Vestis Corp. Stock Soars on Improved Cash Flow Outlook

Vestis Corporation (NYSE: VSTS) experienced a significant pre-market stock increase on Tuesday following an upward revision of its fiscal 2026 free cash flow projections. This positive market reaction occurred despite the company reporting third-quarter earnings and revenue figures that did not meet analyst expectations.

The company's adjusted earnings per share for the quarter ending July 3, 2026, were $0.18, substantially below the anticipated $0.50. Revenue also saw a year-on-year decline of 1.8%, reaching $661.7 million and falling short of the $834.2 million forecast.

However, Vestis elevated its fiscal 2026 free cash flow guidance to a range of $160 million to $170 million, a $30 million improvement from its previous forecast. This enhanced outlook, coupled with a rise in adjusted EBITDA to $80.9 million and an expanded EBITDA margin to 12.2%, demonstrated progress in operational efficiency.

The company maintained its fiscal 2026 revenue guidance and narrowed its adjusted EBITDA forecast. Investors appeared to prioritize the strengthened cash flow outlook and improved profitability over the quarterly revenue and earnings shortfalls, indicating confidence in Vestis's ongoing strategic transformation.