Vestis (VSTS) 21 Nov 242024 Q4 Earnings call transcript

Welcome to the Vestis Corporation Fiscal Fourth Quarter and Full Year 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Michael Aurelio, Vice President, Investor Relations.

Thank you, Ashley, and good morning, everyone. Welcome to the Vestis Corporation Fiscal Fourth Quarter and Full Year 2024 Earnings Call. With me here today are our President and CEO, Kim Scott; and our CFO, Rick Dillon.

the telephonic Investor this vestis.com Relations after completion a available will website reminder, the the on section of a replay call of be shortly As call. of the discussed Also, access the website the under today's are Relations available Vestis section. on Investor to on call materials the

in future that remarks Act the other variety beliefs, those we periodic the meaning filed subject reports the expectations, cause indicated Before and you Such duty Private and actual Securities I from about of contain by with Commission. We them. prospects. update and may Securities are like implied any would call differ forth begin, Reform XXXX. of of such undertake statements. include materially factors could do our that These forward-looking management's or remind Litigation to other and not risks current statements results plans to this statements factors uncertainties and Exchange estimates, risks, within Such to set a are to

I With over Kim. call to to the turn like would that,

everyone. I you by our Thank anniversary Good that behind morning, teammates a the year its Vestis company. fourth recently earnings begin Thank you, celebrated first fiscal for joining public as collective effort stand-alone want quarter Michael. to XXXX And our call. and recognizing milestone.

opportunity our strong Over and thank the tremendous commitment past each XX,XXX that shareholders. To customers will foundation at a for Vestis year, and been allow capitalize support you building has continued dedicated our the ahead. team of work your to on of hard teammates, our

billion. and EBITDA. million year on quarter with quarter in fourth revenue was expectations $X.X XXXX for full financial adjusted were solid Fourth line We our our a fiscal was revenue expectations for of that revenue ahead basis, $XXX and delivered results

XX% guidance pleased of million of representing deliver versus million $XX million. our our our guide $XX the which are EBITDA adjusted us EBITDA EBITDA We XX.X%. performance, in XX.X% year QX a to adjusted was fourth $XXX margin of allowed versus quarter with QX for very to implied full

include public points, of by full incremental As reminder, points costs, basis XX year our impacted XXXX results quarter a which the and and XXXX respectively. margin XX fourth impact basis company

generate has to conversion leverage ratio. our to line delever, strategic free in net we with year X.Xx continue our cash target. We with flow supported strong and ended the That a priorities

I on simple, want but themes. discussion to focus today important my

We commercial momentum. are building

remain today, we A room working We customers' continue drive opportunities excites but highly our regarding about And the our to is operations, we that's ahead. will still on lot talk we have efficiencies me which what Vestis, at experience. across elevating go. more and focused well to

committed We to by retention, encouraged achieving to are we're see. performance I'm and to margins, beginning what related sales best-in-class and

to some confidence move we also fiscal with and that great route cost medium our us our on base, fiscal I prepared XXXX achievements against give set seeing, wins and will small success with ability national I'll and I for touch existing with in pipeline, account we enterprise up are progress in move through commercial the remarks, profitable into commitments customers. including growth to in XXXX sales the begin continued beyond. as us customer and deliver As my initiatives our

lost sales quarter. our 'XX FY the in I'm second incremental the beginning in capabilities expect with pleased with development new business acceleration wins of outpacing business we an in and volume

leverage an in the can and our corporate capacity, segment accounts routes on the that focused margin. our market plant we have priority more incremental add past route the the excess make not a above efficient average for a national company growth been growth carry they density, These past. year, accounts, our Over was with margin of and

leading segment, company to become national including of across account see proud recent spanning really this product both for largest next with uniforms one multiple in this our years. We workplace a food and potential major large supplies. services deal of wins I'm customers a several categories the multiyear over

as existing restaurant large industry. recent We top of renewal expansion in also with the an customer part award XX a won a

valued ramped. a strongest As a current the is business my of our I've pipeline service pipeline. customer saw our of revenue double a expansion longtime its when national and partner, provider. benefit the The with with to for the consolidating tenure more This new than lane this our further revenue customer the at in trusted logos both expected seen and service record with national account during fully high state risk-weighted is Vestis,

have seller region, for leadership with our base. enterprise year-over-year a under than per than processes, level our company-wide to September, in a seen results new of early seen began field in sales in higher and sales hit we've changes and our XX% training head we In best-in-class that saw including medium competitor productivity the implementing and represents small nonprogrammers. we new the customer significant to structure. Turning then, industry believe our level making pleased and X a or to multiples productivity. targeting I'm greater is in strategies increase seller tactical our converting level fiscal Beginning early selling business our field specific XXXX. we sales also Since more that

team. points our sales possible recent data demonstrate These from what is

purposely count the over have head year, delayed past we the has sales the As of replenishment attrited team.

