Vince, impacted by noncash items, reported a drop in net income for the fourth quarter ended Feb. 2 to $700,000, or 6 cents per diluted share, compared to $74.5 million, or $6.41 per diluted share, for the fourth quarter of fiscal 2017.
However, the company continued to show improvement in its operations, reporting that adjusted net income, excluding these items, was $2.4 million, or 20 cents per diluted share, as compared to an adjusted net loss of $2.4 million, or 20 cents per share, in the same period last year. The net was largely affected by a tax benefit of a year ago and certain impairment charges.
Sales increased 4.2 percent to $77.8 million as compared to $74.6 million in the same period last year. The fourth quarter of fiscal 2017 included $1.6 million of incremental net sales in the direct-to-consumer segment from the 14th week. Direct-to-consumer comparable sales grew 3.1 percent on a 13-week basis.
The gross margin rate increased 160 basis points to 47.1 percent.
“We were pleased to have delivered on our guidance for 2018, which was a pivotal year for our company, said Brendan Hoffman, chief executive officer. “We streamlined our wholesale business to focus on key partners where we achieved strong retail door sell-through, we successfully opened six new stores and drove double-digit e-commerce growth, we launched a subscription rental program and received accolades on our women’s collections throughout the year.
“We have worked diligently to rejuvenate and stabilize the Vince brand, and build a strong foundation to support long-term profitable growth. Looking ahead, for 2019, we are focused on growing our direct-to-consumer business, increasing our international presence, exploring product extensions into new categories and elevating our marketing efforts.”
For all of 2018, Vince lost $2 million, or 17 cents per share, which includes noncash asset impairment charges of $1.7 million. This compares to net income of $58.6 million, or $7.70 per diluted share, in fiscal 2017.
The adjusted net loss was $300,000, or 3 cents per share, excluding the charges, as compared to an adjusted net loss of $18.3 million in 2017.
Net sales increased 2.3 percent to $279 million from $272.6 million during fiscal-year 2017, including $1.6 million in the direct-to-consumer segment from the 53rd week.
For 2019, Vince projects net sales to be between $290 million and $300 million. Operating income is projected at between $7 million and $9 million, including an estimated $1.5 million associated with strategic consulting fees. This compares to reported operating income of $4.1 million in fiscal 2018, which included a $1.7 million noncash asset impairment charge related to property and equipment of certain retail stores.