Core Viewpoint - Premarket trading is showing notable activity with significant price movements indicating potential investment opportunities before the market opens [1] Premarket Gainers - FGI Industries Ltd. (FGI) is up 278% at $15.02 [3] - Senmiao Technology Limited (AIHS) is up 96% at $4.22 [3] - Conifer Holdings, Inc. (CNFR) is up 86% at $2.11 [3] - WEBTOON Entertainment Inc. (WBTN) is up 39% at $20.81 [3] - Nukkleus Inc. (NUKK) is up 18% at $6.08 [3] - Tantech Holdings Ltd (TANH) is up 12% at $2.13 [3] - Check-Cap Ltd. (CHEK) is up 9% at $2.33 [3] - Ivanhoe Electric Inc. (IE) is up 8% at $9.71 [3] - Wolfspeed, Inc. (WOLF) is up 8% at $3.21 [3] - Bolt Projects Holdings, Inc. (BSLK) is up 5% at $3.95 [3] Premarket Losers - Envirotech Vehicles, Inc. (EVTV) is down 17% at $2.27 [4] - Dave & Buster's Entertainment, Inc. (PLAY) is down 15% at $20.40 [4] - NanoVibronix, Inc. (NAOV) is down 12% at $9.37 [4] - ADTRAN Holdings, Inc. (ADTN) is down 10% at $9.37 [4] - Rain Enhancement Technologies Holdco, Inc. (RAIN) is down 10% at $6.00 [4] - CNS Pharmaceuticals, Inc. (CNSP) is down 7% at $8.50 [4] - AVITA Medical, Inc. (RCEL) is down 7% at $6.22 [4] - Vince Holding Corp. (VNCE) is down 7% at $2.60 [4] - Monte Rosa Therapeutics, Inc. (GLUE) is down 6% at $6.50 [4] - Meiwu Technology Company Limited (WNW) is down 6% at $2.06 [4]

[Introductory Note](index=4&type=section&id=Introductory%20Note) This section outlines Vince Holding Corp.'s history, including its IPO, IP sale, and P180 acquisition, and defines key terms - Vince Holding Corp. (VHC) completed an **IPO in November 2013**, separating non-Vince businesses[8](index=8&type=chunk) - V Opco, a subsidiary, sold its intellectual property assets related to the Vince brand to **ABG-Vince, LLC** on **May 25, 2023**[9](index=9&type=chunk) - **P180 Vince Acquisition Co.** acquired a **majority stake** in the Company from affiliates of Sun Capital Partners, Inc. on **January 22, 2025**[10](index=10&type=chunk) [Disclosures Regarding Forward-Looking Statements](index=4&type=section&id=DISCLOSURES%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section outlines forward-looking statements, noting actual results may differ materially due to various risks and uncertainties - Forward-looking statements are subject to **risks and uncertainties**, and actual results may differ materially from expectations[13](index=13&type=chunk) - Key risks include changes in **trade policies and tariffs**, ability to maintain **cash flow and credit facility availability**, general economic conditions, and ability to maintain wholesale partners[14](index=14&type=chunk) - Other risks involve the **license agreement with ABG Vince**, strategic initiative benefits, lease payments, **internal control weaknesses**, and **NYSE** listing compliance[14](index=14&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents unaudited condensed consolidated financial statements and their accompanying notes [a) Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=a)%20Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) | (in thousands) | August 2, 2025 | February 1, 2025 | | :--------------- | :------------- | :--------------- | | **Assets** | | | | Total current assets | $112,071 | $96,576 | | Total assets | $238,972 | $222,735 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $69,736 | $73,546 | | Long-term debt | $31,096 | $19,156 | | Total stockholders' equity | $49,295 | $41,759 | | Total liabilities and stockholders' equity | $238,972 | $222,735 | - Total assets increased by **$16,237 (7.3%)** from **February 1, 2025**, to **August 2, 2025**, primarily driven by an increase in inventories[16](index=16&type=chunk) - Total stockholders' equity increased by **$7,536 (18.0%)** from **February 1, 2025**, to **August 2, 2025**[16](index=16&type=chunk) [b) Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=7&type=section&id=b)%20Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) | (in thousands, except per share data) | Three Months Ended August 2, 2025 | Three Months Ended August 3, 2024 | Six Months Ended August 2, 2025 | Six Months Ended August 3, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net sales | $73,241 | $74,169 | $131,174 | $133,340 | | Gross profit | $36,938 | $35,131 | $66,101 | $65,044 | | Income from operations | $11,151 | $1,130 | $6,713 | $6,734 | | Net income | $12,060 | $569 | $7,257 | $4,949 | | Basic earnings per share | $0.93 | $0.05 | $0.56 | $0.39 | | Diluted earnings per share | $0.93 | $0.05 | $0.56 | $0.39 | - Net sales decreased by **1.3%** for the three months ended **August 2, 2025**, and by **1.6%** for