Q2 2024 Vestis Corp Earnings Call Transcript
Key Points
- Vestis Corp reported a 0.9% year-over-year increase in revenue, with underlying revenue growth of 2.8% when normalized for last year's temporary energy fee.
- The company achieved a strong free cash flow, demonstrating effective cost management and working capital improvements.
- Vestis Corp delivered 700 basis points of revenue growth from new business wins in FY '24 year-to-date, despite not meeting planned levels.
- Customer retention trends are improving, with the company reporting a return to historical norms and a 12-month high in customer satisfaction scores.
- Operational efficiencies are being realized, particularly in logistics, with 22 optimization events completed in the first half of the year versus 23 for the full year in FY '23.
- Adjusted EBITDA margin decreased by 90 basis points year-over-year to 12.4%, including the absorption of incremental public company costs.
- Lower than expected revenue growth impacted performance, with the company revising its full-year outlook to between negative 1% to flat year-over-year growth.
- Challenges in sales productivity and moderated pricing actions are expected to negatively impact revenue and EBITDA in the second half of the year.
- The company is experiencing service gaps that have led to customer dissatisfaction and cancellations, prompting a need to enhance service processes.
- Vestis Corp is facing a need to improve sales team performance, with current revenue per sales teammate not ramping up as required.
Hello, and welcome to the Vestis Corporation Fiscal Second Quarter 2024 Earnings Conference Call. (Operator Instructions)
I would now like to turn the call over to Bryan Johnson, Chief Accounting Officer. Please begin.
Thank you, and good morning, everyone. We appreciate your participation in Vestis Corporation's Fiscal Second Quarter 2024 Earnings Call. With me here today are our President and CEO, Kim Scott; and our CFO, Rick Dillon. As a reminder, a telephonic replay of this call will be available on the Investor Relations section of the vestis.com website shortly after the completion of the call. Also, access to the materials discussed on today's call are available on the Vestis website under the Investor Relations section.
Before we begin, I would like to remind you that this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include remarks about management's future expectations, beliefs, estimates, plans and prospects. Such statements are subject to a
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