leader process, and our strong team. field place, are are sales expand a a size of strengthening the in sales world-class with Now leadership our we to ready institutionalizing

introducing processes turnover teammate set We be for reduce with up a into will and success forward. sound sales will going better structure and them teammates these stronger that leadership

sales. also strong to to customer continued deliver we results acquisition, addition from In new route

more growth flow XXX sales XX% fiscal and points in-year than in margin increased approximately route XXXX added Our high revenue through. basis of at

into a our more with grow in basis on route XX% XXXX, XXXX. We have objectives this and continuing line sales sustained momentum than year-to-date to with for

to related we driving efficient like I'd operations. to Now are initiatives discuss the

if on the outlined, which leverage. operating deliver to significant I we improvements could the capacity have see commercial As I've we excess discussed in we our continue past, in facilities, means

drive We I also number in have out sight will will the that which cost further of to initiatives momentarily. business discuss XXXX, line of a fiscal of

our me with capacity. Let start excess

well in growth wash in for are to opportunity volumes spend the meaningful or drive equipment We current new have gives underutilized step-up we without plants. and for our leverage capacity to without need approximately highly a XX% We the CapEx CapEx. need additional attractive plant positioned accelerate volume the believe to footprint. us This grow operating

our reuse initiatives. to merchandise We advancements strong continue optimization deliver network with and

will fiscal benefits combination We expect to as realize in-year which meaningful come XXXX, of actions. well a from these additional areas XXXX in carryover from cost as savings fiscal

further are takeout our our that cost throughout we a cost cost of Finally, year. against rationalizing FY executing portfolio the as and we profile, 'XX our operations These office include structure initiatives through field G&A. back will improving move enhance

underpinning ability in We efficiency first in have commitments already quarter, deliver of our executed confidence our opportunities the this these our year. to against many

Now customers. discuss delivering that moving an strategy to with experience direction, are in to improve I right still growing a want to will retaining opportunity remain the area have continue where best-in-class customer the existing of but laser-focused on our our and customer support We we experience.

XXXX XXXX year-over-year to better fiscal are with rate XXXX year-over-year entering versus pleased improvement basis XX.X%, which XXXX. rate. XXX retention our position the will the We by Importantly, points improved fiscal us in

what from is in and metric, this than mentioned useful be quarter retention some pleased basis. and basis can it points retention has year to in been our seasonality full we on a XXX past, more the we've year-over-year year most our fourth believe That are As the we perspective. quarter there said, lowest also evaluate a that improved seasonality of historically

a XXXX of our account pricing quarter action. to of As the the losses included fiscal retention national customer XXXX and reminder, significant response fourth in fiscal impact

good year to been To our implementing, keenly changes currently want XXXX in retention customers' has with continued a we feel illustrate are in that new retention the first. always operational we we further quickly about to can service I X of believe on putting are further highlight where the focused improvement have rate in rate fiscal We responding We needs and and October. underway. the customer measures, XX.X% initiatives started our improve

that as our and These a procedure control and new standard to operating will on-time us notification better include performance a plants measurement manage product shortages. system as measure our allow new well delivery for delivery to

almost for a an preparing in and shortage rollout the observed network-wide XX% have reduction service We related future. are location pilot requests near the in at

procedures. cultural I'm the powerful excited by operating about way improvements embrace has our underpinned around shift robust as rallied customer-first our in mindset, a this organization we

like to outlook discussing and fiscal guidance I'd our end XXXX. by for Now

our which discuss as will the this XXXX for of view basis positive growth revenue note from revenue in excludes XX.X%. of customer profit guidance the adjusted billion $X.XX to for $XXX billings we XXXX $XXX It's a line our margin of of sale and fiscal expect that onetime to and of We million that $X.X EBITDA billion improvement fiscal that to of business. XX.X% of to exited revenue million important exit customer strategy direct benefit large part and driven performance. business This XX to X% X% growth and prepared and margin to be underlying the in we will expansion impacts, better these we adjusted core our trajectory of more believe points, contribution pricing. his and both by growth is from in Rick a of current volume net remarks. Adjusted detail deliver core expect the of EBITDA

XXXX sales new carryover now lapped business. to continue from build we and lost Specifically, headwinds outsized with have momentum

we revenue a also to X% in and back lap year-over-year will the 'XX and great that the with price XXXX plan, most in with or in is to This instills of pricing continue our growth positive of XX% to and Furthermore, year. deliver tough Additionally, year the we momentum. as begin the contributor exceeding expect comps approaching be confidence what's realize we increases customers, deliver growth first EBITDA X% expect and enter 'XX. of half to that thus net we half our growth to to we fiscal fiscal exciting

themes To at back X come shared the initial I'll well Vestis. at working my is the discussion. conclude, of I lot beginning A to

building are we success seeing with continued our We commercial and are initiatives. momentum, operations efficient

customer-centric of a importance of we continue against the the portfolio to remain a culture to building our delivery operations FY We we executing identify our lastly, delivering in experience about move of with Vestis. will to addition structure. And Through efficient, improve optimization, In against the the course a I'm 'XX. to through more make lifetime keen opportunities results customer cost ahead we FY and customer we us that to of logistics our grow executing of recognition 'XX, an focused support initiatives for our allowing will order opportunity strategy, on of are outstanding base. excited cost our further our as the value are

