VSTS

The following discussion and analysis of Vestis Corporation’s (“Vestis”, the “Company”, “our”, “we” or “us”) financial condition and results of operations for the three and nine months ended July 3, 2026 and June 27, 2025 should be read in conjunction with our audited Consolidated and Combined Financial Statements and the notes to those statements for the fiscal year ended October 3, 2025 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission ("SEC") on December 2, 2025. This discussion contains forward-looking statements, such as our plans, objectives, opinions, expectations, anticipations, intentions, and beliefs, that are based upon our current expectations but that involve risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in those forward-looking statements as a result of a number of factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements” and elsewhere in this Quarterly Report on Form 10-Q. All amounts discussed are in thousands of U.S. dollars, unless otherwise indicated. Company Overview We are a leading provider of uniforms and workplace supplies across the United States and Canada. We provide a full range of uniform programs, managed restroom supply services, first aid supplies and safety products, as well as ancillary items such as floor mats, towels, and linens across the United States and Canada. We compete with national, regional, and local providers who vary in size, scale, capabilities and product and service offering. Primary methods of competition include product quality, service quality and price. Notable competitors of size include Cintas Corporation and UniFirst Corporation, as well as numerous regional and local competitors. Additionally, many businesses perform certain aspects of our product and service offerings in-house rather than outsourcing them to a third party and leveraging the benefits of full-service programs. Our full-service uniform offering includes the design, sourcing, manufacturing, customization, personalization, delivery, laundering, sanitization, repair, and replacement of uniforms. Our uniform options include shirts, pants, outerwear, gowns, scrubs, high visibility garments, particulate-free garments, and flame-resistant garments, along with shoes and accessories. We service our customers on a recurring rental basis, typically weekly, delivering clean uniforms while, during the same visit, picking up worn uniforms for inspection, cleaning and repair or replacement. In addition to our weekly, recurring customer contracts, we offer customized uniforms through direct sales agreements, typically for large, regional, or national companies. In addition to uniforms, we also provide workplace supplies including managed restroom supply services, first aid supplies and safety products, floor mats, towels, and linens. Similar to our uniform offering, on a recurring rental basis, generally weekly, we pick up used and soiled floor mats, towels and linens, replacing them with clean products. We also restock restroom supplies, first aid supplies and safety products as needed. We manage and operate our business in two reportable segments, United States and Canada. Both segments provide uniforms and workplace supplies, as described above, to customers within their specific geographic territories. Fiscal Year Our fiscal year is the 52- or 53-week period which ends on the Friday nearest to September 30th. The fiscal year ended October 3, 2025, referred to as fiscal 2025, was a 53-week period and the fiscal year ending October 2, 2026, referred to as fiscal 2026, is a 52-week period. Key Trends Affecting Our Results of Operations We serve the uniforms, mats, towels, linens, restroom supplies, first-aid supplies and safety products industry within the United States and Canada. This includes businesses that outsource these services through rental programs or direct purchases, as well as non-programmers, or businesses that maintain these services in-house. We believe that demand in this industry is largely influenced by macro-economic conditions, employment levels, increasing 33 Table of Contents standards for workplace hygiene and safety and an ongoing trend of businesses outsourcing non-core, back-end operations. As a result of the diversity of our customers and the wide variety of industries in which they participate, demand for our products and services is not specifically linked to the cyclical nature of any one sector. Global events, including ongoing geopolitical events, have adversely affected global economies, disrupted global supply chains and labor force participation, and created significant volatility and disruption of financial markets. While we do not have direct operations in regions currently experiencing conflict, including the Middle East and Eastern Europe, instability in these regions has contributed to increased volatility in global energy markets and broader economic uncertainty. For example, the ongoing tensions between the United States, Israel and Iran have