Kaskela Law LLC is investigating Vestis Corporation (NYSE: VSTS) (“Vestis”) on behalf of the company’s long-term shareholders.

Vestis is a provider of uniforms and workplace supplies in the United States and Canada.  The company was created as the result of its September 30, 2023 spinoff from food services and facilities management provider Aramark.

Recently a securities fraud complaint was filed against Vestis on behalf of certain investors who purchased shares of the company’s stock between October 2, 2023 and May 1, 2024 (the “Class Period”).  According to the complaint, during the Class Period, Vestis and certain of the company’s senior executive officers made a series of materially false and misleading statements and failed to disclose that: (i) Aramark had historically underinvested in the business that became Vestis; (ii) Vestis operated with outdated facilities and an underperforming sales force; (iii) Vestis’s outdated facilities and underperforming sales force led to “service gaps” that had impeded the Company’s levers of growth and had resulted in customer attrition; and (iv) as a result of the above, defendants’ statements about Vestis’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.

As detailed in the complaint, the truth was revealed on May 2, 2024, when Vestis issued a press release announcing disappointing financial and operational results for the second quarter of fiscal year 2024, and revised its revenue outlook for fiscal year 2024 downward to a range of negative 1% to 0%.  During the corresponding earnings call with analysts that day, Chief Executive Officer (“CEO”) Kimberly Scott revealed the “challenges” facing the Company related “to sales productivity and deliberate moderated pricing actions,” the latter of which CEO Scott explained were necessary to “improve[] retention” and because “service gaps” had “driven price sensitivity.”  Following this news, shares of Vestis’ common stock fell $8.31 per share, or nearly 45% in value, to close at $10.16 per share on May 2, 2024, on unusually heavy trading volume.

The investigation seeks to determine whether the members of Vestis’ board of directors violated the securities laws and/or breached their fiduciary duties in connection with the above alleged misconduct.

Vestis shareholders are encouraged to contact Kaskela Law LLC (D. Seamus Kaskela, Esq. or Adrienne Bell, Esq.) at (484) 229 – 0750, or by completing the form on this page, to receive additional information about this investigation and their legal rights and options.

CONTACT:

KASKELA LAW LLC
D. Seamus Kaskela, Esq.
([email protected])
Adrienne Bell, Esq.
([email protected])
18 Campus Blvd., Suite 100
Newtown Square, PA 19073
(484) 229 – 0750