Segment operating income of $4.0 million for the six months ended March 28, 2025 decreased $1.5 million, or 27.8%, compared to the six months ended March 29, 2024, primarily driven by the decrease in revenue during the six months ended March 28, 2025, as described above.
Previous report
Segment operating income margin decreased approximately 100 basis points from 4.3% for the six months ended March 29, 2024, to approximately 3.3% for the six months ended March 28, 2025.
Previous report
Cash Flows Used in Financing Activities
Previous report
•dividend payments of$4.6 million; and
Previous report
Amendment to Credit Agreement
Reworded paragraphs (46)
Previous wording
The following discussion and analysis of Vestis Corporation’s (“Vestis”, the “Company”, “our”, “we” or “us”) financial condition and results of operations for the three and six months ended March 28, 2025 and March 29, 2024 should be read in conjunction with our audited Consolidated and Combined Financial Statements and the notes to those statements for the fiscal year ended September 27, 2024 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission ("SEC") on November 22, 2024.
Current wording
The following discussion and analysis of Vestis Corporation’s (“Vestis”, the “Company”, “our”, “we” or “us”) financial condition and results of operations for the three and nine months ended June 27, 2025 and June 28, 2024 should be read in conjunction with our audited Consolidated and Combined Financial Statements and the notes to those statements for the fiscal year ended September 27, 2024 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission ("SEC") on November 22, 2024.
Previous wording
All amounts discussed are in thousands of U.S. dollars, unless where otherwise indicated.
Current wording
All amounts discussed are in thousands of U.S. dollars, unless otherwise indicated.
Previous wording
Our fiscal year is the 52- or 53-week period which ends on the Friday nearest to September 30th. The fiscal year ended September 27, 2024 is 52-week period and the fiscal year ended October 3, 2025 is 53-week period.
Current wording
Our fiscal year is the 52- or 53-week period which ends on the Friday nearest to September 30th. The fiscal year ended September 27, 2024 is a 52-week period and the fiscal year ending October 3, 2025 is a 53-week period.
Previous wording
The following table presents an overview of our results with the amount of and percentage change between periods for the three months ended March 28, 2025 and March 29, 2024 (dollars in thousands).
Current wording
The following table presents an overview of our results along with the amount of and percentage change between periods for the three months ended June 27, 2025 and June 28, 2024 (dollars in thousands).
Previous wording
•the decrease in revenue during the three months ended March 28, 2025, as described above;
Current wording
Selling, general and administrative expenses ("SG&A") decreased $7.7 million, or 6.0%, for the three months ended June 27, 2025 compared to the three months ended June 28, 2024. The decrease in SG&A was primarily due to a decrease in share-based compensation of $6.0 million, a decrease in separation-related charges of $3.6 million and a $2.6 million reduction in other administrative costs, offset by an increase in selling costs of $4.5 million.
Previous wording
Operating income (loss) of $(8.6) million decreased from $43.1 million, or 119.9%, for the three months ended March 28, 2025 compared to the three months ended March 29, 2024 from the impact of changes in revenue and costs noted above.
Current wording
Operating income of $25.0 million decreased from $37.5 million, or 33.5%, for the three months ended June 27, 2025 compared to the three months ended June 28, 2024 from the impact of changes in revenue and costs noted above.
Previous wording
Interest expense, net, decreased $21.4 million for the six months ended March 28, 2025 compared to the six months ended March 29, 2024 primarily due to lower average outstanding debt during the six months ended March 28, 2025 as compared to the six months ended March 29, 2024.
Current wording
Interest expense, net, decreased $7.4 million for the three months ended June 27, 2025 compared to the three months ended June 28, 2024 primarily due to lower average outstanding debt as a result of entering into the A/R Facility on August 2, 2024.
Previous wording
Other Expense (Income) increased $10.4 million for the six months ended March 28, 2025 compared to the six months ended March 29, 2024 primarily due to a loss on sale of accounts receivable for the A/R Facility of $6.6 million, as these costs were not incurred during the three months ended March 29, 2024. Other Expense (Income) was negatively impacted by a $1.4 million decrease in income from an equity method investment due to its sale in the first quarter of fiscal year 2025.
