Vestis Corporation (NYSE: VSTS) delivered one of its strongest quarters since becoming a standalone public company, and shareholders were well-rewarded.

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Shares of Vestis surged more than 30% Tuesday after the uniform rental and workplace supplies company reported fiscal Q2 2026 results that topped Wall Street expectations while management raised full-year guidance.

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The company reported revenue of $659.4 million for the quarter ended April 3, 2026, slightly ahead of analyst estimates, while adjusted EBITDA came in at $74.5 million. GAAP earnings reached $0.02 per share compared to a loss of $0.21 per share during the same quarter last year.

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Profitability and cash flow improve

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Vestis generated $45.6 million in free cash flow during the quarter compared to negative free cash flow of roughly $6.9 million a year earlier. Operating cash flow improved to $58.3 million.

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Management also raised full-year fiscal 2026 adjusted EBITDA guidance to a range of $295 million to $325 million, up from a prior midpoint of roughly $300 million. Free cash flow guidance increased sharply to between $120 million and $150 million, more than doubling previous expectations.

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CEO Jim Barber said the company’s transformation plan is beginning to produce measurable results.

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Vestis launched a broad restructuring initiative earlier this year aimed at improving operational efficiency, pricing discipline, delivery performance, and asset utilization. Management now expects the plan to generate at least $75 million in annual operating cost savings by the end of fiscal 2026.

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The company said it has already realized roughly $15 million in benefits from the plan so far.

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Operational metrics also improved during the quarter. Vestis reported:

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  • an 11% increase in plant productivity,
  • a 270 basis-point improvement in on-time deliveries,
  • and a 4% reduction in customer complaints.

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Pricing appears to be stabilizing as well.

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Management noted that revenue per pound processed stopped declining year over year for the first time since Vestis became a public company. That matters because pricing pressure and weak operating leverage have been major investor concerns since the company was spun out of Aramark in 2023.

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The balance sheet also improved modestly.

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During the quarter, Vestis repaid $34 million of debt and ended the period with approximately $344.5 million in available liquidity, including $50.3 million in cash.

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Despite the strong market reaction, revenue growth remains relatively weak.

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Quarterly sales were essentially flat year over year, and management still expects fiscal 2026 revenue to range between flat and down 2% compared with normalized fiscal 2025 levels.

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That means the turnaround story currently depends far more on cost controls, operational improvements, and margin expansion than on meaningful top-line growth.

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Still, after several difficult quarters following the company’s separation from Aramark, Vestis is finally showing signs that the restructuring may be gaining traction.

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