resulted in disruptions to international shipping through the Strait of Hormuz, a waterway where approximately 20% of the world’s oil supply transits daily. These conditions have resulted in inflationary pressures, particularly in labor and energy costs, as well as fluctuations in foreign currency exchange rates. Elevated energy prices, including fuel and utility costs, have had an impact, and could in the future materially impact our cost of operations given our route-based service model and processing facilities. In addition, these global macroeconomic conditions may impact our customer spending decisions. In response to recent increases in energy costs, we implemented an energy surcharge, starting in the second fiscal quarter of 2026, to help mitigate the impact on our operating results. The extent to which these macroeconomic conditions and geopolitical developments will impact our operational and financial performance will depend on future developments, including the duration and severity of geopolitical instability, such as any ongoing or future closures of the Strait of Hormuz or other reductions or disruptions in global energy supply; governmental responses to inflation and trade policies; and our ability to mitigate cost increases through pricing actions and operational efficiencies. Many of these factors are outside of our control and remain highly uncertain. In addition, while we have attempted to pass increased costs on to our customers, where permissible, including through our recent energy surcharge, there can be no assurance that we will be able to fully recover our costs or continue to do so in the future. On May 1, 2025, we amended our Credit Agreement. As part of the amendment, among other things, we agreed to restrict all dividends and share repurchases until the earlier of (i) any fiscal quarter ending after October 2, 2026 so long as we are then in compliance with the financial covenants and (ii) when we achieve a net leverage ratio below or equal to 4.5x as of the last day of two consecutive quarters through the end of fiscal 2026. Our financial performance and a prolonged decrease in our stock price during fiscal 2025 resulted in a triggering event for a goodwill impairment test for both of our reporting units in fiscal 2025. While no impairment of goodwill was recognized in fiscal 2025, if our future operating results do not meet current forecasts or if we experience a sustained decline in our market capitalization that is determined to be indicative of a reduction in fair value of one or more of our reporting units within either of our segments, we may be required to record future impairment charges for goodwill. Transformation and Restructuring Plan During the first quarter of fiscal 2026, we approved and initiated a formal multi-year business transformation and restructuring plan (the “Plan”) to support the Company’s 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. •Operational Excellence. Implementing a standardized operating framework across our facilities and business units and streamlining the Company’s organizational structure in order to improve operating leverage, simplify execution, modernize core processes and systems and create a more scalable and efficient cost structure. 34 Table of Contents •Commercial Excellence. Executing commercial initiatives to improve customer retention, enhance profitability, and support a return to sustainable growth. Vestis is expanding product offerings and deploying new processes, tools and systems designed to strengthen customer segmentation, optimize strategic pricing and reinforce commercial discipline. •Asset & Network Optimization. Rationalizing network redundancies, reallocating equipment to higher-utilization markets, and making targeted capital investments to improve reliability and asset performance. Plan implementation began during the first quarter of fiscal 2026 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 $35 million to $40 million, with approximately $15 million related to third-party consulting and support, and up to $25 million in severance and related costs. During the third quarter of fiscal 2026, the Company recognized $6.1 million of third-party consulting fees and $1.6 million of severance costs related to the Company's business transformation. For the nine months ended July 3, 2026, the Company recognized $23.2 million of third-party consulting fees and $8.0 million of severance costs related to the business transformation. 