the six months ended **August 2, 2025**, compared to the prior year periods[19](index=19&type=chunk) - Net income significantly increased to **$12,060 thousand** for the three months ended **August 2, 2025**, from **$569 thousand** in the prior year, and to **$7,257 thousand** for the six months, from **$4,949 thousand**[19](index=19&type=chunk) [c) Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=c)%20Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) | (in thousands, except share amounts) | Balance as of February 1, 2025 | Balance as of August 2, 2025 | | :----------------------------------- | :----------------------------- | :--------------------------- | | Common Stock (Number of Shares) | 12,758,852 | 12,968,548 | | Common Stock (Par Value) | $128 | $130 | | Additional Paid-In Capital | $1,158,279 | $1,158,508 | | Accumulated Deficit | $(1,116,681) | $(1,109,424) | | Accumulated Other Comprehensive Income (Loss) | $33 | $81 | | Total Stockholders' Equity | $41,759 | $49,295 | - Total stockholders' equity increased by **$7,536** from **February 1, 2025**, to **August 2, 2025**, primarily due to net income of **$12,060** and share-based compensation expense[24](index=24&type=chunk) - The number of common shares outstanding increased from **12,758,852** to **12,968,548** during the six-month period[24](index=24&type=chunk) [d) Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=d)%20Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | (in thousands) | Six Months Ended August 2, 2025 | Six Months Ended August 3, 2024 | | :--------------- | :------------------------------ | :------------------------------ | | Net cash used in operating activities | $(7,615) | $(7,072) | | Net cash used in investing activities | $(3,530) | $(1,421) | | Net cash provided by financing activities | $11,319 | $8,081 | | Increase (decrease) in cash, cash equivalents, and restricted cash | $174 | $(412) | | Cash and cash equivalents per balance sheet at end of period | $777 | $711 | - Net cash used in operating activities increased slightly to **$7,615 thousand** for the six months ended **August 2, 2025**, from **$7,072 thousand** in the prior year, primarily due to increased inventories[30](index=30&type=chunk) - Net cash used in investing activities more than doubled to **$3,530 thousand**, driven by higher capital expenditures[30](index=30&type=chunk) [e) Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=e)%20Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [Note 1. Description of Business and Basis of Presentation](index=11&type=section&id=Note%201.%20Description%20of%20Business%20and%20Basis%20of%20Presentation) This note describes Vince Holding Corp.'s business, recent transactions, financial statement basis, liquidity, and revenue recognition - The Company operates the **Vince** brand, a global luxury apparel and accessories brand, after divesting Rebecca Taylor and Parker brands[32](index=32&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) - A strategic partnership with **Authentic Brands Group (ABG)** involved the sale of **Vince IP** for cash and a **25%** membership interest in **ABG Vince**, granting V Opco an exclusive, long-term license[33](index=33&type=chunk) - **P180** acquired a **majority stake** in the Company on **January 22, 2025**, leading to amendments in credit agreements and a significant pay-down of subordinated debt[36](index=36&type=chunk)[37](index=37&type=chunk) - The Company's liquidity sources include cash, operations, the **2023 Revolving Credit Facility**, and capital markets access, with primary cash needs for working capital, debt service, and capital expenditures[43](index=43&type=chunk) [Note 2. Recent Transactions](index=15&type=section&id=Note%202.%20Recent%20Transactions) This note details the Rebecca Taylor wind-down, Vince IP sale to ABG Vince, and P180 Acquisition, outlining their financial implications - The Rebecca Taylor business was wound down, and its intellectual property was sold in **December 2022**. The remaining shares of Rebecca Taylor, Inc. were sold in **May 2024**, resulting in a gain on sale of subsidiary of **$7,634 thousand** for the six months ended **August 3, 2024**[51](index=51&type=chunk)[53](index=53&type=chunk) - The **Vince** intellectual property was sold to **ABG-Vince LLC** for **$76,500 thousand** cash and a **25%** membership interest, with the Company accounting for this investment using the equity method[54](index=54&type=chunk)[56](index=56&type=chunk) - The **P180 Acquisition** involved **P180** purchasing a **majority stake (67%)** in the Company for approximately **$19,800 thousand** and included a **$20,000 thousand** pay-down of the Third Lien Credit Facility by V Opco and a **$7,000 thousand** debt forgiveness by **P180**, leading to a debt extinguishment gain of **$11,575 thousand** recorded as a capital contribution[65](index=65&type=chunk)[67](index=67&type=chunk)[69](index=69&type=chunk) - Under the License Agreement with **ABG Vince**, V Opco has an exclusive, long-term license to use the **Vince** brand **IP** in specified territories and for certain products, with an annual guaranteed minimum royalty of **$11,000 thousand**[59](index=59&type=chunk)[62](index=62&type=chunk) [Note 3. Fair Value Measurements](index=19&type=section&id=Note%203.