Vestis Q3 2026 presentation: first revenue per pound increase

On August 11, 2026, Vestis Corporation unveiled its Q3 2026 financial results, marking a significant turning point in the company's strategic shift. Despite revenues falling short of Wall Street's expectations, the presentation underscored the strides made in enhancing revenue quality. The company reported $661.7 million in revenue and adjusted earnings of $0.18 per share, both lower than anticipated.

However, the focus was on the operational improvements that indicate the turnaround strategy is starting to bear fruit. Vestis stock closed at $13.93, up 0.4% from the previous day, and near its 52-week range of $3.98 to $16.90, suggesting investors are optimistic about the underlying business trends.

Vestis highlighted a 23% surge in adjusted EBITDA to $80.9 million, driven by a 12.2% increase in margins from 9.8% to 12.2%. Free cash flow improved dramatically to $47.0 million, with adjusted free cash flow reaching $55.5 million—a $39 million increase year-over-year. The company achieved a record year-over-year increase in revenue per pound, reaching $1.42, up $0.04 or 2.9% from the prior year.

This improvement, despite a 4.5% decline in pounds processed, was a result of pricing enhancements that offset the decline in volume. The company reported a decline in cost per pound to $1.24, maintaining flat cost per pound despite inflationary pressures, and adjusted operating expenses dropped $27.2 million or 4.5%. These operational gains contributed to a return on working capital of 170%, up from 140% in the prior year.

Management attributed cost improvements to better merchandise and delivery costs, along with significant savings from transformation actions benefiting SG&A expenses. Looking ahead, Vestis raised its full-year fiscal 2026 outlook, expecting adjusted EBITDA of $310-315 million and free cash flow guidance of $160-170 million.