preliminary response acquisitions received for to potential Lastly, in proposals Vestis. of

our management on that [ board We Centerview and value. Wall I are shareholder retained focused want and emphasize Partners ]. have Gotshal to maximizing

a interest public do we is company, always the what in will As best shareholders. of

your this this Given the questions will and during we in call. for sensitivity confidentiality our regarding topic, advance Thank understanding. you around answer not

that, the Rick. With like I'd to call to turn over

Thanks, Kim, good everyone. and morning,

start year-over-year. customers and of The So X% by with in expanding our revenue let's million existing from customer XXX $XXX impact of business penetration provided than was Slide bridge of by Volume quarter. cross-selling, through recurring lost the more points basis fourth revenue, offset on X. growth the growth in decreased growth new quarter quarter. approximately Revenue volume including

XXX contributed year-over-year. customers route approximately up growth growth basis and XX% customers points basis sales contributed existing points New with of XXX

from impact consists customer by the business reduced XXX exited The losses customer of year. quarter losses $XX during known losses approximately as million and revenues fourth from customer basis Net million we fiscal lost $X XXXX points.

we year retention full the year XXX at year-over-year XXX noted, points basis by ending fourth quarter basis over by Kim improved As and XX.X%. retention points,

lost more by this retention of pricing seen be the than fiscal actions result As the impact significant decline disclosed. revenue quarter a year-over-year, as was through previously entirely fourth headwind we progress have pricing direct of almost in in of XXXX. drove fiscal XX quarter basis offset a XX a in-year basis fourth actions from sales point from national account by negative the XXXX improvement, and sale half of we large rollback in of driven the the Direct of 'XX. less the year will 'XX the prior points than front

sale business, was direct impact year-over-year X% the Workplace the of supplies down year-over-year. business down and Uniform X% our Excluding

on operating 'XX, EBITDA. million of was million Slide XX%, margin leverage during incremental from X of of adjusted in net on margin The the final on the fourth offset XX% EBITDA The approximately the business was was The to pricing reflects business gains fiscal which than the $XX fourth sales was exit quarter approximately that volume customer new Adjusted business commissions by quarter favorably of Moving $XX impacted more decremental and fourth down rollback approximately quarter sales impact on incremental lost 'XX. new lost the of quarter. of costs the wins. on 'XX. and new of amortization billings

Incremental for the $X $XX costs were full million approximately [ in pubco million and ] quarter the year.

We approximately basis. fiscal are network our earlier as service costs, optimization expect lower by pricing and lower of ] down $X compensation 'XX [ expected offset discussed and these Benefits stand-alone be from and in erosion Aramark exited we transition and impact agreement a labor incentive on costs the with operational million were costs. efforts increase pubco energy logistics to as costs year-over-year, we in the fully

'XX. of lower public year volume margin was EBITDA The volume rose in quarter costs. XX.X% company a is price price of XX.X% in year-over-year to primarily and to decline quarter fourth margin erosion for incremental the net The attributable versus the

cash in operations spin-related sale the in venture million the approximately the $XXX for quarter from to to year-end. XX. fourth on and the in securitization which of quarter $XX cash proceeds completed from our flow million and of net side cash fiscal Turning the generated We costs. subsequent accounts joint Slide approximately $XX was This fiscal in the the onetime year, million benefit receivable excludes from the

centers having in facilities continue sales reuse focus and during inventories through on We operations initiatives, support in our right year million a the operating our driving $XX inventory reduction distribution growth. focus planning and garment to as on inventory we and the management

the cash the the for quarter Net million Free $XX and for during were quarter million during year. $XX of fourth million capital $XXX XXXX flow fiscal $X approximately was $XX quarter -- ahead of the year, and million year's expenditures million the in spending. last

flow flow XX% includes full of cash facility securitization XXXX. I excess the approximately conversion adjusted income EBITDA $XX quarter. to year in million cash the this and of free not in spend XXX% fiscal of reiterate that AR impact of completed want fourth in costs does and Our was onetime for net free include the the

to Turning XX. Slide

to We deleveraging. sheet through are strengthening committed our balance

to reduction. We to available loan cash continue voluntary principal channel

We 'XX. principal of billion million of payments the net debt our of the to fiscal start which in of payments approximately report $XX start includes pleased representing a our million than debt am made $X.XXX total since that $XXX net year. $X.XXX the to $XXX voluntary more compares I have paydown to in million of billion year, debt

our in debt-to-EBITDA quarter have and X.Xx to of cash to We managing generates the X.Xx. get October, As million net balance repay were a reductions targeted remain $XX leverage sale -- job previously operating done and reported, the effective debt X.X cash the significant ended subsequent we teams the completed our level to the also sheet. our debt. the and with a ratio our of leverage ability to confident of are end, to after-tax flow strong proceeds Japanese joint These business venture and used of in our quarter highlights long-term