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 connection with the implementation of the Plan. During the third fiscal quarter of 2026, we executed a long-term outsourcing arrangement for certain transactional support functions as part of our Operational Excellence initiatives under the Plan. The arrangement is expected to improve process efficiency and support the realization of future cost savings. Results of Operations Three Months Ended July 3, 2026 compared with June 27, 2025 The following table presents an overview of our results along with the amount of and percentage change between periods for the three months ended July 3, 2026 and June 27, 2025 (dollars in thousands). Three Months Ended Change Change July 3, 2026 June 27, 2025 $ % Revenue $ 661,663 $ 673,799 $ (12,136) (1.8 %) Operating Expenses: Cost of services provided(1) 476,269 491,681 (15,412) (3.1 %) Depreciation and amortization 33,272 34,856 (1,584) (4.5 %) Selling, general and administrative expenses 114,874 122,301 (7,427) (6.1 %) Total Operating Expenses 624,415 648,838 (24,423) (3.8 %) Operating Income (Loss) 37,248 24,961 12,287 49.2 % Interest Expense, net 20,118 22,495 (2,377) (10.6 %) Other Expense (Income), net 2,786 3,215 (429) (13.3 %) Income (Loss) Before Income Taxes 14,344 (749) 15,093 (2015.1 %) Provision (Benefit) for Income Taxes 3,298 (73) 3,371 (4617.8 %) Net Income (Loss) $ 11,046 $ (676) $ 11,722 (1734.0 %) ______________________ (1)Exclusive of depreciation and amortization Consolidated revenue of $661.7 million decreased $12.1 million, or 1.8%, for the three months ended July 3, 2026 compared to the three months ended June 27, 2025. The decline in revenue compared to the prior year reflects an $18.3 million decline in uniforms offset by a $6.1 million increase in workplace supplies. Net volumes decreased 35 Table of Contents 4.5% versus prior year, partially offset by strategic pricing improvements. Volume declines resulted, in part, from targeted reductions in unprofitable sales volume resulting from the Plan. Quarter over quarter, consolidated revenue was not materially impacted by fluctuations in foreign exchange rates. Cost of services provided decreased $15.4 million, or 3.1%, for the three months ended July 3, 2026 compared to the three months ended June 27, 2025. The decrease was primarily driven by a $9.4 million decline in merchandise costs, a $3.9 million reduction in plant operating cost and lower delivery costs of $1.5 million. Depreciation and amortization expense of $33.3 million for the three months ended July 3, 2026 decreased $1.6 million, or 4.5%, compared to the three months ended June 27, 2025. Selling, general and administrative expenses ("SG&A") decreased $7.4 million, or 6.1%, for the three months ended July 3, 2026 compared to the three months ended June 27, 2025. The decrease in SG&A was primarily driven by headcount reductions and other cost savings measures resulting from the Plan (including an $11.8 million decrease in salaries, wages and related employee costs), a $2.0 million decrease in separation-related charges, and a $2.7 million decrease in advertising and related costs, which were partially offset by $6.1 million of third-party consulting costs related to the Company's business transformation, a $5.4 million increase in share-based compensation and a $1.2 million increase in severance related costs, Operating income of $37.2 million increased by $12.3 million, or 49.2%, for the three months ended July 3, 2026 compared to the three months ended June 27, 2025 from the impact of changes in revenue and costs noted above. Interest expense, net, decreased $2.4 million for the three months ended July 3, 2026 compared to the three months ended June 27, 2025 primarily due to lower borrowings. Other expense, net of other income (which consists primarily of A/R Facility fees), decreased $0.4 million for the three months ended July 3, 2026 compared to the three months ended June 27, 2025. The provision for income taxes for the three months ended July 3, 2026 was recorded at an effective rate of 23.0% compared to an effective rate of 9.7% for the three months ended June 27, 2025. The higher effective tax rate was due to the impact of changes in year over year earnings and discrete items such as provision to return impacts recognized in each period. Net income of $11.0 million for the three months ended July 3, 2026 represented an improvement of $11.7 million, or 1734.0%, compared to a net loss of $0.7 million for the three months ended June 27, 2025, primarily due to the reduced operating expenses as noted above. 36 Table of Contents Results of Operations Nine Months Ended July 3, 2026 compared with June 27, 2025 The following table presents an overview of our results along with the amount of and percentage change between periods for the nine months ended July 3, 2026 and June 27, 2025 (dollars in thousands). Nine months ended Change Change July 3, 2026 June 27, 2025 $ % Revenue $ 1,984,488 $ 2,022,828 $ (38,340) (1.9 %) Operating Expenses: Cost of services provided(1) 1,454,238 1,476,932 (22,694) (1.5 %) Depreciation and amortization 102,181 107,674 (5,493) (5.1 %) Selling, general and administrative expenses 347,464 391,432 (43,968) (11.2 %) Total Operating Expenses 1,903,883 1,976,038 (72,155) (3.7 %) Operating Income (Loss) 80,605 46,790 33,815 72.3 % Loss (Gain) on Sale of Equity Investments — 2,150 (2,150) (100.0 %) Interest Expense, net 63,374 67,921 (4,547) (6.7 %) Other Expense (Income), net 8,935 10,120 (1,185) (11.7 %) Income (Loss) Before Income Taxes 8,296 (33,401) 41,697 (124.8 %) Provision (Benefit) for Income Taxes 1,045 (5,727) 6,772 (118.2 %) Net Income (Loss) $ 7,251 $ (27,674) $ 34,925 (126.2 %) ______________________ (1)Exclusive of depreciation and amortization Consolidated revenue of $1,984.5 million decreased $38.3 million, or 1.9%, for the nine months ended July 3, 2026 compared to the nine months ended June 27, 2025. The decline in revenue compared to the prior year reflects a $47.9 million decline in uniforms offset by a $9.6 million increase in workplace supplies. Net volumes decreased 2.0% versus prior year, partially offset by strategic pricing improvements. Volume declines resulted, in part, from targeted reductions in unprofitable sales volume resulting from the Plan. Consolidated revenue was positively impacted by $2.9 million from the impact of foreign exchange on currency related to our Canadian operations. Cost of services provided decreased $22.7 million, or 1.5%, for the nine months ended July 3, 2026 compared to the nine months ended June 27, 2025. The decrease was primarily driven by a $19.5 million decline in merchandise costs and a $7.1 million reduction in delivery costs. These decreases were partially offset by an $5.0 million increase in plant operating costs. Depreciation and amortization expense of $102.2 million for the nine months ended July 3, 2026 decreased $5.5 million, or 5.1%, compared to the nine months ended June 27, 2025. Selling, general and administrative expenses ("SG&A") decreased $44.0 million, or 11.2%, for the nine months ended July 3, 2026 compared to the nine months ended June 27, 2025. The decrease in SG&A was primarily driven by a $17.2 million decrease in the Company's bad debt expense and headcount reductions and other cost savings measures resulting from the Plan (including a $25.4 million decrease in salaries, wages and related employee costs), an $11.4 million decrease in advertising and related costs, an $8.5 million decrease in separation-related charges, a $4.4 million decrease in severance related costs, and a $2.0 million decrease in share-based compensation. These decreases were partially offset by $23.2 million of third-party consulting costs related to the Company's business transformation. The decrease in the bad debt allowance was primarily due to a $15 million charge to the Company's allowance for credit losses during the second quarter of fiscal 2025 based on updated estimates of collectability. The remaining improvement in bad debt expense of $2.2 million was attributable to improvements in accounts receivable related to certain working capital initiatives. Share-based compensation for the nine months ended June 27, 2025 was impacted by the acceleration of awards associated with the departure of certain executives during the period. 37 Table of Contents Operating income of $80.6 million increased by $33.8 million, or 72.3% for the nine months ended July 3, 2026 compared to the nine months ended June 27, 2025 from the impact of changes in revenue and costs noted above. Interest expense, net, decreased $4.5 million for the nine months ended July 3, 2026 compared to the nine months ended June 27, 2025 primarily due to lower borrowings. Other expense, net of other income, decreased $1.2 million for the nine months ended July 3, 2026 compared to the nine months ended June 27, 2025, due, in part, to a decrease in A/R Facility fees of $1.4 million. The provision for income taxes for the nine months ended July 3, 2026 was recorded at an effective rate of 12.6% compared to an effective rate of 17.1% for the nine months ended June 27, 2025. The lower effective tax rate was primarily driven by changes in year-over-year earnings, as well as the impact of permanent tax items, federal tax credits, and discrete tax items recognized in each period. Net income of $7.3 million for the nine months ended July 3, 2026 represented an improvement of $34.9 million, or 126.2%, compared to a net loss of $27.7 million for the nine months ended June 27, 2025, due to the impact of changes to revenue and expenses noted above. Results of Operations—United States Results Three Months Ended July 3, 2026 compared with June 27, 2025 The following table presents an overview of our United States reportable segment results along with the amount of and percentage change between periods for the three months ended July 3, 2026 and June 27, 2025 (dollars in thousands). Three Months Ended Change Change July 3, 2026 June 27, 2025 $ % Segment Revenue $ 600,742 $ 613,302 $ (12,560) (2.0 %) Segment Operating Income 55,537 40,684 14,853 36.5 % Segment Operating Income % 9.2 % 6.6 % United States revenue of $600.7 million decreased $12.6 million, or 2.0%, for the three months ended July 3, 2026 compared to the three months ended June 27, 2025 on lower overall volumes resulting, in part, from targeted reductions in unprofitable sales volume resulting from the Plan. The decline in revenue was driven by a $17.9 million decline in uniform revenue, offset by a $5.3 million increase in workplace supplies. Segment operating income of $55.5 million for the three months ended July 3, 2026 increased $14.9 million, or 36.5%, compared to the three months ended June 27, 2025, primarily driven by reduced operating expenses, partially offset by a decrease in revenue during the three months ended July 3, 2026, as described above. Segment operating income margin increased approximately 260 basis points from 6.6% for the three months ended June 27, 2025 to approximately 9.2% for the three months ended July 3, 2026. 