Upcoming Lead Plaintiff Deadline is July 16, 2024
NEW YORK, May 29, 2024 /PRNewswire/ -- Wolf Haldenstein Adler Freeman & Herz LLP ("Wolf Haldenstein") announces that a federal securities class action lawsuit has been filed in the United States District Court for the Northern District of Georgia behalf of investors who purchased or acquired the common stock of Vestis Corporation ("Vestis" or the "Company") (NYSE: VSTS) between October 2, 2023 and May 1, 2024, inclusive (the "Class Period").
All investors who purchased shares and incurred losses are advised to contact the firm immediately at classmember@whafh.com or (800) 575-0735 or (212) 545-4774. You may obtain additional information concerning the action or join the case on our website, www.whafh.com.
If you have incurred losses, you may, no later than July 16, 2024, request that the Court appoint you as the lead plaintiff of the proposed class. Please contact Wolf Haldenstein to learn more about your rights.
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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. Vestis began trading on the New York Stock Exchange on October 2, 2023, the first day of the Class Period, under the ticker symbol "VSTS."
Prior to the spinoff, the potential executives of Vestis claimed that "investments are in place" to deliver "5% to 7% topline growth" on compound annual growth rate (CAGR). They also assured investors that the Company's sales force had "reached their stride" and were "now hitting productivity levels that we desire from them."
After the spinoff, Vestis management highlighted the "really, really great feedback" that Vestis had received from its customer service initiatives and maintained that the Company's growth would continue to accelerate based on, among other things, Vestis "providing service excellence to our customers."
The filed complaint alleges that, during the Class Period, the Defendants made materially false and misleading statements and failed to disclose that:
- Aramark had historically underinvested in the business that became Vestis;
- Vestis operated with outdated facilities and an underperforming sale force;
- Vestis's outdated facilities and underperforming sales force led to "service gaps" that had impeded the Company's levers of growth and had resulted in customer attrition; and
- 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.
The filed complaint further alleges that the true situation at Vestis was revealed before markets opened on May 2, 2024, when a press release announcing financial results for the second quarter of fiscal year 2024, ended March 29, 2024, was released. Specifically, the Company disclosed that it had generated revenue of $705 million, a 0.9% increase over the same quarter in the prior year, and had negatively revised its revenue outlook for fiscal year 2024 to a range of -1% to 0%.
During the 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."
During the same call, analysts noted that Vestis had pivoted from a recent announcement of a price increase to a price decrease and questioned Company management about the reversal in pricing capabilities.
On this news, the price of Vestis stock plummeted 45%, from a closing price of $18.47 per share on May 1, 2024, to a closing price of $10.16 per share on May 2, 2024.
Wolf Haldenstein has experience in the prosecution of securities class actions and derivative litigation in state and federal trial and appellate courts across the country. The firm has attorneys in various practice areas, and offices in New York, Chicago, Nashville and San Diego. The reputation and expertise of this firm in shareholder and other class litigation has been repeatedly recognized by the courts, which have appointed it to major positions in complex securities multi-district and consolidated litigation.
If you wish to discuss this action or have any questions regarding your rights and interests in this case, please immediately contact Wolf Haldenstein by telephone at (800) 575-0735 or via e-mail at classmember@whafh.com.
Contact:
Wolf Haldenstein Adler Freeman & Herz LLP
Gregory Stone, Director of Case and Financial Analysis
Email: gstone@whafh.com or classmember@whafh.com
Tel: (800) 575-0735 or (212) 545-4774
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
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SOURCE Wolf Haldenstein Adler Freeman & Herz LLP
