Financial Analysis

COMMITMENTS AND CONTINGENCIES: The Company has capital and other purchase commitments of approximately $6.2 million at October 3, 2025, primarily in connection with commitments for the purchase of raw materials from vendors. From time to time, the Company and its subsidiaries are party to various legal actions, proceedings and investigations involving claims incidental to the conduct of their business or otherwise related to the Company, including actions by customers, employees, acquisition counterparties, government entities and third parties, including under federal, state, international, national, provincial and local employment laws, wage and hour laws, discrimination laws, immigration laws, human health and safety laws, import and export controls and customs laws, environmental laws, false claims or whistleblower statutes, tax codes, antitrust and competition laws, customer protection statutes, procurement regulations, intellectual property laws, supply chain laws, the Foreign Corrupt Practices Act and other anti-corruption laws, lobbying laws, motor carrier safety laws, data privacy and security laws, or alleging negligence and/or breaches of contractual and other obligations. Based on information currently available, advice of counsel, available insurance coverage, established reserves and other resources, except as set forth below with respect to the shareholder class action lawsuits and shareholder derivative action lawsuits, the Company does not believe that any su …

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BORROWINGS: Long-term borrowings, net, are summarized in the following table (in thousands): October 3, 2025 September 27, 2024 Senior secured term loan facility, due September 2028 477,500 497,500 Senior secured term loan facility, due February 2031 665,000 665,000 Senior secured revolving facility, due September 2028 26,000 Total principal debt issued 1,168,500 1,162,500 Unamortized debt issuance costs (11,959) (13,164) Discounts (1,398) (1,603) Less - current portion Long-term borrowings, net of current portion $ 1,155,143 $ 1,147,733 Credit Agreement On September 29, 2023, the Company and certain of its subsidiaries entered into a credit agreement (the Credit Agreement). The Credit Agreement was initially comprised of an $800 million term loan A-1 due September 29, 2025 (Term Loan A-1), a $700 million term loan A-2 due September 29, 2028 (Term Loan A-2), and a revolving credit facility available for loans in United States dollars and Canadian dollars with aggregate commitments of $300 million and a maturity of September 29, 2028 (the Revolving Credit Facility). The Company used approximately $1,457 million of the proceeds from the senior secured term loans to transfer cash to Aramark in connection with the separation and distribution. The Company recorded approximately $11.1 million and $2.6 million of debt issuance costs associated with the term loans and the Revolving Credit Facility, respectively. The term loan debt issuance costs are reflected as a reduction to debt i …

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The following table presents revenue disaggregated by revenue source (in thousands): Fiscal Year Ended October 3, 2025 September 27, 2024 September 29, 2023 United States: Uniforms $ 957,042 $ 1,037,608 $ 1,067,825 Workplace Supplies 1,532,334 1,518,314 1,507,527 Total United States 2,489,376 2,555,922 2,575,352 Canada: Uniforms $ 91,565 $ 96,864 $ 100,403 Workplace Supplies 153,898 153,034 149,531 Total Canada 245,463 249,898 249,934 Total Revenue $ 2,734,839 $ 2,805,820 $ 2,825,286

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SHARE-BASED COMPENSATION: On September 30, 2023, Aramark completed the previously announced spin-off of Vestis through a distribution of the Company's common stock to holders of record of Aramarks common stock as of the close of business on September 20, 2023, which resulted in previous Aramark equity awards being converted to Vestis equity awards. Additionally, the Company adopted the Vestis Corporation 2023 Long-Term Incentive Plan (LTIP) effective as of September 30, 2023. The Compensation and Human Resources Committee of the Board of Directors approves grants under the LTIP. Under the LTIP, we are authorized to issue up to 15.0 million shares for future Vestis equity awards and issued approximately 1.7 million shares related to the conversion of Aramark equity awards outstanding as of September 30, 2023 into Vestis equity awards upon the Separation from Aramark. Prior to the Separation, the Company had no share-based compensation plans. Certain employees of the Company historically participated in Aramarks Stock Incentive Plan (Aramark Stock Plan) prior to the Separation. All awards granted under Aramark Stock Plan were approved by Aramarks Compensation Committee of the Board of Directors or another committee authorized by Aramarks Board of Directors. Stock compensation expense for FY 2023 in the following table represents share-based compensation attributable to the Company based on the awards and terms previously granted to Company employees under Aramarks share-based p …