38 Table of Contents Results of Operations—United States Results Nine Months Ended July 3, 2026 compared with June 27, 2025 The following table presents an overview of our United States reportable segment results along with the amount of and percentage change between periods for the nine months ended July 3, 2026 and June 27, 2025 (dollars in thousands). Nine months ended Change Change July 3, 2026 June 27, 2025 $ % Segment Revenue $ 1,802,551 $ 1,841,092 $ (38,541) (2.1 %) Segment Operating Income 141,525 117,269 24,256 20.7 % Segment Operating Income % 7.9 % 6.4 % United States revenue of $1,802.6 million decreased $38.5 million, or 2.1%, for the nine months ended July 3, 2026 compared to the nine months ended June 27, 2025 on lower overall volumes resulting, in part, from targeted reductions in unprofitable sales volume resulting from the Plan. The decline in revenue compared to the prior year reflects a $46.4 million decline in uniforms offset by a $7.9 million increase in workplace supplies. Segment operating income of $141.5 million for the nine months ended July 3, 2026 increased $24.3 million, or 20.7%, compared to the nine months ended June 27, 2025, primarily driven by reduced operating expenses, partially offset by a decrease in revenue during the nine months ended July 3, 2026, as described above. Segment operating income margin increased approximately 150 basis points from 6.4% for the nine months ended June 27, 2025 to approximately 7.9% for the nine months ended July 3, 2026. Results of Operations—Canada Results Three Months Ended July 3, 2026 compared with June 27, 2025 The following table presents an overview of our Canada reportable segment results along with the amount of and percentage change between periods for the three months ended July 3, 2026 and June 27, 2025 (dollars in thousands). Three Months Ended Change Change July 3, 2026 June 27, 2025 $ % Segment Revenue $ 60,921 $ 60,497 $ 424 0.7 % Segment Operating Income 2,349 2,517 (168) (6.7) % Segment Operating Income % 3.9 % 4.2 % Canada revenue of $60.9 million increased $0.4 million, or 0.7%, for the three months ended July 3, 2026 compared to the three months ended June 27, 2025. The increase in revenue compared to the prior year primarily reflects a $0.8 million increase in workplace supplies driven by strength in strategic pricing resulting from the Plan. Segment operating income of $2.3 million for the three months ended July 3, 2026 decreased $0.2 million, or 6.7%, compared to the three months ended June 27, 2025. Segment operating income margin decreased approximately 30 basis points from 4.2% for the three months ended June 27, 2025, to approximately 3.9% for the three months ended July 3, 2026. 39 Table of Contents Results of Operations—Canada Results Nine Months Ended July 3, 2026 compared with June 27, 2025 The following table presents an overview of our Canada reportable segment results along with the amount of and percentage change between periods for the nine months ended July 3, 2026 and June 27, 2025 (dollars in thousands). Nine months ended Change Change July 3, 2026 June 27, 2025 $ % Segment Revenue $ 181,937 $ 181,736 $ 201 0.1 % Segment Operating Income 6,457 6,508 (51) (0.8) % Segment Operating Income % 3.5 % 3.6 % Canada revenue of $181.9 million increased $0.2 million, or 0.1%, for the nine months ended July 3, 2026 compared to the nine months ended June 27, 2025, net of a positive impact from the impact of foreign exchange on currency of $2.9 million. The increase in revenue compared to the prior year reflects a $1.7 million increase in workplace supplies and a $1.5 million decrease in uniforms driven by strength in strategic pricing resulting from the Plan. Segment operating income of $6.5 million for the nine months ended July 3, 2026 decreased $0.1 million, or 0.8%, compared to the nine months ended June 27, 2025. Segment operating income margin decreased approximately 10 basis points from 3.6% for the nine months ended June 27, 2025, to approximately 3.5% for the nine months ended July 3, 2026. Liquidity and Capital Resources Overview As part of our capital structure, we entered into a senior secured credit agreement on September 29, 2023, which was amended in February 2024 and May 2025 (as amended, the “Credit Agreement”), which currently consists of (i) a term loan A-2 tranche due September 2028 in the amount of $700 million ("Term