providing to on outlook of to Slide our $X.X adjusted XXXX details million on revenue from a margin in This of results to X% EBITDA billion EBITDA we few of Again, XX.X% X% an million. XX. expect conclude XX.X%. $XXX by $XXX revenue a billion $X.XX fiscal growth I'll and approximately to and

onetime in billings with costs direct fiscal associated large guide $XX XXXX. of As and exit reflects in in $XX million 'XX sale exit of Kim absence million customer revenue our a the noted, cost strategic

improvement X our route percentage field we core as and to in as Excluding EBITDA as $XX in continued sales approximately growth thus these is and sales perspective, pricing represent items well view, similar X and business to our net expected From an a account on these million XXXX. the underlying revenue be points, reflecting growth national fiscal items, in X expect digits core we to mid-single positive trajectory 'XX. grow

both of to more of of into think 'XX pricing of with for of about half you front note primarily XXXX carryover is As along heading the guidance point 'XX 'XX. impacted indicative the that fiscal the for is phasing our important it fiscal year, the the back and business next starting these fiscal half items, our

look QX we improvement a quarter year as fourth and revenue the As to fiscal will of to continue strategic throughout the 'XX structure similar result, initiatives anticipate incremental 'XX, cost of and implement with EBITDA we enhancements. our

In of closing, we're excited about momentum the our business.

to We questions. to remarks the everyone prepared are will deliver now trajectory Kim commitments open ability XXXX. want concludes This and heading for our confident joining against I XXXX into line and us, our in our for and our thank today. we

with [Operator Wittmann Instructions] Baird. first Andy coming is from Our question

of the talk little during but on of kind put more having That's commentary bit helpful detail year after second of company environment context. new confidence just bone first bit maybe Thank Kim, that a It just have I'd better. little thought all the the conversations. that of little you is you discussions meat firming kind initiatives here and that about your what and through a a very are the little a the your transition that I some maybe base of the this quarter. the elaborate Fy all pricing 'XX, for comps a kind just the for it pricing inside sounded more like status the on you on year? the up and price your gives which with tougher, is gets of underline for you're half half, the Can bit you

to hear Yes. from Thanks, It's Andy. good morning. this you

pricing contributor prepared a be business positive 'XX. FY in said remarks, we will as for in our So our

But the of in the first will the through to right, you're we business. half headwinds we some of and with coming got pricing year, we've the we've So half into see year. the move comps as some got back deal

of customer-first around culture done deal work our metrics delivery a also great and our focus, We have our and and our shortages.

talked so root the organization. that starting around about things take the really the inside enhancements are to And I service

Chief job new Officer, this service Operating out Bill and customer our Also, mindset. an customer-first really outstanding Seward the gate, done has instilling

price to that of provide the we more All our we to price, is provide. really about take and service team that the confident and giving hold value that of service be confidence the to

starting you'll in confident and and back price, flowing around the see momentum organization are behind half. we being So price to in in that taking to standing start the that see

ask I the Obviously, and network would rollout strategies. been then always doing the for And time. for densification be are How on this of in of an much you've at us. helpful some did doing market And you more on think by I it How along topic, the 'XX? thought Anything you Great. would how market overall far of all Okay. just is update you're your planned incremental for this? I it's just time, that kind quarter? for around do much

progress the Yes. we've really We pleased this with I'm that several ago. years in path made optimization. very started logistics down

And quite It's so program the now. this us. way is we become mature work for

are are optimization. footprint routes down we're ensuring the that of constantly efficient addressing and possible path optimizing as our as So while marching still we

So in empty are not miles locations additional driving miles. wasted that docks where they that and cross are or depots networks our and belong

that we we're path. And fact, in accelerating. continue So down

we're doing more So each year, events.

the on location. dedicated We doing that's have that a by team ground

'XX. more carryover from activities 'XX, We of benefits did accelerating will out while and that generating cost in also we logistics enjoy those from in

will And continues. So really end. never this program program this

rounds continuously optimized on go. across next there network our through as X journey volume. go to and grow the we'll this but and about X got years So add first our X X in will get we've this We've we to about first more our years in optimization we this to are model Andy, of been be now the as first wave years. assessment

keep of will doing activity. We this type

flowing coming good again 'XX. well the see and as from new we'll and So good through in out cost rollover 'XX dollars it events, the see you'll as in

of of having for this of help people models question, one the do I to look kind onetime I'm And items one want try to expectations I in those that quarterly year That's get set just of is year-over-year million charges $XX to cadence. were of super basis really the just probably through helpful. that and we the terms those exit a that right. a happen for or were with get and the on Rick. or at beneficial the things kind just all more of had kind final those to from that margins question Where fall revenue just year make nature. guessing sure is their last and that their do

be level that, us So give you on would any context set I expectations. kind to it for helpful of could think

And really million back $XX to half, that front of about Sure. costs. nature There's half our speaks guidance. the of exit roughly

X front you a think happen growth the and of the in half. about front the If year. to really of direct quarterly almost of the national to half, similar Both the account with front exit when discussion similar primarily evenly they the and of a out large the get front in quarters. those, around headwind split sale we half half half lapping year, those of first weighted the in way here that system back not the their we work across returned

our from take next Stifel. will with Rosenbaum Shlomo We question

your a new how seasoned sales when add add? after how trying someone deliver add take to then expect I that or looking of force. sales you on And like stride that, them they happen of the question. getting a attrition you to does to their bring you're long Kim, salesperson? really you talk have people kind many another as revenue about looking hit you you're to start you're type Can through growth I when And your could it would expect up the to to from until you -- and sales let that wanted what from work you follow and to about you're percentage-wise, kind comment on looking force of leader board

joining for the Okay. Thank and you for call your question.

several there's a for levers sales we So second step maybe talk let because our just really inside how and ramp think back about me that. about

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The third lever adding new is teammates.