%20Fair%20Value%20Measurements) This note defines fair value, outlines the three-level hierarchy for financial instruments, and discusses non-financial asset impairment - Fair value is defined as the amount received from selling an asset or paid to transfer a liability in an orderly transaction[71](index=71&type=chunk) - The Company's financial assets and liabilities are measured using a three-level fair value hierarchy: **Level 2** for revolving credit facilities (variable rates, frequent activity) and **Level 3** for the Third Lien Credit Facility (variable rates, unobservable inputs)[71](index=71&type=chunk) - Non-financial assets, such as operating lease **ROU assets** and property and equipment, are assessed for impairment periodically, with no impairment identified for the three and six months ended **August 2, 2025**[73](index=73&type=chunk) [Note 4. Long-Term Debt and Financing Arrangements](index=21&type=section&id=Note%204.%20Long-Term%20Debt%20and%20Financing%20Arrangements) This note details the Company's long-term debt, including credit facilities, their terms, and the impact of the P180 Acquisition | (in thousands) | August 2, 2025 | February 1, 2025 | | :--------------- | :------------- | :--------------- | | Revolving Credit Facilities | $22,862 | $11,413 | | Third Lien Credit Facility | $8,234 | $7,743 | | Total long-term debt | $31,096 | $19,156 | - The **2023 Revolving Credit Facility** provides up to **$85,000 thousand**, maturing on **June 23, 2028**, with interest rates based on **SOFR** or **Base Rate** plus applicable margins, and requires Excess Availability to be no less than the greater of **10.0%** of the **Loan Cap** or **$7,500 thousand**[79](index=79&type=chunk)[80](index=80&type=chunk)[82](index=82&type=chunk) - The Third Lien Credit Facility, initially **$20,000 thousand**, was significantly reduced by approximately **$27,000 thousand** through the Sun Debt Paydown and **P180** Debt Forgiveness in connection with the **P180 Acquisition**, resulting in **$7,500 thousand** remaining outstanding and a debt extinguishment gain of **$11,575 thousand**[96](index=96&type=chunk)[97](index=97&type=chunk) - As of **August 2, 2025**, the Company was in compliance with applicable covenants, with **$42,607 thousand** available under the **2023 Revolving Credit Facility** and a weighted average interest rate of **6.9%** on outstanding borrowings[86](index=86&type=chunk) [Note 5. Inventory](index=26&type=section&id=Note%205.%20Inventory) This note provides the net finished goods inventory values for the reported periods | (in thousands) | August 2, 2025 | February 1, 2025 | | :--------------- | :------------- | :--------------- | | Finished goods, net of reserves | $76,705 | $59,146 | - Finished goods inventory, net of reserves, increased by **$17,559 (29.7%)** from **February 1, 2025**, to **August 2, 2025**[98](index=98&type=chunk) [Note 6. Share-Based Compensation](index=26&type=section&id=Note%206.%20Share-Based%20Compensation) This note details share-based compensation plans, including stock option and RSU activity, and recognized compensation expense - The **Vince 2013 Incentive Plan** allows for grants of stock options, restricted stock, and other awards, with **229,962** shares available for future grants as of **August 2, 2025**[99](index=99&type=chunk) | Stock Options Activity (Six Months Ended August 2, 2025) | Number of Options | | :--------------------------------------- | :---------------- | | Outstanding at February 1, 2025 | — | | Granted | 403,650 | | Forfeited or expired | (3,300) | | Outstanding at August 2, 2025 | 400,350 | | Restricted Stock Units Activity (Six Months Ended August 2, 2025) | Number of Units | | :---------------------------------------- | :-------------- | | Non-vested at February 1, 2025 | 366,399 | | Granted | 5,000 | | Vested | (167,425) | | Non-vested at August 2, 2025 | 203,974 | - Share-based compensation expense was **$96 thousand** for the three months ended **August 2, 2025** (vs. **$255 thousand** in prior year) and **$242 thousand** for the six months ended **August 2, 2025** (vs. **$250 thousand** in prior year)[102](index=102&type=chunk) [Note 7. Stockholders' Equity](index=28&type=section&id=Note%207.