Robbins LLP is Investigating Allegations that Vestis Corporation (VSTS) Misled Investors Regarding its Financial Prospects
A shareholder filed a class action on behalf of persons and entities that purchased Vestis Corporation (NYSE: VSTS) common stock between October 2, 2023 and May 1, 2024. Vestis provides rental uniforms and workplace supplies in the United States and Canada.
The Allegations
According to the complaint, Vestis was created as the result of its September 2023 spinoff from food service and facilities services provider Aramark, in which Vestis became an independent publicly traded company. Prior to the spinoff, the company that was to become Vestis operated as the Aramark Uniform Services division of Aramark, providing rental uniforms and workplace supplies. Vestis began trading as a public company on October 2, 2023.
Plaintiff alleges that during the class period defendants failed to disclose: (1) Aramark had historically underinvested in the business that became Vestis; (2) Vestis operated with outdated facilities and an underperforming sales force; and (3) Vestis’s outdated facilities and underperforming sales force led to “service gaps” that had impeded the Company’s levers of growth and had resulted in customer attrition.
On May 2, 2024, defendants issued disappointing Q2 FY2024 financial results, including a revised fiscal year outlook, with the Company “now expect[ed] to deliver fiscal 2024 revenue growth in the range of [negative] (1)% to 0%.” During the related analyst call, the Company’s CEO disclosed inconsistencies that led to Vestis’ financial decline. On this news, the price of Vestis stock fell 45%, from $18.47 per share on May 1, 2024, to a closing price of $10.16 per share on May 2, 2024.
What Now: You may be eligible to participate in the class action against Vestis Corporation. Shareholders who want to serve as lead plaintiff for the class must file their motions with the court by July 16, 2024. A lead plaintiff is a representative party who acts on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.