Vestis was created as the result of its September 2023 spinoff from food service and facilities services provider Aramark, in which Vestis became an independent publicly traded company (the “Spinoff”).  Prior to the Spinoff, the company that was to become Vestis operated as the Aramark Uniform Services division of Aramark, providing rental uniforms and workplace supplies, including uniform delivery; laundering for rental linens, floor mats, and towels; restroom services; and first-aid supplies.

According to the Complaint, Defendants failed to disclose to investors that: (1) Aramark had historically underinvested in the business that became Vestis; (2) Vestis operated with outdated facilities and an underperforming sales force; and (3) Vestis’ outdated facilities and underperforming sales force led to “service gaps” that had impeded the Company’s levers of growth and had resulted in customer attrition.

On May 2, 2024, Vestis issued a press release reporting its financial results for the second quarter of FY2024 ended March 29, 2024.  The Company reported revenue of $705 million, a mere 0.9% year-over-year increase.  CEO Scott was quoted in the press release, stating, “Our results in the quarter and our outlook for the year are not in line with expectations.” Indeed, in the press release, Vestis also provided a “Revised Fiscal Year 2024 Outlook,” reporting that it “now expect[ed] to deliver fiscal 2024 revenue growth in the range of [negative] (1)% to 0%.”

On this news, Vestis’ stock price fell $8.31 per share, or nearly 45%, to close at $10.16 per share on May 2, 2024.

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