%20Stockholders'%20Equity) This note describes the Company's At-the-Market Offering program for common stock sales through Virtu Americas LLC - The Company has an **At-the-Market Offering** program with **Virtu Americas LLC**, allowing it to sell up to **$10 million** of common stock under the **2024 S-3 Registration Statement**[104](index=104&type=chunk) - No offerings or sales of common stock were made under the **Virtu At-the-Market Offering** during the three and six months ended **August 2, 2025**[105](index=105&type=chunk) - As of **August 2, 2025**, **$2,925 thousand** was available under the **Virtu At-the-Market Offering**[105](index=105&type=chunk) [Note 8. Earnings Per Share](index=28&type=section&id=Note%208.%20Earnings%20Per%20Share) This note explains basic and diluted earnings per share calculation and reconciles weighted average shares outstanding | Weighted Average Shares Outstanding | Three Months Ended August 2, 2025 | Three Months Ended August 3, 2024 | Six Months Ended August 2, 2025 | Six Months Ended August 3, 2024 | | :---------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Basic | 12,906,045 | 12,569,488 | 12,863,100 | 12,538,695 | | Diluted | 12,958,739 | 12,617,085 | 12,950,828 | 12,606,575 | - Basic **EPS** is calculated by dividing net income by weighted average common shares outstanding, while diluted **EPS** includes the dilutive effect of share-based awards[106](index=106&type=chunk) - Certain weighted average shares were excluded from diluted **EPS** computation due to their anti-dilutive effect: **522,638** for the three months and **182,809** for the six months ended **August 2, 2025**[107](index=107&type=chunk) [Note 9. Commitments and Contingencies](index=29&type=section&id=Note%209.%20Commitments%20and%20Contingencies) This note addresses legal proceedings, contingencies, and details the recognition and receipt of Employee Retention Tax Credits (ERC) - The Company is involved in ordinary course legal proceedings and believes their ultimate outcome will not materially impact financial position or results[108](index=108&type=chunk) - In the second quarter of fiscal **2025**, the Company received **$7,173 thousand** in payments for Employee Retention Tax Credits (**ERC**) from the **CARES Act**, including **$1,560 thousand** in interest[110](index=110&type=chunk) - The **ERC** benefit of **$5,613 thousand** was recorded as an offset to compensation expense within SG&A, and the **$1,560 thousand** interest was recorded as Other (income)[110](index=110&type=chunk) [Note 10. Income Taxes](index=29&type=section&id=Note%2010.%20Income%20Taxes) This note explains the Company's income tax provision, deferred tax assets, and the impact of the One Big Beautiful Bill Act (OBBBA) - The Company recorded a discrete tax expense of **$58 thousand** for the three and six months ended **August 2, 2025**, related to interest received from the **ERC**[112](index=112&type=chunk) - Despite year-to-date ordinary pre-tax losses, the Company anticipates annual ordinary pre-tax income, but has determined that the tax benefit of year-to-date losses is unlikely to be realized in the current or future years[112](index=112&type=chunk) - The Company maintains a full valuation allowance against its deferred tax assets, which will remain until sufficient positive evidence supports their realization[115](index=115&type=chunk) - The recently enacted **One Big Beautiful Bill Act (OBBBA)** did not have a material impact on the Company's income tax provision for the three and six months ended **August 2, 2025**, and no material effect is anticipated for the full fiscal year[116](index=116&type=chunk) [Note 11. Leases](index=31&type=section&id=Note%2011.%20Leases) This note outlines the Company's operating lease accounting, detailing ROU assets, lease liabilities, total lease cost, and future maturities - The Company has operating leases for real estate, with **ROU assets** and operating lease liabilities recognized based on the present value of future lease payments using an estimated incremental borrowing rate[117](index=117&type=chunk)[118](index=118&type=chunk) | (in thousands) | Three Months Ended August 2, 2025 | Six Months Ended August 2, 2025 | | :--------------- | :-------------------------------- | :------------------------------ | | Operating lease cost | $5,765 | $11,445 | | Variable operating lease cost | $29 | $94 | | Sublease income | $(216) | $(432) | | Total lease cost | $5,578 | $11,107 | | Future Maturity of Lease Liabilities (as of August 2, 2025) | | :------------------------------------ | | Fiscal 2025: $10,222 thousand | | Fiscal 2026: $22,499 thousand | | Fiscal 2027: $19,400 thousand | | Fiscal 2028: $18,581 thousand | | Fiscal 2029: $17,335 thousand | | Thereafter: $41,711 thousand | | Total operating lease liabilities: $102,821 thousand | [Note 12. Segment Financial Information](index=33&type=section&id=Note%2012.