Loan A-2"), (ii) an $800 million Term Loan B-1 due February 2031 ("Term Loan B-1"), and (iii) a $300 million revolving credit facility. The Term Loan B-1 requires $2.0 million of principal payments each quarter until the maturity date, at which point the remaining unpaid principal amount is due. Under the Credit Agreement, we have agreed to restrict all dividends and share repurchases until the earlier of (i) any fiscal quarter ending after October 2, 2026 so long as we are then in compliance with the financial covenants and (ii) when we achieve a consolidated total net leverage ratio below or equal to 4.50x as of the last day of two consecutive quarters through the end of fiscal 2026. The Term Loan B-1 interest rate is at the Secured Overnight Financing Rate (“SOFR”) plus a margin that is between 2.0% and 2.25%, depending on our consolidated total net leverage ratio, as defined in the Credit Agreement. The applicable margin on Term Loan B-1 was 2.25% during the three months ended July 3, 2026 and June 27, 2025, and will adjust to SOFR plus 200 basis points once we achieve a 3.30x consolidated total net leverage ratio, as defined in the Credit Agreement. The Term Loan A-2 interest rate is SOFR plus a Credit Spread Adjustment of 10 basis points and a margin that is between 1.5% and 2.50%, depending on our consolidated total net leverage ratio, as defined in the Credit Agreement. The applicable margin on Term Loan A-2 was 2.50% and 2.33% during the three months ended July 3, 2026, and June 27, 2025, respectively. On August 2, 2024, Vestis Services, LLC (“Vestis Services”) and certain other subsidiaries of the Company entered into a three-year $250.0 million accounts receivable securitization facility (the “A/R Facility”). Under the A/R Facility, Vestis Services and certain other wholly-owned subsidiaries of the Company transfer accounts receivable and certain related assets to VS Financing, LLC, a bankruptcy remote special purpose entity formed as a wholly-owned subsidiary of Vestis Services ("SPE"), who in turn, may sell the receivables to one or more financial institutions ("Purchasers"). The net proceeds of the A/R Facility were used to repay a portion of the outstanding 40 Table of Contents borrowings under the existing term loans. The A/R Facility is scheduled to terminate on August 2, 2027, unless terminated earlier pursuant to its terms. As of July 3, 2026 and October 3, 2025, the total value of accounts receivable sold from the SPE to the Purchasers under the A/R Facility and derecognized from the Company's Condensed Consolidated Balance Sheet was $212.3 million and $202.5 million, respectively. As of July 3, 2026, we had approximately $57.7 million of cash and cash equivalents and no borrowings outstanding on the revolving credit facility. Maximum availability under our revolving credit facility is $300 million, of which $294.2 million was available for borrowing as of July 3, 2026. The availability under the revolver is net of letters of credit of $5.8 million. As of July 3, 2026, we had $1,097.5 million of total principal debt compared to $1,168.5 million as of October 3, 2025. The servicing of this debt will be supported by cash flows from our operations. The table below summarizes our cash activity (in thousands): Nine months ended July 3, 2026 June 27, 2025 Net cash provided by operating activities $ 160,873 $ 33,302 Net cash used in investing activities (33,456) (5,521) Net cash used in financing activities (99,825) (35,117) Reference to the Condensed Consolidated Statements of Cash Flows will facilitate an understanding of the discussion that follows. Cash Flows Provided by (Used in) Operating Activities Net cash provided by operating activities was $160.9 million for the nine months ended July 3, 2026 and $33.3 million for the nine months ended June 27, 2025. The increase in net cash provided by operating activities of $127.6 million was due, in part, to the change in operating assets and liabilities of $79.0 million, when comparing the nine months ended July 3, 2026 to the nine months ended June 27, 2025, as well as to the improvement in net income for the nine months ended July 3, 2026 compared with the nine months ended June 27, 2025. The net income for the nine months ended July 3, 2026 was $7.3 million compared to a net loss of $27.7 million for the nine months ended June 27, 2025 (see "Results of Operations" above). The change in operating assets and liabilities was, in part, due to improved management and collections of accounts receivable, increased utilization of the A/R Facility, strategic shifts in inventory management and changes in accounts payable and accrued expenses (that reflect, among other things, reduced operational spending, partly related to decreased revenue and partly related to certain cost reduction initiatives). Cash Flows Provided by (Used in) Investing Activities Net cash used in investing activities was $33.5 million for the nine months ended July 3, 2026 compared to net cash used in