The uniform rental specialist saw its stock climb 22% to $8.94 during midday trading, bringing its year-to-date gains to 34%. The rally followed a fiscal first quarter where Vestis reported an adjusted profit of 10 cents per share, significantly outperforming the 6 cents predicted by analysts polled by FactSet. While the company posted a GAAP net loss of $6.4 million—down from a profit of $832,000 a year earlier—underlying operational improvements drove the positive market reaction.

Operational Efficiency and Outlook

Chief Executive Jim Barber attributed the performance to a sharper focus on logistics and supply chain discipline. During a call with analysts, Barber highlighted a $0.02 improvement in cost per pound compared to the previous quarter, a shift he estimates will contribute roughly $10 million to adjusted EBITDA at current volumes. The company expects these efficiency trends to persist throughout the fiscal year.

Vestis projects full-year adjusted EBITDA between $285 million and $315 million, supported by expected successive 5% quarterly improvements starting in the second quarter. This guidance comes despite a cautious top-line outlook, with full-year revenue expected to be flat or down as much as 2%. For the quarter ended Jan. 2, revenue reached $663.4 million, slightly trailing the $664.2 million consensus estimate.