%20Segment%20Financial%20Information) This note identifies Vince Wholesale and Direct-to-consumer segments, providing summary financial information and unallocated corporate expenses - The Company operates two reportable segments: **Vince Wholesale** (distributing to department and specialty stores) and **Vince Direct-to-consumer** (distributing through branded retail stores, outlet stores, and e-commerce)[124](index=124&type=chunk) | (in thousands) | Vince Wholesale (3M Aug 2, 2025) | Vince Direct-to-consumer (3M Aug 2, 2025) | Total (3M Aug 2, 2025) | | :--------------- | :------------------------------- | :---------------------------------------- | :--------------------- | | Net Sales | $44,762 | $28,479 | $73,241 | | Total segment income before income taxes and equity in net income of equity method investment | $17,058 | $211 | $17,269 | | (in thousands) | Vince Wholesale (6M Aug 2, 2025) | Vince Direct-to-consumer (6M Aug 2, 2025) | Total (6M Aug 2, 2025) | | :--------------- | :------------------------------- | :---------------------------------------- | :--------------------- | | Net Sales | $75,052 | $56,122 | $131,174 | | Total segment income (loss) before income taxes and equity in net income of equity method investment | $26,455 | $(589) | $25,866 | - Unallocated corporate expenses include SG&A expenses for corporate activities and other charges not directly attributable to segments, and for the three and six months ended **August 2, 2025**, include an **ERC** benefit of **$7,173 thousand**[123](index=123&type=chunk)[130](index=130&type=chunk) [Note 13. Related Party Transactions](index=36&type=section&id=Note%2013.%20Related%20Party%20Transactions) This note details related party transactions, including agreements with ABG Vince, P180 reimbursements, and past dealings with CaaStle and SK Financial - The Company received cash distributions of **$252 thousand** and **$2,028 thousand** from **ABG Vince** under the Operating Agreement for the three and six months ended **August 2, 2025**, respectively[133](index=133&type=chunk) - Royalty payments to **ABG Vince** under the License Agreement were **$550 thousand** and **$8,463 thousand** for the three and six months ended **August 2, 2025**, respectively, with an annual guaranteed minimum royalty of **$11,000 thousand**[134](index=134&type=chunk)[135](index=135&type=chunk) - **P180** agreed to reimburse the Company for approximately **$599 thousand** in fees and expenses related to the **P180 Acquisition**, recorded as trade receivables[136](index=136&type=chunk) - CaaStle, previously a related party due to its relationship with **P180**, is no longer considered a related party, and the Vince Unfold program and platform services agreement were terminated on **April 24, 2025**[137](index=137&type=chunk)[139](index=139&type=chunk) - SK Financial, an affiliate of Sun Capital and former related party, was involved in the Third Lien Credit Facility, which was significantly reduced and is no longer a related party post-**P180 Acquisition**[140](index=140&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on operating results, financial condition, liquidity, seasonality, and critical accounting estimates [Executive Overview](index=40&type=section&id=Executive%20Overview) This overview describes Vince Holding Corp.'s operations of the Vince brand through wholesale and direct-to-consumer channels - **Vince Holding Corp.** operates the **Vince** brand, a global luxury apparel and accessories business, through wholesale and direct-to-consumer channels[150](index=150&type=chunk)[151](index=151&type=chunk) - Recent strategic transactions include a partnership with **Authentic Brands Group** for **Vince IP** and the acquisition of a majority stake by **P180 Vince Acquisition Co.