investing activities of $5.5 million for the nine months ended June 27, 2025. The increase of $27.9 million was primarily due to net proceeds from the sale of an equity investment during the first quarter of fiscal 2025 of $36.8 million, partially offset by $3.1 million lower year-over-year purchases of property and equipment and lower acquisition-related investments of $4.1 million. Cash Flows Provided by (Used in) Financing Activities During the nine months ended July 3, 2026, cash used in financing activities was primarily impacted by the following: •proceeds from long-term borrowings of $97.0 million; •payments of long-term borrowings of $168.0 million; and 41 Table of Contents •payments related to finance leases of $28.2 million. During the nine months ended June 27, 2025, cash used in financing activities was primarily impacted by the following: •proceeds from long-term borrowings of $93.0 million; •payments for long-term borrowings of $85.0 million; •payments related to finance leases of $25.6 million; and •dividend payments of $13.8 million. Material Cash Requirements In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future. There have not been material changes to our cash requirements since our Annual Report on Form 10-K for the fiscal year ended October 3, 2025 filed with the SEC on December 2, 2025. Additional information regarding our obligations under debt and lease arrangements are provided in Note 4. Borrowings and Note 6. Leases to the Financial Statements contained elsewhere in this Quarterly Report on Form 10-Q. Covenant Compliance The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, our ability to: incur additional indebtedness; issue preferred stock or provide guarantees; create liens on assets; engage in mergers or consolidations; sell or dispose of assets; pay dividends, make distributions or repurchase our capital stock; engage in certain transactions with affiliates; make investments, loans or advances; create restrictions on the payment of dividends or other amounts to the Company from its restricted subsidiaries; amend material agreements governing our subordinated debt; repay or repurchase any subordinated debt, except as scheduled or at maturity; make certain acquisitions; change our fiscal year; and fundamentally change our business. The Credit Agreement contains certain customary affirmative covenants. The Credit Agreement also includes customary events of default and other provisions that could require all amounts due thereunder to become immediately due and payable, at the option of the lenders, if we fail to comply with the terms of the Credit Agreement or if other customary events occur. Under the Credit Agreement, we are required to satisfy and maintain specified financial ratios and other financial condition tests and covenants. Our continued ability to meet those financial ratios, tests and covenants can be affected by events beyond our control, and there can be no assurance that we will meet those ratios, tests and covenants. For example, the Credit Agreement requires that we maintain a maximum consolidated total net leverage ratio of: (i) 5.00x for the fiscal quarter ended July 3, 2026, (ii) 4.75x for the fiscal quarter ending October 2, 2026 and (iii) 4.50x for the first quarter of fiscal 2027 and each quarter thereafter through maturity. Consolidated total net leverage ratio is defined under the Credit Agreement as consolidated total indebtedness over unrestricted cash divided by Adjusted EBITDA (as defined in the Credit Agreement). Consolidated total indebtedness is defined in the Credit Agreement as total indebtedness consisting of debt for borrowed money, finance leases, disqualified and preferred stock and advances under any receivables facility. Covenant Adjusted EBITDA is defined in the Credit Agreement as consolidated net income increased by interest expense, taxes, depreciation and amortization expense, initial public company costs, restructuring charges, write-offs and noncash charges, non-controlling interest expense, net cost savings in connection with any acquisition, disposition, or other permitted investment under the Credit Agreement, share-based compensation expense, non-recurring or unusual gains and losses, reimbursable insurance costs, cash expenses related to earn outs, and insured losses. Under the Credit Agreement, we have also agreed to limit the aggregate size of our A/R Facility and any other receivables facilities to $250 million and restrict all dividends and share repurchases, in each case until the earlier of (i) any fiscal quarter ending after October 2, 2026 so long as the Company is then in compliance with the financial covenants and (ii) when we achieve a maximum consolidated total net leverage ratio below or equal to 4.50x as of the last day of two consecutive quarters through the end of fiscal 2026. 