Current wording
Other expense, net of other income, increased $3.7 million for the three months ended June 27, 2025 compared to the three months ended June 28, 2024 primarily due to a loss on sale of accounts receivable for the A/R Facility of $3.2 million, as these costs were not incurred during the three months ended June 28, 2024.
Previous wording
The provision for income taxes for the three months ended March 28, 2025 was recorded at an effective rate of 18.6% compared to an effective rate of 28.5% for the three months ended March 29, 2024. The Company’s effective rate for the three months ended March 28, 2025 differed from the U.S. statutory rate primarily due to our consolidated pre-tax book loss relative to the impacts of state taxes, permanent book/tax differences consisting mainly of nondeductible executive compensation and meals and entertainment, and our international operations in jurisdictions with higher income tax rates. The Company’s effective rate for the three months ended March 29, 2024 differed from the U.S. statutory rate primarily due to our consolidated pre-tax book income relative to the impacts of state taxes, permanent book/tax differences consisting mainly of nondeductible executive compensation and meals and entertainment, and our international operations in jurisdictions with higher income tax rates.
Current wording
The provision for income taxes for the three months ended June 27, 2025 was recorded at an effective rate of 9.7% compared to an effective rate of 38.1% for the three months ended June 28, 2024. The Company’s effective rate for the three months ended June 27, 2025 differed from the U.S. statutory rate primarily due to our consolidated pre-tax book loss relative to the impacts of state taxes, permanent book/tax differences consisting mainly of nondeductible executive compensation and meals and entertainment, federal tax credits, and our international operations in jurisdictions with higher income tax rates. The Company’s effective rate for the three months ended June 28, 2024 differed from the U.S. statutory rate primarily due to our consolidated pre-tax book income relative to the impacts of state taxes, permanent book/tax differences consisting mainly of nondeductible executive compensation and meals and entertainment, and our international operations in jurisdictions with higher income tax rates.
Previous wording
Net loss of $27.8 million for the three months ended March 28, 2025 represented a decrease of $33.8 million, or 566.6%, compared to net income of $6.0 million for the three months ended March 29, 2024, due to the impact of changes to revenue and expenses noted above.
Current wording
Net loss of $0.7 million for the three months ended June 27, 2025 represented a decrease of $5.7 million, or 113.4%, compared to net income of $5.0 million for the three months ended June 28, 2024, due to the impact of changes to revenue and expenses noted above.
Previous wording
The following table presents an overview of our results with the amount of and percentage change between periods for the six months ended March 28, 2025 and March 29, 2024 (dollars in thousands).
Current wording
The following table presents an overview of our results along with the amount of and percentage change between periods for the nine months ended June 27, 2025 and June 28, 2024 (dollars in thousands).
Previous wording
Depreciation and amortization expense of $72.8 million for the six months ended March 28, 2025 increased $2.2 million, or 3.2%, compared to the six months ended March 29, 2024.
Current wording
Depreciation and amortization expense of $107.7 million for the nine months ended June 27, 2025 increased $2.2 million, or 2.1%, compared to the nine months ended June 28, 2024.
Previous wording
Selling, general and administrative expenses ("SG&A") increased $13.9 million, or 5.4%, for the six months ended March 28, 2025 compared to the six months ended March 29, 2024. The increase in SG&A was primarily due to an increase of $19.2 million in the Company's bad debt expense, which includes an adjustment to the Company's allowance for credit losses in the amount of $15.0 million based on updated estimates of collectability, an increase in severance charges of $11.9 million primarily related to the departure of certain former executives, and increased share based compensation of $3.7 million related to the acceleration of expense due to certain executive departures. These impacts were partially offset by a decrease in selling, general and administrative wage and payroll costs of $11.2 million, a decrease of $3.8 million in equipment expense, a decrease in professional service costs of $1.5 million, and a decrease in general liability insurance expense of $1.7 million.
Current wording
Selling, general and administrative expenses ("SG&A") increased $6.1 million, or 1.6%, for the nine months ended June 27, 2025 compared to the nine months ended June 28, 2024. The increase in SG&A was primarily due to an increase of $19.5 million in the Company's bad debt expense, which includes an adjustment to the Company's allowance for credit losses in the amount of $15.0 million based on updated estimates of collectability and an increase in severance charges of $11.4 million primarily related to the departure of certain former executives. These impacts were partially offset by a decrease in general and administrative wages of $8.4 million, a decrease of $8.4 million in separation-related charges, a decrease in professional service costs of $3.9 million and a decrease in share-based compensation of $2.3 million.