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depending and be when organization approximately. X essentially experience sales into their they weeks X on between of can come level the we so And

go they depends and onboarding go the full really their on program. a weeks they and it experience, So background their through or whether ramping protocol X through X-week

it in level in So as in their depends well environments. industry of the other their as on selling skill experience and

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already I strong sales good with place, early we evidence about So with really, Pete, leader in to our possible. team new feel to what and our demonstrating days really very our ramp continue is have ability

for were have are I mentioned entire you very from we watermark that far in in prior sales the discussions guys my And seen believe had we will if about we productivity. prepared recall levels we've that watermark, the hit remarks, industry. region in the that

And so I'm green we're that seeing very coming team. strong shoots excited that about the from

And detail in bit the challenged. then just give a more things us some you're progress in seeing of that can Okay. that you little were

X last things expected. X, before not listed or You wins quarter new as ramping

service had But improvements talked and deliberately wins more a pricing. about quality that pricing improvements you You seeing service And way issues. ramping issues. the the moderated of of there expect? any can quality in kind then that in you We little new are quantify here. bit way you'd the kind And

Yes.

our portfolio. we that, are food in seeing we absolutely into we customer So And Vestis. large that I that including services provider truly an for at become to we believe wins, the that exciting new progress and brought have opportunity that customer mentioned that some very is national account largest wins,

is that exciting. So very

adding customers with and of services I us additional highlighted with call, progress what industry, are we of customers, in additional top around adding example the set great, us XX now adding restaurant our that growing additional growing, is and I existing them. seeing locations seen who there. of which they with locations also one including are lane to also are means an We great we've expansion, an so

moment we focus I'm as that a sellers we're just that about really pipeline ago. frontline excited account about as well seeing the field on So national spoke the the

momentum. seeing definitely are we So

We team. robust that an thorough, pipeline rigorous, harvested extensive and is our also national national have very account account detailed by and being

proven as an mentioned last is over national leadership accounts our on and that that recall leading we put might now call I job. outstanding that organization new inside doing You leader a she's our team, have well, very

a to field very pleased harvesting as we're as frontline I'm national what account pipeline. sellers as So with it relates seeing well

From a touched are key I culture. with service some on we also perspective, areas that on. Starting hyper-focused

do. and also We our around taking over Chief putting Bill obsessing in we are our to our we have first Operating Officer. this customer, care our in great new all inside customer, that cause leadership brought a Seward, new customers support revolution having of business in

an first, is seen there So my during energy our around here. customer organization time across like putting I've never this

So what's discipline. about underpinning and happening with our also that first, I'm incredibly sound excited but with customer putting processes we're

experience We that last in restructure XX as about we part spoke the created to customer of fourth we when our year of a quarter regions. moved team

We also experience a team. created customer

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resources retraining with our dedicated all those are they teammates touches to have on procedures. out our customers, mapping related that procedures We our to and improving and of then procedures team, operating those

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which on-time their a that outstanding, customer an metric, have it dogs. also notification our includes we to promise to the digital the mentioned bumps delivery on on-time but customer, notification is I we our delivered that

their dropped have We products.

do to do product, sold what their did we we to we're and we when we it. said said taken have We going going were

this we the I how which now with automated transformation drive are getting interface and industry customers from Our to in touch notification communicate think in us, and customers to is going that related industry.

I'm about that. delighted So

testing making got now facilities on reducing have then the locations. as shortages, And new pilot customer shortages our XX% our And the needed. the sure pilot product we've a a we locations, to in just in delivered to of piece truck lastly, been in follow seen procedure and called out for improvement also we every

well. course will of that out as the be So the rolled over year

our things for we've in, all tell at processes got customers, that great and happening to I that. underpin here can Vestis leadership So and you are

are. good I So feel where we about really

On on your pricing the absolutely touched momentum question in of pricing, tough lap the first already we've half the last We're comps We year. business. in around to that. seeing have do

year. of the will year the and you for pricing on third the and positive balance see So emerging fourth the basis in contributing a quarter of

Okay?

take question We'll Stephanie from next Jefferies. Moore with our

Onto is Moore. This on for Harold Stephanie

to progress progress delever your XXXX, the securitization. made in guess leverage talk on do could from much if XXXX So been I and any achieve looking I And plan at and I seeing good I guess, guess guess, how profile. about when you've target? AR you you you the

over Sure. really would cash" in delevering. as And this said devote driving managing did year, that "excess XXXX, to our sheet. we continue, we past say, the to expect in towards balance addition delevering we've on from year any I really focusing