42 Table of Contents In addition, the Credit Agreement also established a minimum interest coverage ratio, defined as Adjusted EBITDA (as defined in the Credit Agreement) divided by consolidated interest expense. The minimum interest coverage ratio is required to be at least 2.00x for the term of the Credit Agreement. As of July 3, 2026, the Company was in compliance with all covenants under the Credit Agreement. Critical Accounting Policies and Estimates Our significant accounting policies are described in the notes to the audited Consolidated and Combined Financial Statements included in our Annual Report on Form 10-K, filed with the SEC on December 2, 2025. For a more complete discussion of the critical accounting policies and estimates that we have identified in the preparation of the Financial Statements, please refer to our Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K, filed with the SEC on December 2, 2025. Management believes that there have been no significant changes during the nine months ended July 3, 2026 to the items that we disclosed as our critical accounting policies and estimates in our Annual Report on Form 10-K for the fiscal year ended October 3, 2025. In preparing financial statements, management is required to make estimates and assumptions that, among other things, affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates and assumptions are most significant where they involve levels of subjectivity and judgment necessary to account for highly uncertain matters or matters susceptible to change, and where they can have a material impact on our financial condition and operating performance. If actual results were to differ materially from the estimates made, the reported results could be materially affected. Critical accounting estimates and the related assumptions are evaluated periodically as conditions warrant, and changes to such estimates are recorded as new information or changed conditions require.

Foreign Currency Risk We are exposed to market risk from changes in foreign currency exchange rates. This exposure results from revenues and profits denominated in foreign currencies being translated into U.S. dollars and from our legal entities entering into transactions denominated in a foreign currency other than their functional currency. We currently do not enter into financial instruments to manage this foreign currency translation risk. Interest Rate Risk We are exposed to interest rate risk through fluctuations in interest rates on our debt obligations. Our outstanding Term Loan Facilities bear interest at variable rates. As a result, increases in interest rates could increase the cost of servicing our debt and could materially reduce our profitability and cash flows. There has been no material change to this market risk exposure to interest rates from that which was previously disclosed in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in our Annual Report on Form 10-K for the year ended October 3, 2025. Commodity Price Risk We are exposed to changes in prices of commodities used in our operations, primarily associated with gasoline, diesel and natural gas fuel. We seek to manage exposure to adverse commodity price changes through our normal operations as well as, from time to time, entering into commodity derivative agreements. Elevated energy prices, including fuel and utility costs have had an impact, and could in the future materially impact our cost of operations given our route-based service model and processing facilities. In addition, these global macroeconomic conditions may impact our customer spending decisions. In response to recent increases in energy costs, we implemented an energy surcharge, starting in the second fiscal quarter of 2026, to help mitigate the impact on our operating results. 43 Table of Contents

From time to time, Vestis 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 us, including actions by customers, employees, 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, we do not believe that any such actions are likely to be, individually or in the aggregate, material to our business, financial condition, results of operations or cash flows. However, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to our business, financial condition, results of operations or cash flows. We discuss significant legal proceedings pending against us in Note 8. Commitments and Contingencies in the Financial Statements in Part I, Item 1 of this quarterly report on Form 10-Q, which we incorporate herein by reference. We cannot predict the outcome of these legal matters, nor can we predict whether any outcome may be materially adverse to our business, financial condition, results of operations or cash flows. We intend to vigorously defend these matters.

There have been no material changes to the risk factors disclosed in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended October 3, 2025 filed with the SEC on December 2, 2025, as supplemented by the risk factors disclosed in Part II, Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the fiscal quarter ended April 3, 2026 filed with the SEC on May 12, 2026.