Previous wording
Operating income of $21.8 million decreased 75.9% for the six months ended March 28, 2025 compared to the six months ended March 29, 2024 from the impact of changes in revenue and costs noted above.
Current wording
Operating income of $46.8 million decreased 63.5% for the nine months ended June 27, 2025 compared to the nine months ended June 28, 2024 from the impact of changes in revenue and costs noted above.
Previous wording
Interest expense, net, decreased $13.0 million for the three months ended March 28, 2025 compared to the three months ended March 29, 2024 primarily due to lower average outstanding debt during the three months ended March 28, 2025 as compared to the three months ended March 29, 2024.
Current wording
Interest expense, net, decreased $28.8 million for the nine months ended June 27, 2025 compared to the nine months ended June 28, 2024 primarily due to lower average outstanding debt during the nine months ended June 27, 2025 as compared to the nine months ended June 28, 2024.
Previous wording
Other Expense (Income) increased $3.9 million for the three months ended March 28, 2025 compared to the three months ended March 29, 2024 primarily due to a loss on sale of accounts receivable for the A/R Facility of $3.2 million, as these costs were not incurred during the three months ended March 29, 2024. Other Expense (Income) was negatively impacted by a $0.6 million decrease in income from an equity method investment due to its sale in the first quarter of fiscal year 2025.
Current wording
Other expense, net of other income, increased $14.1 million for the nine months ended June 27, 2025 compared to the nine months ended June 28, 2024 primarily due to a loss on sale of accounts receivable for the A/R Facility of $9.7 million, as these costs were not incurred during the nine months ended June 28, 2024. Other expense, net of other income, was also negatively impacted by a $2.2 million loss on sale of an equity investment and by a $2.0 million decrease in income from the equity method investment, both of which were due to the sale of the equity investment in the first quarter of fiscal year 2025.
Previous wording
The provision for income taxes for the six months ended March 28, 2025 was recorded at an effective rate of 17.3% compared to an effective rate of 27.5% for the six months ended March 29, 2024. The Company’s effective rate for the six months ended March 28, 2025 differed from the U.S. statutory rate primarily due to our consolidated pre-tax book loss relative to the impacts of state taxes, permanent book/tax differences consisting mainly of nondeductible executive compensation and meals and entertainment, and our international operations in jurisdictions with higher income tax rates. The Company’s effective rate for the six months ended March 29, 2024 differed from the U.S. statutory rate primarily due to our consolidated pre-tax book income relative to the impacts of state taxes, permanent book/tax differences consisting mainly of nondeductible executive compensation and meals and entertainment, and our international operations in jurisdictions with higher income tax rates.
Current wording
The provision for income taxes for the nine months ended June 27, 2025 was recorded at an effective rate of 17.1% compared to an effective rate of 30.1% for the nine months ended June 28, 2024. The Company’s effective rate for the nine months ended June 27, 2025 differed from the U.S. statutory rate primarily due to our consolidated pre-tax book loss relative to the impacts of state taxes, permanent book/tax differences consisting mainly of nondeductible executive compensation and meals and entertainment, federal tax credits, and our international operations in jurisdictions with higher income tax rates. The Company’s effective rate for the nine months ended June 28, 2024 differed from the U.S. statutory rate primarily due to our consolidated pre-tax book income relative to the impacts of state taxes, permanent book/tax differences consisting mainly of nondeductible executive compensation and meals and entertainment, and our international operations in jurisdictions with higher income tax rates.
Previous wording
Net loss of $27.0 million for the six months ended March 28, 2025 represented a decrease of $45.2 million, or 248.1%, compared to net income of $18.2 million for the six months ended March 29, 2024 due to the impact of changes to revenue and expenses noted above.
Current wording
Net loss of $27.7 million for the nine months ended June 27, 2025 represented a decrease of $50.9 million, or 218.9%, compared to net income of $23.3 million for the nine months ended June 28, 2024 due to the impact of changes to revenue and expenses noted above.
