Shares of Vestis Corporation (NYSE: VSTS) plummeted 26.52% in pre-market trading on Wednesday, following the release of its disappointing second-quarter 2025 results and a series of strategic changes. The uniform and workplace supplies provider reported a net loss, eliminated its dividend, and revised its outlook, sending shockwaves through the investor community.

For the second quarter ended March 28, 2025, Vestis reported revenue of $665.2 million, down 5.7% year-over-year, and a net loss of $27.8 million or $(0.21) per diluted share. The company's adjusted EBITDA fell to $47.6 million, inclusive of a one-time $15 million bad debt expense. These results fell significantly short of market expectations, with adjusted earnings per share of $(0.05) missing the analyst consensus estimate of $0.14 by 135.71%.

Adding to investor concerns, Vestis announced it would eliminate its dividend to strengthen its balance sheet and amended its credit agreement to enhance financial flexibility. The company also revised its outlook, providing third-quarter 2025 revenue guidance between $674 million and $682 million, with adjusted EBITDA of at least $63 million. However, Vestis withdrew its full-year guidance for fiscal 2025, further fueling investor uncertainty. In response to these challenges, the company appointed Jim Barber as the new President and CEO, effective June 2, 2025, signaling a potential shift in strategy to address its financial difficulties.