Vestis Corporation Soars into Fiscal 2025 with Strong Fourth Quarter Earnings and Bright Prospects Ahead
The Vestis Corporation has closed out its first year as a stand-alone public company on a high note, delivering solid fourth quarter financial results that exceeded expectations. In a recent conference call, CEO Kim Scott highlighted the company's strong commercial momentum, operational efficiencies, and customer experience enhancements.
For the fiscal fourth quarter of 2024, Vestis reported revenue of $684 million, in line with guidance, and adjusted EBITDA of $81 million, beating expectations. This performance was a culmination of the company's efforts to drive growth through national account wins, success with small to medium enterprise customers, and achievements in route sales.
"We are building commercial momentum," Scott said during the call. "We continue to drive efficiencies across our operations, and we remain highly focused on elevating our customers' experience." The CEO expressed excitement about the opportunities ahead, citing the company's commitment to achieving best-in-class performance related to retention, sales, and margins.
One of the notable highlights from the quarter was Vestis's success in securing large multiyear deals with leading national food services companies. Scott highlighted a recent win with a major player in the industry, spanning multiple product categories across both uniforms and workplace supplies. This deal has the potential to become one of the company's largest customers over the next several years.
Additionally, Vestis won a large expansion award as part of a recent renewal with an existing top 10 customer in the restaurant industry. These wins demonstrate the company's ability to drive growth through strategic partnerships and operational efficiencies.
Despite facing incremental public company costs that impacted margins by 75 basis points in the fourth quarter, Vestis remains committed to achieving its goals. The company generated strong free cash flow in line with its conversion target, supporting its strategic priorities to delever and ending the year with a net leverage ratio of 3.6x.
Looking ahead to fiscal 2025, Scott expressed confidence in the company's ability to deliver against its commitments, citing cost initiatives that give Vestis great confidence in its future performance. The CEO noted that the acceleration of new business wins is expected to begin in the second quarter, with incremental volume outpacing lost business.
The conference call provided a glimpse into Vestis Corporation's plans for continued growth and profitability in fiscal 2025 and beyond. With its strong commercial momentum, operational efficiencies, and customer experience enhancements, the company is well-positioned to capitalize on the opportunities ahead."