Previous wording
The following table presents an overview of our United States reportable segment results with the amount of and percentage change between periods for thethree months ended March 28, 2025 and March 29, 2024 (dollars in thousands).
Current wording
The following table presents an overview of our United States reportable segment results along with the amount of and percentage change between periods for thethree months ended June 27, 2025 and June 28, 2024 (dollars in thousands).
Previous wording
Results of Operations—United States Results Six Months Ended March 28, 2025 compared with March 29, 2024
Current wording
Results of Operations—United States Results Nine Months Ended June 27, 2025 compared with June 28, 2024
Previous wording
The following table presents an overview of our United States reportable segment results with the amount of and percentage change between periods for thesix months ended March 28, 2025 and March 29, 2024 (dollars in thousands).
Current wording
The following table presents an overview of our United States reportable segment results along with the amount of and percentage change between periods for thenine months ended June 27, 2025 and June 28, 2024 (dollars in thousands).
Previous wording
The following table presents an overview of our Canada reportable segment results with the amount of and percentage change between periods for thethree months ended March 28, 2025 and March 29, 2024 (dollars in thousands).
Current wording
The following table presents an overview of our Canada reportable segment results along with the amount of and percentage change between periods for thethree months ended June 27, 2025 and June 28, 2024 (dollars in thousands).
Previous wording
Segment operating income margin increased approximately 200 basis points from 1.5% for the three months ended March 29, 2024, to approximately 3.5% for the three months ended March 28, 2025.
Current wording
Segment operating income margin increased approximately 210 basis points from 2.1% for the three months ended June 28, 2024, to approximately 4.2% for the three months ended June 27, 2025.
Previous wording
Results of Operations—Canada Results Six Months Ended March 28, 2025 compared with March 29, 2024
Current wording
Results of Operations—Canada Results Nine Months Ended June 27, 2025 compared with June 28, 2024
Previous wording
The following table presents an overview of our Canada reportable segment results with the amount of and percentage change between periods for thesix months ended March 28, 2025 and March 29, 2024 (dollars in thousands).
Current wording
The following table presents an overview of our Canada reportable segment results along with the amount of and percentage change between periods for thenine months ended June 27, 2025 and June 28, 2024 (dollars in thousands).
Previous wording
Subsequent to the end of the second quarter of fiscal 2025, on May 1, 2025, the Company amended its Credit Agreement. As part of the amendment the Company agreed to restrict all dividends and share repurchases until the earlier of (i) any fiscal quarter ending after October 2, 2026 so long as the Company is then in compliance with the financial covenants and (ii) when the Company achieves a net leverage ratio below or equal to 4.50x as of the last day of two consecutive quarters through the end of fiscal 2026.
Current wording
On May 1, 2025, the Company amended its Credit Agreement. As part of the amendment, the Company agreed to restrict all dividends and share repurchases until the earlier of (i) any fiscal quarter ending after October 2, 2026 so long as the Company is then in compliance with the financial covenants and (ii) when the Company achieves a net leverage ratio below or equal to 4.50x as of the last day of two consecutive quarters through the end of fiscal 2026.
Previous wording
On August 2, 2024, Vestis Services, LLC (“Vestis Services”) and certain other subsidiaries of the Company entered into a three-year$250.0 million accounts receivable securitization facility (the “A/R Facility”). Under the A/R Facility, Vestis Services and certain other wholly-owned subsidiaries of the Company transfer accounts receivable and certain related assets to VS Financing, LLC, a bankruptcy remote special purpose entity formed as a wholly-owned subsidiary of Vestis Services ("SPE"), who in turn, may sell the receivables to one or more financial institutions ("Purchasers"). The net proceeds of the A/R Facility were used to repay a portion of the outstanding borrowings under the existing term loans. The A/R Facility is scheduled to terminate on August 2, 2027, unless terminated earlier pursuant to its terms. As of March 28, 2025 and September 27, 2024, the total value of accounts receivable sold from the SPE to the Purchasers under the A/R Facility and derecognized from the Company's Consolidated Balance Sheet was$222.0 million and $229.0 million, respectively.