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GOODWILL AND OTHER INTANGIBLE ASSETS: Goodwill represents the excess of the fair value of consideration paid for an acquired entity over the fair value of assets acquired and liabilities assumed in a business combination. Goodwill is not amortized and is subject to impairment testing that is conducted annually or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists. Based on Aramarks historical structure, goodwill for the Company was retained within one reporting unit for the fiscal year ended September 29, 2023. For fiscal years ended October 3, 2025 and September 27, 2024, Vestis had two reporting units, United States and Canada. The annual impairment test is performed as of the end of the fiscal month of August. If results of the qualitative assessment indicate a more likely than not determination of impairment or if a qualitative assessment is not performed, a quantitative test is performed by comparing the estimated fair value, using a discounted cash flow method and/or market method for each reporting unit, with its estimated net book value. During fiscal 2025, the Company identified potential triggering events for impairment under ASC 350, Intangibles, Goodwill and Other . This conclusion was based on (i) a decline in financial performance, and (ii) a sustained decrease in the Companys share price. However, the annual impairment test for goodwill that was performed during the fourth quarter of fiscal 2025, …

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"INCOME TAXES: The components of (Loss) Income Before Income Taxes by source of income are as follows (in thousands): Fiscal Year Ended October 3, 2025 September 27, 2024 September 29, 2023 United States $ (51,995) $ 24,683 $ 254,027 Non-United States 7,689 7,347 15,703 $ (44,306) $ 32,030 $ 269,730 The (Benefit) Provision for Income Taxes consists of (in thousands): Fiscal Year Ended October 3, 2025 September 27, 2024 September 29, 2023 Current: Federal $ 5,213 $ 22,949 $ 29,704 State and local (369) 3,283 10,126 Foreign 4,471 4,404 2,372 9,315 30,636 42,202 Deferred: Federal (14,310) (14,899) 10,350 State and local (139) (3,019) 2,860 Foreign 1,051 (1,658) 1,160 (13,398) (19,576) 14,370 $ (4,083) $ 11,060 $ 56,572 The (Benefit) Provision for Income Taxes varies from the amount determined by applying the United States Federal statutory rate to Income Before Income Taxes as a result of the following (all percentages are as a percentage of (Loss) Income Before Income Taxes): Fiscal Year Ended October 3, 2025 September 27, 2024 September 29, 2023 United States statutory income tax rate 21.0 % 21.0 % 21.0 % Increase (decrease) in taxes, resulting from: State income taxes, net of Federal tax benefit 2.1 5.0 3.8 Foreign taxes (1.8) 2.6 (0.1) Separation related adjustments (5.8) (2.9) Permanent book/tax differences (5.0) 3.8 0.3 Nontaxable gain on foreign subsidiary disposition (4.0) Uncertain tax positions (0.1) 0.7 0.5 Deferred tax on foreign investments 4.3 Share-based compensat …

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LEASES: The Company has lease arrangements primarily related to real estate, vehicles and equipment, which generally have terms of one to 20 years. Finance leases primarily relate to vehicles. The Company assesses whether an arrangement is a lease, or contains a lease, upon inception of the related contract. A right-of-use asset and corresponding lease liability are not recorded for leases with an initial term of 12 months or less (short-term leases). The Company recognizes operating lease liabilities and operating lease right-of-use assets on its Consolidated Balance Sheets. Operating lease right-of-use assets represent the Companys right to use the underlying assets for the lease term, and operating lease liabilities represent the Companys obligation to make lease payments arising from the lease. Operating lease liabilities and operating lease right-of-use assets are recognized at the lease commencement date based on the estimated present value of the lease payments over the lease term. Deferred rent, tenant improvement allowances and prepaid rent are included in the operating lease right-of-use asset balances. Lease expense is recognized on a straight-line basis over the expected lease term. The Company has lease agreements with lease and non-lease components. Non-lease components are combined with the related lease components and accounted for as lease components for all classes of underlying assets. Variable lease payments, which primarily consist of real estate taxes, c …

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"New Accounting Standards Updates Adopted Standards (from most to least recent date of issuance) In November 2023, the Financial Accounting Standards Board (""FASB"") issued Accounting Standard Update (""ASU"") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which is intended to improve reportable segment disclosures, primarily through enhanced disclosures regarding significant segment expenses. The amendments require public entities to disclose significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and which are included within segment profit or loss. The Company adopted the ASU effective October 3, 2025. The ASU was required to be adopted on a retrospective basis to all periods presented. The adoption resulted in additional disclosures only and therefore had no impact on the Companys consolidated financial condition, results of operations or cash flows. See Note 10, which includes the additional disclosures that result from the adoption of the ASU. Standards Not Yet Adopted (from most to least recent date of issuance) In September 2025, the FASB issued ASU 2025-06, IntangiblesGoodwill and OtherInternal-Use Software (Subtopic 350-40)Targeted Improvements to the Accounting for Internal-Use Software, which amends the guidance on internal-use software. The ASU removes all references to prescriptive and sequential software development stages (referred to as project stages) throughout Subtopic …

