Vince Holding Corp. posted second-quarter results that showed continued improvement for the contemporary brand.
Vince narrowed its second-quarter net loss to $3.8 million, or 33 cents a diluted share, from a net loss of $10.1 million, or $2.05, a year ago. The company also narrowed its operating loss to $2.4 million from a loss of $8.9 million in the same year-ago quarter. Net sales rose 3.8 percent to $63.1 million from $60.8 million, helped by a 17.2 percent jump in direct-to-consumer sales and a 14.4 percent comparable sales gain, including e-commerce. The second quarter ended Aug. 4.
Brendan Hoffman, chief executive officer, said, “Our second-quarter results illustrate the excellent progress we have made in repositioning Vince for long-term growth.” He also noted that the company saw “another quarter of strong sell-through” within the department store channel.
For fiscal year 2018, the company is projecting net sales at $273 million to $280 million, versus $272.6 million in fiscal year 2017. The company is also projecting operating income of $3 million to $7 million. That compares with the reported operating loss of $18.3 million in fiscal year 2017.
Hoffman added, “We remain encouraged by the overall trends in our business and look forward to building on our successes as we work towards returning Vince to consistent profitable growth over the long-term.”
He told analysts during the conference call that the company saw “a great response” to the product assortment, giving the management team “increased confidence that we are moving the brand in the right direction.”
“As we move through the summer, our collections are more seasonally mindful with appropriate summer and pre-fall offerings that are wearable across seasons,” Hoffman said, noting that the summer line showed light, transitional-weight fabric as the company focused on “buy-now, wear-now” product. He also noted that the brand’s men’s assortment reflecting Patrik Ervell’s first collection launched at stores last month and was well-received.
The ceo also said Vince’s e-commerce business was improved with visuals within the brand’s mobile app. “This is a visual blog that offers exclusive custom content, including interviews, editorials and imagery designed to infuse the brand [with a] distinct personality and voice. These stories primarily feature influencers, tastemakers, chefs, creators and artists based in Los Angeles to educate our customers about who and where we stand as a brand,” he told analysts.
In a telephone interview, Hoffman said, “Vince now has a better balance at wholesale, since the pullback on department store doors, because the brand got overdistributed.” The ceo also noted that the company has seen validation on its decision to rationalize its door count, given that there is now growing market share at the Nordstrom and Neiman Marcus doors the brand is in.” And the company’s best-performing doors are those in close proximity to the department store locations that the brand exited, he said.
Hoffman said the company “continues to open up stores opportunistically in markets where we have a built-in audience.” He noted that Vince will be one of the anchor tenants at Rick Caruso’s new Palisades Village, in Southern California’s Pacific Palisades. The center is slated to open on Sept. 22.
“This was a great opportunity for Vince to embrace our Southern California roots,” Hoffman said.