Shares of Vestis Corporation (VSTS) plummeted 5.34% in pre-market trading on Wednesday following the release of its disappointing third-quarter fiscal 2025 earnings report. The uniform rental and workplace supplies provider shocked investors by reporting an unexpected loss and missing revenue estimates, highlighting ongoing challenges in its business operations.

Vestis reported a loss of $(0.01) per share (GAAP) for the quarter ended June 30, falling short of analyst expectations for a $0.05 profit per share. This marked a significant reversal from the $0.04 profit per share reported in the same quarter last year. Revenue also declined by 3.5% year-over-year to $673.8 million, slightly below the consensus estimate of $674.04 million, reflecting continued customer attrition and operational issues.

The company's financial health showed further signs of strain as free cash flow (non-GAAP) dropped sharply to $8.0 million, a 71.1% decrease from the prior year period. This steep decline in cash generation, coupled with the unexpected loss and revenue decrease, has raised concerns among investors about Vestis's ability to navigate its current challenges and return to profitability. The results underscore the urgency for the newly appointed CEO, Jim Barber, to implement effective strategies to stabilize the company's performance and reverse the negative trends in customer retention and profitability.