Current wording
On August 2, 2024, Vestis Services, LLC (“Vestis Services”) and certain other subsidiaries of the Company entered into a three-year$250.0 million accounts receivable securitization facility (the “A/R Facility”). Under the A/R Facility, Vestis Services and certain other wholly-owned subsidiaries of the Company transfer accounts receivable and certain related assets to VS Financing, LLC, a bankruptcy remote special purpose entity formed as a wholly-owned subsidiary of Vestis Services ("SPE"), who in turn, may sell the receivables to one or more financial institutions ("Purchasers"). The net proceeds of the A/R Facility were used to repay a portion of the outstanding borrowings under the existing term loans. The A/R Facility is scheduled to terminate on August 2, 2027, unless terminated earlier pursuant to its terms. As of June 27, 2025 and September 27, 2024, the total value of accounts receivable sold from the SPE to the Purchasers under the A/R Facility and derecognized from the Company's Consolidated Balance Sheet was$211.9 million and $229.0 million, respectively.
Previous wording
As of March 28, 2025, we had approximately $28.8 million of cash and cash equivalents and$264.3 million of availability for borrowing under our Revolving Credit Facility. As of March 28, 2025, we had $1,172.5 million of total principal debt compared to $1,162.5 million as of September 27, 2024. The servicing of this debt will be supported by cash flows from our operations.
Current wording
As of June 27, 2025, we had approximately $23.7 million of cash and cash equivalents and$266.3 million of availability for borrowing under our Revolving Credit Facility. As of June 27, 2025, we had $1,170.5 million of total principal debt compared to $1,162.5 million as of September 27, 2024. The servicing of this debt will be supported by cash flows from our operations.
Previous wording
Net cash provided by operating activities was $10.4 million for the six months ended March 28, 2025 and $127.5 million for the six months ended March 29, 2024, respectively. The decrease in net cash provided by operating activities of $117.1 million was driven by the net loss for the six months ended March 28, 2025 of $27.0 million compared to net income for the six months ended March 29, 2024 of $18.2 million, as discussed in "Results of Operations" above.
Current wording
Net cash provided by operating activities was $33.3 million for the nine months ended June 27, 2025 and $176.2 million for the nine months ended June 28, 2024. The decrease in net cash provided by operating activities of $142.9 million was due in part to the net loss for the nine months ended June 27, 2025 of $27.7 million compared to net income for the nine months ended June 28, 2024 of $23.3 million, as discussed in "Results of Operations" above.
Previous wording
Additionally, the change in cash used in operating assets and liabilities of $73.9 million, when comparing the six months ended March 28, 2025 to the six months ended March 29, 2024, was primarily due to investments in inventory during the six months ended March 28, 2025 to support new customers and more effectively serve existing customers. Also, approximately$6.0 million of the increase in cash used for inventory is related to tariff pre-buy.
Current wording
Additionally, the decrease in net cash provided by operating activities was also impacted by the change in operating assets and liabilities of $83.3 million, when comparing the nine months ended June 27, 2025 to the nine months ended June 28, 2024, which was, in part, due to investments in inventory during the nine months ended June 27, 2025 to support new customers and more effectively serve existing customers. Also, approximately$6.0 million of the increase in cash used for inventory is related to tariff pre-buy. Changes in accounts payable and accrued expenses reflect reduced operational spending, due in part to the decrease in revenue and certain cost reduction initiatives. Changes in accounts receivable reflect improved collections.
Previous wording
Net cash provided by (used in) investing activities of $9.2 million for the six months ended March 28, 2025 was $39.0 million higher relative to the six months ended March 29, 2024 primarily due to $36.8 million of net proceeds from the sale of our equity investment, proceeds from the disposal of property and equipment of $5.2 million and $1.6 million lower year-over-year purchases of property and equipment. This activity was partially offset by cash outflow of $4.6 million associated with a tuck-in acquisition completed during the first quarter of fiscal 2025.
Current wording
Net cash used in investing activities of $5.5 million for the nine months ended June 27, 2025 was $45.3 million lower relative to the nine months ended June 28, 2024 primarily due to $36.8 million of net proceeds from the sale of an equity investment, proceeds from the disposal of property and equipment of $5.4 million, and $7.7 million lower year-over-year purchases of property and equipment. This activity was partially offset by cash outflow of $4.6 million associated with a tuck-in acquisition completed during the first quarter of fiscal 2025.