**[152](index=152&type=chunk)[153](index=153&type=chunk) - The Company previously owned and operated Rebecca Taylor and Parker brands, which have since been wound down and sold[154](index=154&type=chunk)[155](index=155&type=chunk) [Results of Operations](index=40&type=section&id=Results%20of%20Operations) [Three Months Ended August 2, 2025 Compared to Three Months Ended August 3, 2024](index=42&type=section&id=Three%20Months%20Ended%20August%202%2C%202025%20Compared%20to%20Three%20Months%20Ended%20August%203%2C%202024) | (in thousands, except per share data) | August 2, 2025 | August 3, 2024 | Change ($) | Change (%) | | :------------------------------------ | :------------- | :------------- | :--------- | :--------- | | Net sales | $73,241 | $74,169 | $(928) | (1.3)% | | Gross profit | $36,938 | $35,131 | $1,807 | 5.1% | | Gross margin | 50.4% | 47.4% | 3.0 pp | | | Selling, general and administrative expenses | $25,787 | $34,001 | $(8,214) | (24.2)% | | Income from operations | $11,151 | $1,130 | $10,021 | 886.8% | | Interest expense, net | $849 | $1,647 | $(798) | (48.5)% | | Other (income) | $(1,560) | — | $(1,560) | N/A | | Net income | $12,060 | $569 | $11,491 | 2020.0% | | Diluted earnings per share | $0.93 | $0.05 | $0.88 | 1760.0% | - Gross margin rate increased by **3.0 pp**, driven by lower product costing and higher pricing (**340 bps** positive impact) and lower discounting (**210 bps** positive impact), partially offset by higher tariffs (**170 bps** negative impact) and increased freight costs (**100 bps** negative impact)[161](index=161&type=chunk)[163](index=163&type=chunk) - SG&A expenses decreased significantly by **$8,214 thousand**, primarily due to a **$5,613 thousand ERC** benefit recorded as an offset to compensation expense and decreased severance costs[161](index=161&type=chunk) [Performance by Segment (Three Months)](index=43&type=section&id=Performance%20by%20Segment%20(Three%20Months)) | (in thousands) | Vince Wholesale (Aug 2, 2025) | Vince Wholesale (Aug 3, 2024) | Change ($) | Change (%) | | :--------------- | :---------------------------- | :---------------------------- | :--------- | :--------- | | Net sales | $44,762 | $47,184 | $(2,422) | (5.1)% | | Income from operations | $17,058 | $16,663 | $395 | 2.4% | | (in thousands) | Vince Direct-to-consumer (Aug 2, 2025) | Vince Direct-to-consumer (Aug 3, 2024) | Change ($) | Change (%) | | :--------------- | :------------------------------------- | :------------------------------------- | :--------- | :--------- | | Net sales | $28,479 | $26,985 | $1,494 | 5.5% | | Income (loss) from operations | $211 | $(1,398) | $1,609 | N/A | - **Vince Direct-to-consumer** comparable sales, including e-commerce, increased by **$1,950 thousand** or **8.1%**, driven by both e-commerce and retail store volume[174](index=174&type=chunk) - The Company closed three net stores since **August 3, 2024**, bringing the total retail store count to **58** (**44** full-price, **14** outlet) as of **August 2, 2025**[174](index=174&type=chunk) [Six Months Ended August 2, 2025 Compared to Six Months Ended August 3, 2024](index=44&type=section&id=Six%20Months%20Ended%20August%202%2C%202025%20Compared%20to%20Six%20Months%20Ended%20August%203%2C%202024) | (in thousands, except per share data) | August 2, 2025 | August 3, 2024 | Change ($) | Change (%) | | :------------------------------------ | :------------- | :------------- | :--------- | :--------- | | Net sales | $131,174 | $133,340 | $(2,166) | (1.6)% | | Gross profit | $66,101 | $65,044 | $1,057 | 1.6% | | Gross margin | 50.4% | 48.8% | 1.6 pp | | | Gain on sale of subsidiary | — | $(7,634) | $7,634 | N/A | | Selling, general and administrative expenses | $59,388 | $65,944 | $(6,556) | (9.9)% | | Income from operations | $6,713 | $6,734 | $(21) | (0.3)% | | Interest expense, net | $1,705 | $3,293 | $(1,588) | (48.2)% | | Other (income) | $(1,560) | — | $(1,560) | N/A | | Net income | $7,257 | $4,949 | $2,308 | 46.6% | | Diluted earnings per share | $0.56 | $0.39 | $0.17 | 43.6% | - Gross margin rate increased by **1.6 pp**, primarily due to lower product costing and higher pricing (**330 bps** positive impact) and lower discounting (**70 bps** positive impact), partially offset by increased freight costs (**150 bps** negative impact) and higher tariffs (**100 bps** negative impact)[177](index=177&type=chunk)[180](index=180&type=chunk) - SG&A expenses decreased by **$6,556 thousand**, mainly due to a **$5,613 thousand ERC** benefit and decreased severance costs, partially offset by increased legal expenses[178](index=178&type=chunk) - Equity in net income (loss) of equity method investment improved from a loss of **$173 thousand** to an income of **$747 thousand**, related to the **25%** interest in **ABG Vince**[184](index=184&type=chunk) [Performance by Segment (Six Months)](index=46&type=section&id=Performance%20by%20Segment%20(Six%20Months)) | (in