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EMPLOYEE PENSION AND PROFIT SHARING PLANS: Defined Contribution Retirement Plans In the United States and Canada, the Company maintains qualified contributory defined contribution retirement plans for all Company employees meeting certain eligibility requirements, with Company contributions to the plans based on earnings performance or salary level. The total expense of the above plans for Company employees for fiscal 2025, fiscal 2024 and fiscal 2023 was $5.4 million, $9.0 million and $9.1 million, respectively, which were recorded in Cost of services provided (exclusive of depreciation and amortization) and Selling, general and administrative expenses on the Consolidated and Combined Statements of Income. Multiemployer Defined Benefit Pension Plans The Company contributes to a number of multiemployer defined benefit pension plans under the terms of collective-bargaining agreements (CBAs) that cover its union-represented employees. The risks of participating in these multiemployer plans are different from single-employer plans in the following respects: 1. Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers. 2. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. 3. If the Company chooses to stop participating in some of its multiemployer plans, the Company may be required to pay those plans …

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RELATED PARTY TRANSACTIONS AND PARENT COMPANY INVESTMENT Prior to Separation Corporate Allocations The Companys Combined Financial Statements for fiscal 2023 include general corporate expenses of Aramark, which were not historically allocated to the Company for certain support functions that were provided on a centralized basis by Aramark and are not recorded at the Company level, such as expenses related to finance, supply chain, human resources, information technology, share-based compensation, insurance and legal, among others (collectively, General Corporate Expenses). For purposes of the Combined Financial Statements for the year ended September 29, 2023, General Corporate Expenses were allocated to the Company. General Corporate Expenses are included in the Combined Statements of Income in Selling, general and administrative expenses while the impact related to Aramarks gasoline, diesel and natural gas derivative agreements are included in Cost of services provided. These expenses were allocated to the Company on the basis of direct usage where identifiable, with the remainder allocated based on revenues, headcount or other drivers. Management believes the assumptions underlying the Combined Financial Statements, including the assumptions regarding allocating General Corporate Expenses from Aramark, were reasonable. Nevertheless, the Combined Financial Statements may not include all of the actual expenses that would have been incurred and may not reflect the Companys co …

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SEVERANCE: During fiscal 2025, 2024 and 2023 , the Company approved headcount reductions to streamline and improve the efficiency and effectiveness of operational and administrative functions. As a result of these actions, severance charges of $18.7 million, $5.2 million and $7.6 million were recorded on the Consolidated and Combined Statements of Income for the fiscal years ended October 3, 2025, September 27, 2024 and September 29, 2023, respectively. For fiscal 2025 and 2024, the severance charges were recorded within Selling, general and administrative expenses. For fiscal 2023, the severance charges were recorded within Selling, general and administrative expenses and Cost of services provided (exclusive of depreciation and amortization). As of October 3, 2025 and September 27, 2024, accrued severance obligations were $7.4 million and $2.7 million, respectively . The following table summarizes the unpaid obligations for severance and related costs as of October 3, 2025, which are included in Accrued payroll and related expenses on the Consolidated Balance Sheets. (dollars in thousands) September 27, 2024 Charges (Reversals) Payments and Other October 3, 2025 Fiscal 2025 Severance $ $ 19,264 $ (11,872) $ 7,392 Fiscal 2024 Severance $ 2,561 $ (440) $ (2,121) $ Fiscal 2023 Severance $ 142 $ (142) $ $ Total $ 2,703 $ 18,682 $ (13,993) $ 7,392 The following table summarizes the unpaid obligations for severance and related costs as of September 27, 2024, which are included in …

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REVENUE RECOGNITION: Disaggregation of Revenue The following table presents revenue disaggregated by revenue source (in thousands): Fiscal Year Ended October 3, 2025 September 27, 2024 September 29, 2023 United States: Uniforms $ 957,042 $ 1,037,608 $ 1,067,825 Workplace Supplies 1,532,334 1,518,314 1,507,527 Total United States 2,489,376 2,555,922 2,575,352 Canada: Uniforms $ 91,565 $ 96,864 $ 100,403 Workplace Supplies 153,898 153,034 149,531 Total Canada 245,463 249,898 249,934 Total Revenue $ 2,734,839 $ 2,805,820 $ 2,825,286 Contract Balances The Company defers sales commissions earned by its sales force that are considered to be incremental and recoverable costs of obtaining a contract. The deferred costs are amortized using the portfolio approach on a straight-line basis over the average period of benefit, approximately nine years, and are assessed for impairment on a periodic basis. Determination of the amortization period and the subsequent assessment for impairment of the contract cost asset requires judgment. The Company expenses sales commissions as incurred if the amortization period is one year or less. As of October 3, 2025 and September 27, 2024, the Company had $107.1 million and $105.8 million, respectively, of employee sales commissions recorded as assets within Other Assets and Other Current Assets on the Companys Consolidated Balance Sheets. During fiscal 2025, fiscal 2024 and fiscal 2023, the Company recorded $22.3 million, $21.1 million and $20.1 millio …

