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VSTS, Vestis Corporation

Commercial Services & Supplies diversified

Vestis Corporation is a leading provider of uniform rentals and workplace supplies across the United States and Canada.

We provide uniforms, mats, towels, linens, restroom supplies, first-aid supplies, safety products and other workplace supplies.

We have over 75 years of experience providing uniforms and workplace supplies and a broad footprint that supports efficient delivery of our services and products to more than 300,000 customer accounts (based on unique customer identification numbers) across the United States and Canada.

Latest annual: FY2025 10-K

VSTS · Vestis Corporation

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$2.7B

−2.5% YoY · 1% 3-yr CAGR

Vital signs · TTM, with 4-yr average

Revenue $2.7B 4-yr avg $2.8B

Operating margin 3.2% 4-yr avg 5.7%

ROIC 4% 4-yr avg 5%

Owner-earnings margin 4% 4-yr avg 7%

Free cash flow margin 4% 4-yr avg 7%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What moves the needle: Operating margin has run about 5.6% through the cycle, a thin margin, where volume, cost discipline and the price it gets all bear on the result. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median 6%, above 15% in 0 of 4 years). By owner earnings: roughly 6% of revenue reaches owners as cash, consistently. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2022–2025

realized figures from each filing · older years to the left

2022’22	2023’23	2024’24	2025’25	TTMTTMApr 2026
					Income statement
$2.7B	$2.8B	$2.8B	$2.7B	$2.7B	RevenueRevenue
17%	18%	18%	19%	18%	SG&A / revenueSG&A/rev
$192M	$218M	$158M	$64M	$86M	Operating incomeOp. inc.
7.2%	7.7%	5.6%	2.4%	3.2%	Operating marginOp. mgn
$142M	$213M	$21M	($40M)	($17M)	Net incomeNet inc.
25%	21%	35%	—	—	Effective tax rateTax rate
					Cash flow & returns
$233M	$257M	$472M	$64M	$150M	Operating cash flowOp. cash
$134M	$137M	$141M	$143M	$139M	DepreciationDeprec.
($61M)	($107M)	$294M	($50M)	$24M	Working capital & otherWC & other
$76M	$78M	$79M	$58M	$52M	CapexCapex
2.8%	2.8%	2.8%	2.1%	1.9%	Capex / revenueCapex/rev
$156M	$179M	$393M	$6M	$97M	Owner earningsOwner earn.
5.8%	6.3%	14.0%	0.2%	3.6%	Owner earnings marginOE mgn
$156M	$179M	$393M	$6M	$97M	Free cash flowFCF
5.8%	6.3%	14.0%	0.2%	3.6%	Free cash flow marginFCF mgn
$17M	$0	$0	—	$0	AcquisitionsAcquis.
$0	$0	$14M	$14M	$0	Dividends paidDiv. paid
6%	7%	5%	3%	4%	ROICROIC
6%	24%	2%	-5%	-2%	Return on equityROE
6%	24%	1%	−6%	−2%	Retained to equityRetained/eq
					Balance sheet
$24M	$36M	$31M	$30M	$50M	Cash & investmentsCash+inv
—	$393M	$177M	$162M	$150M	ReceivablesReceiv.
—	$175M	$165M	$179M	$175M	InventoryInvent.
—	$134M	$163M	$158M	$155M	Accounts payablePayables
—	$433M	$179M	$183M	$170M	Operating working capitalOper. WC
—	$1.0B	$813M	$850M	$851M	Current assetsCur. assets
—	$396M	$456M	$409M	$399M	Current liabilitiesCur. liab.
—	2.6×	1.8×	2.1×	2.1×	Current ratioCurr. ratio
$963M	$964M	$964M	$962M	$962M	GoodwillGoodwill
—	$3.2B	$2.9B	$2.9B	$2.9B	Total assetsAssets
—	$1.5B	$1.1B	$1.2B	$1.1B	Total debtDebt
—	$1.5B	$1.1B	$1.1B	$1.1B	Net debt / (cash)Net debt
42.3×	103.3×	1.2×	—	0.7×	Interest coverageInt. cov.
$2.3B	$877M	$903M	$866M	$867M	Shareholders’ equityEquity
0.6%	0.5%	0.6%	0.4%	0.2%	Stock comp / revenueSBC/rev
					Per share
131M	131M	132M	132M	132M	Shares out (diluted)Shares
$20.55	$21.61	$21.29	$20.76	$20.53	Revenue / shareRev/sh
$1.08	$1.63	$0.16	$-0.31	$-0.13	EPS (diluted)EPS
$1.20	$1.37	$2.98	$0.04	$0.74	Owner earnings / shareOE/sh
$1.20	$1.37	$2.98	$0.04	$0.74	Free cash flow / shareFCF/sh
$0.00	$0.00	$0.10	$0.10	$0.00	Dividends / shareDiv/sh
$0.58	$0.60	$0.60	$0.44	$0.40	Cap. spending / shareCapex/sh
$17.87	$6.71	$6.85	$6.57	$6.57	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	3-yr	5-yr
Revenue / share	+0.3%/yr	+0.3%/yr (3-yr)
Owner earnings / share	−66.8%/yr	−66.8%/yr (3-yr)
Capital spending / share	−8.8%/yr	−8.8%/yr (3-yr)
Book value / share	−28.4%/yr	−28.4%/yr (3-yr)