thousands) | Vince Wholesale (Aug 2, 2025) | Vince Wholesale (Aug 3, 2024) | Change ($) | Change (%) | | :--------------- | :---------------------------- | :---------------------------- | :--------- | :--------- | | Net sales | $75,052 | $77,441 | $(2,389) | (3.1)% | | Income from operations | $26,455 | $26,847 | $(392) | (1.5)% | | (in thousands) | Vince Direct-to-consumer (Aug 2, 2025) | Vince Direct-to-consumer (Aug 3, 2024) | Change ($) | Change (%) | | :--------------- | :------------------------------------- | :------------------------------------- | :--------- | :--------- | | Net sales | $56,122 | $55,899 | $223 | 0.4% | | Loss from operations | $(589) | $(1,462) | $873 | N/A | - **Vince Direct-to-consumer** comparable sales, including e-commerce, increased by **$2,650 thousand** or **5.5%**, due to increased volume in both e-commerce and retail stores[190](index=190&type=chunk) - The **Vince Direct-to-consumer** segment reduced its operating loss from **$1,462 thousand** to **$589 thousand**, primarily due to improved gross margin[191](index=191&type=chunk) [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) - The Company's liquidity sources include cash, cash flows from operations, borrowings under the **2023 Revolving Credit Facility**, and access to capital markets[192](index=192&type=chunk) - Primary cash needs are for working capital, royalty payments, debt service, and capital expenditures for new stores and leasehold improvements[192](index=192&type=chunk) | (in thousands) | Six Months Ended August 2, 2025 | Six Months Ended August 3, 2024 | | :--------------- | :------------------------------ | :------------------------------ | | Net cash used in operating activities | $(7,615) | $(7,072) | | Net cash used in investing activities | $(3,530) | $(1,421) | | Net cash provided by financing activities | $11,319 | $8,081 | - Net cash used in operating activities for the six months ended **August 2, 2025**, was **$7,615 thousand**, primarily due to a **$17,521 thousand** increase in inventories[195](index=195&type=chunk) - The **2023 Revolving Credit Facility** provides up to **$85,000 thousand**, with **$42,607 thousand** available as of **August 2, 2025**, and **$22,862 thousand** outstanding[202](index=202&type=chunk)[210](index=210&type=chunk) - The Third Lien Credit Facility was reduced by approximately **$27,000 thousand** through the Sun Debt Paydown and **P180** Debt Forgiveness, with **$7,500 thousand** remaining outstanding[220](index=220&type=chunk) [Seasonality](index=54&type=section&id=Seasonality) - The apparel and fashion industry is cyclical, with revenues affected by general economic conditions, consumer spending, and seasonal trends[222](index=222&type=chunk) - Fluctuations in quarterly sales are influenced by the timing of seasonal wholesale shipments and direct-to-consumer sales, indicating that quarterly results may not predict annual performance[222](index=222&type=chunk) [Critical Accounting Estimates](index=54&type=section&id=Critical%20Accounting%20Estimates) - Management's discussion relies on condensed consolidated financial statements prepared using critical accounting policies that require judgments and estimates[223](index=223&type=chunk) - No material changes to critical accounting estimates have occurred as of **August 2, 2025**, from those disclosed in the **2024** Annual Report on Form **10-K**[224](index=224&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a 'smaller reporting company,' Vince Holding Corp. is exempt from providing quantitative and qualitative market risk disclosures - The Company is exempt from providing quantitative and qualitative disclosures about market risk due to its status as a '**smaller reporting company**' under the Securities Exchange Act of **1934**[225](index=225&type=chunk) [Item 4. Controls and Procedures](index=56&type=section&id=Item%204.%20Controls%20and%20Procedures) This section addresses disclosure controls and internal control over financial reporting, noting a material weakness in user access controls and ongoing remediation [Evaluation of Disclosure Controls and Procedures](index=56&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management, with CEO and CFO participation, concluded that disclosure controls and procedures were not effective as of **August 2, 2025**, due to an identified material weakness[228](index=228&type=chunk) - Despite the material weakness, management believes the condensed consolidated financial statements fairly state the Company's financial condition, results of operations, and cash flows due to additional