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"BUSINESS SEGMENTS: The Company manages and evaluates its business activities based on geography and, as a result, determined that its United States and Canada businesses are its operating segments. The United States and Canada operating segments both provide a full range of uniform programs, restroom supply services and first-aid and safety products, as well as ancillary items such as floor mats, towels and linens. The Companys operating segments are also its reportable segments. Corporate includes administrative expenses not specifically allocated to an individual segment. The CODM (the Chief Operating Officer) evaluates the performance of its reportable segments, based primarily on segment operating income, and uses this information to make strategic decisions and to allocate resources. The accounting policies of the reportable segments are the same as those described in Note 1 ""Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies."" Financial information by reportable segment is as follows (in thousands): United States Canada Total Year Ended October 3, 2025 Revenue $ 2,489,376 $ 245,463 $ 2,734,839 Cost of services provided (exclusive of depreciation and amortization) 1,831,811 178,271 2,010,082 Depreciation and amortization 131,362 10,051 141,413 Selling, general and administrative expenses 372,192 48,187 420,379 Reportable segment operating income 154,011 8,954 162,965 Corporate and other (98,534) Gain (Loss) on Sale of Equity Inves …

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"EQUITY: Accumulated Other Comprehensive Loss The changes in each component of accumulated other comprehensive loss, net of tax, for the fiscal years ended October 3, 2025, September 27, 2024 and September 29, 2023 were as follows (in thousands): Fiscal Year Ended October 3, 2025 Foreign Currency Translation Pension-related Total Accumulated Other Comprehensive Loss Balance as of September 27, 2024 $ (23,812) $ (5,099) $ (28,911) Other comprehensive income (loss) (6,416) (450) (6,866) Amounts reclassified from accumulated other comprehensive income 9,450 9,450 Other comprehensive income (loss) 3,034 (450) 2,584 Balance as of October 3, 2025 $ (20,778) $ (5,549) $ (26,327) Fiscal Year Ended September 27, 2024 Foreign Currency Translation Pension-related Total Accumulated Other Comprehensive Loss Balance as of September 29, 2023 $ (26,104) $ (5,069) $ (31,173) Other comprehensive income (loss) 2,292 (30) 2,262 Balance as of September 27, 2024 $ (23,812) $ (5,099) $ (28,911) Fiscal Year Ended September 29, 2023 Foreign Currency Translation Pension-related Total Accumulated Other Comprehensive Loss Balance as of September 30, 2022 $ (27,266) $ (4,414) $ (31,680) Other comprehensive income (loss) 1,162 (655) 507 Balance as of September 29, 2023 $ (26,104) $ (5,069) $ (31,173) Dividends The Company paid dividends in the amount of $13.8 million each during fiscal 2025 and fiscal 2024 (each amount representing $0.035 per share). Dividends declared for fiscal 2025 and fiscal 2024 were …

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SUBSEQUENT EVENTS: During the first quarter of fiscal 2026, we approved and initiated a multi-year business transformation and restructuring plan (the Plan) to support the Companys initiatives to make the Company more agile, efficient and customer focused. Developed in collaboration with leading third-party advisors, the Plan is structured around three strategic priorities: Commercial Excellence, Operational Excellence and Asset and Network Optimization. These priorities establish a clear framework for near-term performance improvement and long-term value creation through disciplined execution, continuous improvement and a relentless focus on serving customers. Plan implementation has recently begun and is expected to generate annual operating cost savings of at least $75 million by the end of fiscal 2026 and to also enhance revenue. Currently we anticipate that the Plan will be substantially complete by the end of fiscal 2027 and we estimate costs of the Plan to be in the range of $25 million to $30 million, with approximately $20 million related to third-party consulting and support, and up to $10 million in severance and related costs. The estimate of the charges that the Company expects to incur in connection with the Plan, and the timing thereof, are subject to a number of assumptions and actual amounts may differ materially from estimates. In addition, the Company may incur other charges not currently contemplated due to unanticipated events that may occur, including in …

SubsequentEventsTextBlock · excerpt; the full note is in the filing