The record, charted

FY2022–2025

Each measure over its full record; the current point and the worst year marked.

Share count

132Mpeak FY2024

ROIC

3%low FY2025

Net debt ÷ owner earnings

195.1×peak FY2025

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$6Mowner earningsvs.($40M)net incomelow FY2025

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetained

Each year's operating cash, by what management did with it: the mix, and how it drifts.

FY2022FY2025

Owner-earnings bridge

FY2022–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business turned a $40M loss into $6M of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

	FY2025	FY2024	FY2023	FY2022
Reported net income	($40M)	$21M	$213M	$142M
Depreciation & amortizationnon-cash charge added back	+$143M	+$141M	+$137M	+$134M
Stock-based compensationreal costnon-cash, but a real cost	+$12M	+$16M	+$14M	+$17M
Working capital & othertiming of cash in and out, other non-cash items	−$50M	+$294M	−$107M	−$61M
Cash from operations	$64M	$472M	$257M	$233M
Capital expenditurecash put back in to keep running and to grow	−$58M	−$79M	−$78M	−$76M
Owner earnings	$6M	$393M	$179M	$156M
Owner-earnings marginowner earnings ÷ revenue	0%	14%	6%	6%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $12M), owner earnings is nearer ($6M).

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 0.5×

Does not cover its interest

Operating income $64M ÷ interest expense $127M

What this means
A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.
How heavy is the debt, net of cash? $1.1B · 17.5× operating profit

Heavy net debt

Cash $30M − debt $1.2B

What this means
Netting $30M of cash and short-term investments against $1.2B of debt leaves $1.1B owed, about 17.5× a year's operating profit (17.9× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? —

Not enough data

What this means
The filing data didn't include the inputs for this check.

Is it a good business?

Return on invested capital 5%

Below average through the cycle

4-yr median, range 3%–7%; the latest year is left out — large non-operating charges put its operating line well above pretax profit

Industry peers: median 8%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 4 years, so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 6%

Solid through the cycle

4-yr median margin, range 0%–14%; latest $6M = operating cash $64M − maintenance capex $58M

Industry peers: median 2%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 0% of revenue this year, a 6% median across 4 years. Treating stock comp as the real expense it is (less $12M of SBC) leaves ($6M).
Are earnings backed by cash? $64M

Loss, but cash-generative

Net income ($40M) · cash from operations $64M

What this means
The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did.

How is the cash used?

Where do the earnings go? 240%

Returned more than it generated

Dividends + buybacks $14M ÷ Owner Earnings $6M

What this means
The company returned more than it generated: against $6M of Owner Earnings, $14M (240%) went back to shareholders, $14M dividends, $0 buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.
Investing or harvesting? 0.41×

Harvesting

Capex $58M ÷ depreciation $143M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 2 of 3 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $2.7B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 2.08×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $1.2B vs $441M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.49/share (latest year $-0.30), the averaged base the calculator's gate runs on, and book value is $6.55/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2022–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 3 of 4

What this means
Lost money in 1 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 0 of 3 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 7% → 4% (2-yr avg ends)

What this means
Through the cycle the operating margin slipped — about 7% early to 4% lately, median 6% — competition or costs are biting in.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Owner earnings growth +6%/yr

What this means
Owner earnings grew about 6% a year over the record.
Worst year 2025 · 2.4% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count +0.3%/yr

What this means
Roughly flat share count, little dilution, little buyback.
Dividend record paid

What this means
Paid a dividend in 2 of the years on record.
How management talks about it Promotional

What this means
The record is compounding, but the filing leans on a promoter’s vocabulary rather than the per-share, return-on-capital terms an owner uses. The results back the talk here; the register is still worth noting.

Does AI threaten the moat?

Moderate contestability

AI is likely to reshape costs and some products here without clearly contesting or sparing the core moat; how the company itself frames it is the tell.

