Vestis Class Action Lawsuit: Frustrated Investors File Massive Lawsuit After Taking Portfolio Bloodbath [2025]

The Vestis class action lawsuit seeks to represent purchasers or acquirers of Vestis Corporation (NYSE: VSTS) securities between May 2, 2024 and May 6, 2025, inclusive (the “Class Period”).  Captioned Torres v. Vestis Corporation, No. 25-cv-04844 (S.D.N.Y.), the Vestis class action lawsuit charges Vestis and certain of Vestis’ former top executives with violations of the Securities Exchange Act of 1934.

If you suffered substantial losses and wish to serve as lead plaintiff of the Vestis class action lawsuit, or just have general questions about you rights as a shareholder, please contact attorney Timothy L. Miles of the Law Offices of Timothy L. Miles, at no cost, by calling 855/846-6529 or via e-mail at tmiles@timmileslaw.com.

Please see the various investor resources below for an additional wealth of information.

Lead Plaintiff Deadlines

Investor Resources

Lead Plaintiff Selection

Frequently Asked Questions

Shareholder Rights

Timeline of Events

Settlement Process

Report a Fraud

Lead plaintiff motions for the Vestis class action lawsuit must be filed with the court no later than August 8, 2025.

Investors File Class Action Against Vestis Corporation

Law firms have taken legal action against Vestis Corporation to represent investors who lost significant money. Class action lawsuits now fill the dockets of courts like the Southern District of New York and Northern District of Georgia. These lawsuits target the company and its former top executives.

The legal actions cover two distinct periods. One lawsuit represents investors who bought securities between October 2, 2023, and May 1, 2024. Another lawsuit covers those who bought shares between May 2, 2024, and May 6, 2025. Each lawsuit claims violations of the Securities Exchange Act of 1934.

Investors who want to become lead plaintiffs in the Vestis class action lawsuit must submit their motions by August 8, 2025. The court usually gives this role to the investor or group with the biggest financial stake in the case.

The lawsuits claim defendants created “false impressions” about Vestis’s revenue outlook while downplaying risks. The legal documents also state that Vestis didn’t reveal Aramark’s history of underinvestment before the spinoff. This left Vestis struggling with old facilities and a sales force that couldn’t perform well.

Vestis Faces Allegations of Misleading Investors

The Vestis Class Action Lawsuit centers on serious allegations about calculated misrepresentations. Vestis executives allegedly created “false impressions” about their revenue outlook. They downplayed risks from seasonal changes and economic shifts.

Vestis reportedly hid major operational problems from view. Court papers show Aramark had not invested enough in the business before it became Vestis. The new company inherited outdated facilities and an underperforming sales team. These basic problems created significant “service gaps” that slowed growth and caused customers to leave.

The legal action claims Vestis made “overwhelmingly positive statements” to investors. The company spread misleading information about its growth potential. They talked about plans to improve customer experience and keep more clients. The reality showed they were “simply not equipped” to reach their growth targets.

The complaint points to a clear gap between promises and actual performance. Vestis’s “optimistic guide” claimed better “satisfaction, loyalty, and retention” rates. Later, they had to admit they “lost business in excess of new business”.

The company withdrew its full-year guidance on May 7, 2025. They blamed an “increasingly uncertain macro environment”. This news caused their stock price to crash by 37% in just one day.

Stock Price Plummets After Financial Disclosure

Vestis Corporation‘s disappointing disclosures devastated shareholder value. The company’s stock crashed by 44.99% on May 2, 2024. Share prices dropped from $18.47 to $10.16, wiping out more than $1 billion in shareholder wealth.

The massive sell-off came after Vestis released its first quarter CY2025 earnings report that exposed serious operational problems. The company’s revenue dropped 5.7% year-over-year to $665.20 million, falling well below the analyst expectations of $693.00 million. The company reported a non-GAAP loss of $0.05 per share, missing analysts’ consensus estimates of $0.15.

Things got worse when the company’s adjusted EBITDA of $47.62 million missed analyst projections by 42.7%. Vestis leaders blamed these failures on “volume declines and ongoing customer service issues”. They admitted that “more than 70% of the customer cancelations are due to causes within our control”.