$XX from million talked additional sales the the We debt. subsequent also cash doing this gives we year, debt. quarter. operating also we we've did against of some Japanese have channel to AR cash as was $XXX about, securitization, that That that So facility. venture. initial from asset the did sold joint us And from about an towards draw a And for that there past million benefit to provided us

maintaining also there. leverage delevering of There cash expect noted, meet balance investment. down to we our sheet. while to excited we're continue are to conversion that continue and And our using the more X% So I've path that targets opportunities our as continue CapEx to we cash

'XX side I things. And the the revenue I are year you what's achieve retention growth just guess, assuming retention to implied Yes. in targets. fiscal guys guess on of

we're giving improve but retention So not a retention. we related I the to year, is what for you continue to target tell can

FY with progress FY pleased very are we versus So that in 'XX. 'XX made we the

entering it are 'XX footing We mitigating solid losses. to FY as relates on rollover

year. to and the FY had recall, 'XX FY into face 'XX, you'll from we losses throughout we rollover losses had absorb course of those to If the

we into We 'XX. rate expect we my in a in our We're move as quarter. the to October progress as and we're pleased our remarks, entering I through Also, is performance, very retention. We're 'XX, see very we to 'XX. stronger FY pleased I that mentioned much will that XX.X% come improve improved as which first mentioned position throughout that in we FY prepared continue

will We next from our Manav take Patnaik with question Barclays.

to Manav. realize cost Kennedy the ask there for meaningful is with on I that perhaps I regards further expectation This quantification. some insight savings said cost 'XX is of further initiatives, for some you and/or to an benefits. context Ronan just Could know

referenced field of type being you et quarter, that Can run time around for in rate, services, realization I expand cetera. taken upon some improving think of the cetera, you thing? in et line actions quantification G&A, current that terms

Yes.

question. hear morning. to for raising your you this from So yes, It's good thanks

everyone sure And So absolutely. that to important, really want think I we understands make and it's this.

this of actions taking cost always inside business. that. we We we're are the to absolutely right about doing appropriate And course, to have going ensure be structure that diligent

is of One of the our operations. strategy key efficient components

'XX. place carryover looking that So all very been will and we customer all at want and But that constantly a of do we've significant that. and the costs cost cost take have that into we've the been that also improving we FY and business. taken we've the we finding lower about very to doing take to are to 'XX strong deliver evaluating our We ways to foundation and confident base about I and of come also from assurances to provide related around but have our have talked out our of experience, to action diligent some you system, sales 'XX about in commitments to things of out

many We have taken those those already. actions of actions --

the have So has reduce taken prior positions. of in that count number we across to action eliminating to head this business our resulted call,

and We have head have around finance including the we most discretionary we controls accelerating we making count sure great initiatives across spending in of had plan. that significantly strategic the particular very are and in planned our have done around deal our what spending beyond original work also taken And tight down then logistics 'XX we our team recently. across company. a originally teams,

'XX happening cost make So deal a to and that our base. of our organization good things lower great we numbers. there high we'll in contributions across have the the is confidence to

CapEx, of And confirm the may helpful. on very revenues. I X% then That's

we the there I are think should in for think the think, focus I being XX%. investments and the the you about being referenced How of what again to areas square CapEx made underutilized, investment?

to As that efficiencies leave CapEx but maintenance on we years around of also within said we would first operating some enough we plants. drive our when X items, flexibility then launched channel

the use investing further It in those be are but be equipment returns. could in automation of could project-specific that specific delivering plant. So investments particular system, of our ABS existing

as capacity facilities. Kim so at And have XX% we capacity our within are XX% do -- we existing noted,

new facilities. still within to we so And processes our not are and investing but needed on build buildings, CapEx that is equipment

with then in the inning technology? are in think famous just you cetera, sports comment equipment as you could it's And et to regards you broader the analogy, it. whether ABS, of what Got automation plant to terms where of use of

I'll Yes, that. take

So a in would just couple say I of things. general,

have For ABS, a onto we that all standardize of while, essentially locations, entire those network following a is order would work of we including that and you which system, our know moved you for us who our been across Canada.

do if ability all operating do the on X us we're to adjust all to the allows want that operate we we quickly across that locations, inside a to So us we make changes, if way platform which things to gives want that. company great

the So we feel really platform. operating good about

We stack. have IT great a

feel already leveraging about we that. our systems have technology for place, in Where we're we So great about really the we're very and pleased is that customers.

are recall their that to management portal they that and quite to fingertips. accounts, launched that that and when teammates we a do to that our features, also them to that have so customers self-serve continue serving at continue new automatically we on-time and using electronically are allows of and notify You frontline we might evolve portal, which provided our we of delivery spoke that their notification, service customers a our also add world-class our bit information about

the for have we're customers are to that technology stack so we really merging experience. our a new that creating initiatives And positive create

our started to plants be you. getting honest relates just with it to we're As

to tremendous to of optimize think product opportunity through our our I plants, layouts in the there's the continue flow plants.