In its own filing A competitive risk, new this year

Its FY2025 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“We may use artificial intelligence in our business, which could result in reputational harm, competitive harm, and legal liability, and adversely affect our business, results of operations and financial condition.”

The question is whether a moat the record shows as durable outlasts a technology that lowers the cost of part of what the firm sells. The durability is read in the record above, the filing's own framing of AI beside it; the industry label decides nothing on its own.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Apr 3, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$851M

Cash & short-term investments$50M
Receivables$150M
Inventory$175M
Other current assets$476M

Current liabilities$399M

Accounts payable$155M
Other current liabilities$244M

Current ratio2.13×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.69×stricter: inventory excluded

Cash ratio0.13×strictest: cash alone against what's due

Working capital$452Mthe cushion left after near-term bills

Revenue, latest quarter vs. a year ago−0.9%the freshest read on whether the business is still growing

Current ratio, recent quarters2.4× → 2.1×

Deeper floors

Tangible book value($270M)equity stripped of goodwill & intangibles

Net current asset value($1.2B)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$1.2B$97M of it operating leases

From the company's latest filing.

How the cash was used, 2022–2025

Over the record, the business generated $1.0B of operating cash; how management split it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.

Reinvested$292M · 28%
Dividends$28M · 3%
Retained (debt / cash)$707M · 69%

Returned to owners$28M
4% of the owner earnings the business produced over the span, $28M as dividends and $0 as buybacks.
Net change in share count0.9%
The diluted count barely moved (131M to 132M): buybacks roughly offset the stock issued to staff.
Dividend record$0.10/sh
Paid in 2 of the years on record. It was never cut over the span.
Return on what it retained−16%
Of the earnings it kept rather than paid out ($308M over the span), annual owner earnings (first three years vs last three) fell $50M, so each retained $1 gave back about 0.16 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 4-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$1.2B40% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equityexceeds itgoodwill alone is larger than the company’s entire book equity; stripped of the acquisition premium, there is no net book worth

Cash spent acquiring$17Mover 4 years buying other businesses, against $292M of capital spent building

None written down over the record; the goodwill is still carried at full cost. That is the deals holding their value on the books so far; whether they keep doing so is the test an owner watches, since the write-down, when it comes, is the admission the price was too high.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 4-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid.

Insider ownership15.7%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
CEO pay ratio97:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio alone settles nothing; some businesses are genuinely top-heavy in scarce skill. A runaway figure is where Buffett starts asking whether the board is doing its job.
Stock-based compensation$12M
The slice of the business handed to employees in shares this year, 0% of revenue, equal to 18% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Vestis Corporation is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2022–2025.

None of the 4 tests turned up a mark; each came back clean. A clean panel says only that these particular ways of being wrong are not written into the record.

Each test came back clean

Is it less profitable than it was?
Did the share count rise anyway?
Did reported profit become cash?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

How much of the revenue rides on one buyer?
≈$271M · 10% of revenue on the largest customers (TTM)
“Our revenue is diversified across our many customers as demonstrated by the revenue generated from our 10 largest customers accounting for less than 10% of total revenue in fiscal year 2025.”verify →
Which reported numbers are a judgment call?
Management names Income taxes, Credit & receivables, Inventory as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Commercial Services & Supplies

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
USFDUS Foods	$39.4B	17%	2.7%	8%	2%
WKCWorld Kinect	$36.9B	3%	0.5%	6%	0%
CHSCOCHS Inc.	$35.5B	3%	1.2%	4%	2%
DPZDomino's Pizza Inc.	$4.9B	39%	18.0%	91%	12%
CHEFChefs' Warehouse	$4.1B	24%	3.2%	6%	2%
UVVUniversal Corporation	$2.9B	18%	7.6%	8%	3%
VSTSVestis Corporation	$2.7B	—	6.4%	6%	6%
HWKNHawkins	$1.1B	19%	9.4%	12%	6%
Group median	—	—	4.8%	7%	2%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Vestis Corporation has delivered.

Today’s price $

Through the cycle, Vestis Corporation earns about $166M on its 6.1% median owner-earnings margin. This year’s 0.2% margin runs below that; the reported figure may understate a lean year. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($166M) Net of stock comp (−$4M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’22→’25+6%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $97M on 132M shares outstanding, per the 10-Q cover, as of 2026-05-04; net debt $1.1B. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh VSTS against another business →

Cite: Owner Scorecard, "Vestis Corporation (VSTS), the owner's record," https://ownerscorecard.com/c/VSTS, data as of 2026-07-09.

Manual order: ← VSTM its page in the Manual VSXY →

Industry order: ← V the Commercial Services & Supplies chapter VVX →