Vestis Corporation (VSTS) Securities Class Action Lawsuit Update [July 12, 2025]

Introduction to Vestis Corporation  (VSTS) Securities Lawsuit 

A securities class action lawsuit has been filed against Vestis Corporation (NYSE: VSTS) on behalf of investors who purchased or otherwise acquired Vestis common stock between May 2, 2024, and May 6, 2025 (the “Class Period”). The lawsuit alleges that Vestis misled investors about its fiscal 2025 growth strategy, customer retention metrics, and the viability of its service and pricing initiatives.  These misstatements caused shares to trade at inflated levels until those assumptions collapsed. 

Vestis Corporation  (VSTS) Securities Lawsuit Case Details  

Case Name: Torres v. Vestis Corp., et al.  

Case No.: 1:25-cv-04844 

Jurisdiction: U.S. District Court, Southern District of New York 

Filed on: June 9, 2025 

Vestis Corporation (VSTS) Securities Company Profile  

Vestis Corporation (NYSE: VSTS) provides uniform rental and workplace supply services across the United States and Canada. Its offerings include mats, linens, restroom products, first-aid kits, and safety supplies.  It is a spin-off from Aramark.  

Class Period:  

May 2, 2024 to May 6, 2025 

Investors who purchased Vestis securities during the class period might be eligible to join the Vestis class action lawsuit. 

Allegations in the Vestis Corporation  (VSTS) Lawsuit

The complaint alleges that Vestis and its senior executives overstated the company’s ability to execute strategic service and retention initiatives throughout FY2024 and into early FY2025. 

On May 2, 2024, CEO Kimberly Scott assured investors the company was delivering great results against key strategic growth initiatives.  She cited planned strategic initiatives to improve sales productivity, increase customer retention, and improve customer experience and retention. Scott also said the service enhancements would support price increases and strengthen customer lifetime value.  Those improvements would further strengthen Vestis’ bottom-line.  

That confidence persisted through subsequent disclosures. On November 21, 2024, Vestis forecasted FY2025 revenue of $2.8–$2.83 billion and adjusted EBITDA of $345–$360 million. In January 2025, Vestis reiterated that rosy outlook, stating that Q2 volume gains would exceed churn.  

However, according to the complaint, those statements concealed deeper problems. Poor service execution, inconsistent customer retention, and forecasting gaps undermined Vestis’ growth narrative. Plaintiffs say Vestis lacked adequate controls to track attrition and service-related credits and the company’s leadership knew (or recklessly disregarded) those issues. 

The lawsuit also notes Dillon and Scott departed Vestis by February and March 2025.  Those departures were in the midsts of Vestis’ stormy performance.  

The filed complaint alleges Vestis’s failure to disclose these risks violated federal securities laws, including Sections 10(b) and 20(a) of the Securities Exchange Act. Plaintiffs’ legal claims state that Vestis’s false and misleading statements about growth and customer retention lacked a reasonable basis, and adversely affected investors. 

The Truth Emerges 

On May 7, 2025, Vestis withdrew its FY2025 growth guidance and reported lackluster Q2 results. Interim CEO Phillip Holloman attributed the shortfall to volume declines from existing customers, service-related billing credits, and lower “adds over stops.” Adjusted EBITDA margin fell to 9.4%, down from 11.9% in Q1. 

Market Reaction 

Stocks got slammed. On May 7, 2025, Vestis' stock price fell 37.54%, from $8.71 to $5.44, costing shareholders hundreds of millions. The market saw through the hype—investors paid the price for Vestis’s silence. 

Analysts expressed surprise, as these revelations defied market expectations.  Barclays cut its price target by 50%, citing persistent service culture issues. Analysts at Wolfe wrote: “The company has lost significant credibility with investors.”  Barclays added that Vestis’ churn reflected deeper operational breakdowns rather than macro trends. 

 Next Steps  

• Submissions to serve as lead plaintiff are due August 8, 2025. 

• The Court will issue its order for lead plaintiff and counsel in the weeks after submissions are due.    

• The Court will then consider motion for class certification.     

• The Court will later consider a Motion to Dismiss.    

To learn if you are eligible for recovery under the Vestis securities class action lawsuit, visit the case submission page here.

Disclaimer: This shareholder alert is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for personalized guidance. No specific outcomes are guaranteed.