to layouts facilities, there us in part current labor those footprints short-term productivity not have and great of facilities, to plan. We teammates to technology look opportunity lean understand is a our and productivity our allows in at that's even good and that the but create better

So more there future. in to come opportunity the

take Tim William next question from Mulrooney our Blair. will We with

This service all one reporting in Maybe to what for our vary are categories? your segments? on should guidance. outlook, is [indiscernible] to relates And expect Tim and those U.S. across underlying to Curious the offerings Workplace just for it we your Supplies as and assumptions Canada performance on Mulrooney. Uniforms start in here, performance at XXXX

mix, workplace the to of supplies uniforms? the mix So you're referring versus look,

That's correct. Yes.

move Just kind of as performance through expectations XXXX year. for we there

Sure.

about do see -- pipeline and to strategy overall some up expect field we sales, will the Uniform our continue We mix, you itself to we on the terms mix wins some and execute account Supplies. outpace expect to Where we in sustain Supplies talk Uniforms as growth you'll you're continue you to in start Uniforms. of to even of the cross-selling. seeing Workplace the expect see pick But Workplace and therefore, national

churn support that that line. you've some a helpful. retention just seen on deck historically Maybe improving retention the then you trended Obviously, maybe a front customer noticed perhaps as in guys to around what here. now on well. have been frontline employee just employee retention doing comment improvement better you Really really to the front. And has Excellent. how could speak switching nice differently gears slide maybe I bit, and

appreciate take of teammates. to I our done that that. great Yes. you work noticing of care We're really frontline we've proud the

and that over teammates the particular, outstanding X significant in as of our turnover. related made step great customers and care customers to years, had These our are our last service on as that we We out employee us year line well strides serve the in representatives day. last really have serve our taking delivering change are our but it plants front our route every plants as and

taking So we them. care great to need of be

pleased So leaders way I'm really teammates. frontline the our have with our that embraced

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the training also the doing of things and I though so a we of do and processes, some to And talked have some putting that and making job around on really to the standard the training fill at And do procedures when are great know they them they and they We're jobs. when they feel embracing people focus company. to empowered their skills job. engaging sure if about valued their them improving and and resources that operating how we're be and their inside thrive

procedures spans new the presidents We've well. of regions, around in vice under our is them, our all the as operating smaller So our helping I now with also installed also we COO, having down that of as new and mentioned, turnover control. causing doing regional standard which go to engage and moved we're work field XX training to is also leadership

that of organization. they our better and are us sure to touch teammates and is driving make that engage allowing All this inside

thrilled So with there. Thank that we're really the out. for progress you pointing

question with take from our Oliver Davies Redburn next Atlantic. We'll

the mentioned average the Two second you give as across questions best-in-class region versus sales gap of company. you between described for force the productivity or the me. that an the indication national on class some in momentum kind best of side. And Can the one, account then you the

pricing can been strategy? you here? And changes have having if better there any discuss So to reasons you're success your the

sure. Yes, for

productivity frontline So we we significantly that seen the than what It spoke is higher multiples with historically. have we'll start higher sales about.

field the regions just seeing. of Pete. that one I let watermark So leader And you it's a change that sales know, is also dramatic a will fact, step new is what underneath hitting we're in

Pete additional resources and well. some in as So leadership brought has

happen so here are transformation this seeing we team. And across really sales frontline

it I you so And and significant meaningful. will is just tell

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volume grow when not is perhaps system capacity create tactically, that and leverage, going you that operating at valuable volume Accounts so at are from understand that the have that National will That you through you that look as get understand you SME massive blush, business. XX% customers. that very you pushing Account very the volume. I the quickly you get National attribute of density first you that And plant And to tell might significant assume to value idle you and those you when make, it value it's is as contribution if accounts. -- And profitable from

business we've Because focus there driven that or education that for hunting out Accounts. no was understand really They not our pipeline team We've National new on and did that, not were Accounts. National actually understanding and regarding of organization winning And volume company. that our for across are team put the valuable renewed now leadership around we've how these Account hunting new large and pieces National customers.

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Accounts. So great, the great engaging around win there organization National progress and hunt to

George next question Tong Goldman We'll take our Sachs. with from

you on pricing increases service much And your Can into guide? to embedding You XXXX. contributor positive revenue when begin growth how might mentioned you're elaborate to be will your quality given pricing exceeding initiatives. increases in fiscal cost input a you pricing expect

a to we definitely have price, that QX positive does as your -- talked saw to carryover to and So continue the we in impact take we it QX. won't -- in positive we as flips in of we continued It's and give in you our note have But guide. note pricing so exactly how XXXX. much the that it important lap pricing guide contributor pricing is it's we about, to

of We moderated the because in pricing disciplined 'XX. will and we continue our those about moderating talked not half actions very as back