The company withdrew its full-year revenue and growth guidance on May 7, 2025. This announcement triggered another stock plunge of 37.54%, with prices falling from $8.71 to $5.44. The company suspended all dividends and share repurchases through fiscal 2027 to maintain financial flexibility.

JP Morgan analyst Andrew Steinerman expressed surprise at management’s unexpected change in strategy, noting their “pivot to a price decrease” instead of their previously announced price increases.

Key Takeaways

Investors who suffered massive losses from Vestis Corporation’s stock collapse now have legal recourse through multiple class action lawsuits targeting the company’s alleged securities fraud.

• Vestis stock crashed 45% in one day (May 2024) after revealing hidden operational problems, wiping out over $1 billion in shareholder value

• Multiple class action lawsuits allege Vestis misled investors by concealing Aramark’s historical underinvestment and outdated facilities

• The company admitted 70% of customer cancelations were due to controllable internal issues, contradicting previous optimistic guidance

• Affected investors who purchased shares between October 2023-May 2024 can join the lawsuit, with lead plaintiff motions due by August 8, 2025

• Vestis withdrew full-year guidance and suspended dividends through 2027, triggering another 37% stock decline in May 2025

This case serves as a stark reminder for investors to conduct thorough due diligence on spinoff companies, as promising projections may mask serious underlying operational challenges that can lead to devastating portfolio losses.

Frequently Asked Questions About Vestis Lawsuit

Q1. What is the Vestis class action lawsuit about? TheVestis class action lawsuit challeges that the company misled investors about its financial health and operational challenges. Investors claim Vestis concealed issues like outdated facilities and an underperforming sales force, leading to significant stock price drops.

Q2. When did Vestis Corporation’s stock price collapse? Vestis Corporation’s stock price experienced two major drops. The first occurred on May 2, 2024, when the stock plummeted by 45% in a single day. A second significant decline of about 37% happened on May 7, 2025, following the company’s withdrawal of financial guidance.

Q3. Who can participate in the Vestis class action lawsuit? Investors who purchased Vestis Corporation securities between October 2, 2023, and May 1, 2024, are eligible to participate in the class action lawsuit. Some lawsuits also cover investors who acquired shares up to May 6, 2025.

Q4. What are the main allegations against Vestis Corporation? The main allegations include that Vestis created false impressions about its revenue outlook, concealed operational deficiencies inherited from Aramark, and made misleading statements about its ability to grow and retain customers.

Q5. How has Vestis responded to the financial challenges? In response to its financial challenges, Vestis has withdrawn its full-year revenue and growth guidance, suspended all dividends and share repurchases through fiscal 2027, and acknowledged issues with customer cancelations and service gaps.

Conclusion

The Vestis class action lawsuit stands out as one of the most important securities fraud cases of 2025. Investors watched their portfolios take devastating hits after the company’s stock crashed by 45% in May 2024. The nightmare continued just days later with another 37% drop. Of course, the allegations against Vestis tell a troubling story of corporate misconduct. The company allegedly created “false impressions” about revenue projections and hid serious operational problems they inherited from Aramark.

Several law firms now represent affected shareholders, though the legal process has just begun with lead plaintiff motions due by August 8, 2025. Notwithstanding that, the core claims look substantial. Vestis allegedly misled investors about basic business weaknesses, including outdated facilities and a poor-performing sales force. The company’s decision to withdraw financial guidance and stop dividends confirmed shareholders’ worst fears – the actual operations were nowhere near what was promised publicly.

This case explains key issues about corporate transparency during spinoff transactions. Vestis’s shareholders took a massive hit, losing over $1 billion in value almost instantly. Management’s “overwhelmingly positive statements” clash sharply with their admission that “more than 70% of customer cancelations are due to causes within our control.” This raises serious questions about their disclosure practices.

This lawsuit’s progress through courts will serve as a warning for investors looking at spinoff companies. Vestis stock’s dramatic fall shows why investors need to do their homework, especially with newly independent companies that might have hidden problems. The case reminds us that promising financial projections and strategic plans often hide a darker business reality.