Previous wording
Cash Flows Provided by Operating Activities
Current wording
Cash Flows Provided by (Used in) Financing Activities
Previous wording
During the six months ended March 28, 2025, cash used in financing activities was impacted by the following:
Current wording
During the nine months ended June 27, 2025, cash used in financing activities was primarily impacted by the following:
Previous wording
•proceeds from long-term borrowings, net of repayments, of $10.0 million;
Current wording
•proceeds from long-term borrowings, net of repayments, of $8.0 million;
Previous wording
•payments related to finance leases of $16.8 million; and
Current wording
•payments related to finance leases of $25.6 million; and
Previous wording
During the six months ended March 29, 2024, cash used in financing activities was impacted by the following:
Current wording
During the nine months ended June 28, 2024, cash used in financing activities was primarily impacted by the following:
Previous wording
•payments for long-term borrowings, net of proceeds, of $64.5 million;
Current wording
•payments for long-term borrowings, net of proceeds, of $81.5 million;
Previous wording
•payments related to finance leases of $15.1 million;
Current wording
•payments related to finance leases of $22.6 million;
Previous wording
In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future. There have not been material changes to our cash requirements from our Annual Report on Form 10-K for the fiscal year ended September 27, 2024 filed with the SEC on November 22, 2024. Additional information regarding our obligations under debt and lease arrangements are provided in Note 4. "Borrowings" and Note 7. "Leases" to the Consolidated Financial Statements contained elsewhere in this Quarterly Report on Form 10-Q.
Current wording
In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future. There have not been material changes to our cash requirements since our Annual Report on Form 10-K for the fiscal year ended September 27, 2024 filed with the SEC on November 22, 2024. Additional information regarding our obligations under debt and lease arrangements are provided in Note 4. "Borrowings" and Note 7. "Leases" to the Consolidated Financial Statements contained elsewhere in this Quarterly Report on Form 10-Q.
Previous wording
The Credit Agreement (prior to Amendment No. 2 described below, which was entered into subsequent to the end of the second quarter of fiscal 2025) requires us to maintain a maximum Consolidated Total Net Leverage Ratio, defined as consolidated total indebtedness in excess of unrestricted cash divided by Covenant Adjusted EBITDA, not to exceed 5.25x for any fiscal quarter ending prior to March 31, 2025, and not to exceed 4.50x for any fiscal quarter ending on or after March 31, 2025, subject to certain exceptions. Consolidated total indebtedness is defined in the Credit Agreement as total indebtedness consisting of debt for borrowed money, finance leases, disqualified and preferred stock and advances under any receivables facility. Covenant Adjusted EBITDA is defined in the Credit Agreement as consolidated net income increased by interest expense, taxes, depreciation and amortization expense, initial public company costs, restructuring charges, write-offs and noncash charges, non-controlling interest expense, net cost savings in connection with any acquisition, disposition, or other permitted investment under the Credit Agreement, share-based compensation expense, non-recurring or unusual gains and losses, reimbursable insurance costs, cash expenses related to earn outs, and insured losses.
Current wording
Prior to our May 1, 2025 amendment, which is described below, our Credit Agreement required us to maintain a maximum Consolidated Total Net Leverage Ratio, defined as consolidated total indebtedness in excess of unrestricted cash divided by Adjusted EBITDA (as defined in the Credit Agreement), not to exceed 5.25x for any fiscal quarter ending prior to March 31, 2025, and not to exceed 4.50x for any fiscal quarter ending on or after March 31, 2025, subject to certain exceptions. Consolidated total indebtedness is defined in the Credit Agreement as total indebtedness consisting of debt for borrowed money, finance leases, disqualified and preferred stock and advances under any receivables facility. Adjusted EBITDA is defined in the Credit Agreement as consolidated net income increased by interest expense, taxes, depreciation and amortization expense, initial public company costs, restructuring charges, write-offs and noncash charges, non-controlling interest expense, net cost savings in connection with any acquisition, disposition, or other permitted investment under the Credit Agreement, share-based compensation expense, non-recurring or unusual gains and losses, reimbursable insurance costs, cash expenses related to earn outs, and insured losses.
Showing the first 40 of 46 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Cash Flows Provided by (Used in) Operating Activities