XXXX pricing And year? do that so headwind create but will pricing a positive year. the for -- We becomes carryover the a for net expect have half positive front carryover contributor

pricing overtake expect the question second cost begin Right. increases? to the might of half around input when increases you And to

said. couldn't I'm I you sorry, quite say again? can that George, hear what you

price wage to input Yes. increases inflation, that begin your pricing increases? fuel to you input When So expect those increases? cost would when cost overtake like things inflation, increases exceed expect you

Yes.

absorbs talking cross when or those about So your question. think specifically I pricing when inflation, without fully lines that's

confident initiatives We done right we our earning first. feel take price, to done which have service our that very focus through have we work are put just the the to and continuing customer we on to

we and solid inflation, customers, And that plan appropriate the price continue drive as to with we'll so have take to to feel also appropriate. a system place cost in confident continue of to we we out absorb pricing appropriate over and really to as will as pricing time, take our evolve

that as moment for a about this we've ago and cost always well. significant success, set continue to will the implemented takeout us year to do up spoke that I already actions we

and that's it's balance increases numbers costs appropriately think price taking make system do what and sure that of that out to commitments drive. and I year. So we're you your need to self-help between drive also your healthy set up the this a underpin you to And

the already cost So executed well it's year. occur a pricing actions will that's takeout been healthy balance as throughout as of that

quality? of take will Got respect goals? hitting for think to sufficient is desired it what long then the it. you your how service, branches proportion rest That's approximately helpful. operations customer of to do your service with your And achieve And

Yes.

of have we So pockets outstanding performance.

are rise we're on location. the seeing the to always level you, do norm. will tell improve, locations those performance across will that system particular I we underperforming the opportunities are every and in versus there So of But with that focus

the we Our have customers We're knowing as that place of how delivery goal in an that raising measurement just I mentioned expectation organization. notification by we're bar performance. performed the system entire tell driving we to is level that as on-time raise we level well the is already going happen customers our for put that to seeing just everyone already. to by the whole of that accountability, the

see that do aggressive direction. team, in for them and we're our move some goals have So we starting to

of the and stronger. level of So whole across pockets of the is getting And outstanding system opportunity. the performance. pockets play rising is system,

board, continuously and we're we're to across So doing that. would the say just I improve going

have question Andrew with take more Steinerman for our one question. We from JPMorgan. time do We'll final

questions. two have actually I Kim,

the don't you're still at The And I second let positive first cross-selling. 'XX, realized understand one, give client improved and sales just growth your fiscal talk you fiscal 'XX. to X% for new pricing, X% excluding in when about But you're revenue, question. looking looking my just enhanced looking one-timers, fully you when for core retention, me

my competitive tactical ear environment. on question, nonprogrammers. you targeting when kind second talked about My little business of strategies competitor a converting both for about you I and could caught bit hoping this more, just particularly selling the was you elaborate comment

absolutely. Yes,

So I'll Rick we'll in some behind important, year. that start the we with headwinds have to price, pricing But with as come it's first some well. half Andrew, let numbers me the the remember of and

'XX over battling some from costs some where into first we're rolled of the had So that beyond we 'XX. that and quarter pricing

the lapping we're you're that's So those that headwinds. And of part seeing. reason

you that when But growth carve see macro underlying to we look particularly comps. the at move into on to you emerge excluding growth inside out seeing see level, because business, would this rate. you that? Rick, an starting we you half back are good one-timers, anything you're basis, as If get the and lower those a add lap those that you to

Sure.

negative disclosures half the Just the due you million half in based to pricing got on given, positive. the that XXXX. was front price back carryover And was net split if erosion, we've we've $XX that,

and in but pricing front the half disclosure, about to our impact. million. $XX your million again, pricing, to half positive sequential get $XX will a $XX to that at the positive it's million front about that so looking $XX just back million lap, have have to you a we We're and do the that's negative the continue in And be half we and it have we will talking pricing, and in year-over-year your in

growth. the But half, ] what going year. pleased in a to terms year-over-year And very with from at you're the in $XX we're of back see come of what to our that $XX so got but you'll pricing sequential, through seeing next net million, see net [ lap you're kind in that million we've numbers perspective here it's

to nonprogrammers very question to how work the versus rental that program. tactical the strong we're being And and around thoughtful very, processes, competing our with doing go-to-market and are then, customers selling the and relation served Andrew, rental in proposition team already by our we great your one our really of competitors in those marketplace are and our that customers value are customers strategies we're train being we're institutionalize and about for selling of strategies value

audiences. bifurcated us to is So incredibly both well focus perform we've really those our really allowing which with of

are we proposition so and we And business well wins competitors winning converting new healthy competitive our a from seeing well. We're and are value those the as balance also competing as as of conversions to nonprogrammers. and selling of nonprogrammers really

like really bringing home the we're the state some performing play, So competing that we're we've in late. out of been of there and marketplace, about these we and how we really of wins excited like and

come to there, more but great So progress.

have Fourth Call. Conference this XXXX Thank and this Earnings Quarter your disconnect wonderful Fiscal today's a Please Year line and conclude Vestis at you. Corporation's time, And will Full day.