analysis and substantive testing[229](index=229&type=chunk) [Material Weakness in Internal Control over Financial Reporting](index=56&type=section&id=Material%20Weakness%20in%20Internal%20Control%20over%20Financial%20Reporting) - A material weakness was identified in internal control over financial reporting due to inadequate user access controls, which failed to ensure appropriate segregation of duties and restrict access to financial applications and data[230](index=230&type=chunk) - This material weakness did not result in a material misstatement to the financial statements but could impact the effectiveness of **IT**-dependent controls[231](index=231&type=chunk) [Remediation Efforts to Address the Material Weakness](index=56&type=section&id=Remediation%20Efforts%20to%20Address%20the%20Material%20Weakness) - Remediation efforts include modifying system access rights to limit generic **IDs**, implementing a full recertification of **AX** user access rights, and improving operational processes for user provisioning and de-provisioning[232](index=232&type=chunk) - The Company continues to follow a comprehensive remediation plan, including routine reviews of user system access and timely removal of access rights upon termination[233](index=233&type=chunk) [Limitations on the Effectiveness of Disclosure Controls and Procedures](index=56&type=section&id=Limitations%20on%20the%20Effectiveness%20of%20Disclosure%20Controls%20and%20Procedures) - Control systems provide only reasonable, not absolute, assurance that objectives are met due to inherent limitations[235](index=235&type=chunk) - Projections of effectiveness to future periods are subject to risks that controls may become inadequate or compliance may deteriorate[237](index=237&type=chunk) [Changes in Internal Control over Financial Reporting](index=58&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - There were no changes in internal control over financial reporting during the fiscal quarter ended **August 2, 2025**, that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[238](index=238&type=chunk) [PART II. OTHER INFORMATION](index=58&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=58&type=section&id=Item%201.%20Legal%20Proceedings) The Company is involved in ordinary course legal proceedings, which management believes will not materially impact its financial position or results - The Company is a party to legal proceedings, compliance matters, environmental, wage and hour, and other labor claims in the ordinary course of business[239](index=239&type=chunk) - Management believes the ultimate outcome of these items will not have a material adverse impact on the Company's financial position, results of operations, or cash flows[239](index=239&type=chunk) [Item 1A. Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) This section highlights unchanged risk factors from the **2024** Annual Report, focusing on the risk of not maintaining **NYSE** listing due to non-compliance - The Company's risk factors have not materially changed from those disclosed in its **2024** Annual Report on Form **10-K**[240](index=240&type=chunk) - A significant risk is the potential inability to maintain the listing of its common stock on the **NYSE**, as the Company received a notice of non-compliance with the **$50,000 thousand** market capitalization or stockholders' equity requirement[241](index=241&type=chunk)[242](index=242&type=chunk) - The **NYSE** accepted the Company's business plan, granting it until **November 6, 2026**, to regain compliance, but there is no assurance this will be achieved[244](index=244&type=chunk)[245](index=245&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item confirms no unregistered sales of equity securities or use of proceeds occurred during the reporting period - No unregistered sales of equity securities or use of proceeds occurred during the reporting period[248](index=248&type=chunk) [Item 3. Defaults Upon Senior Securities](index=60&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item indicates that there were no defaults upon senior securities to report - No defaults upon senior securities were reported[249](index=249&type=chunk) [Item 4. Mine Safety Disclosures](index=60&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Mine Safety Disclosures are not applicable to the Company[250](index=250&type=chunk) [Item 5. Other Information](index=60&type=section&id=Item%205.%20Other%20Information) This item confirms no directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No directors or officers adopted, modified, or terminated a **Rule 10b5-1** trading arrangement or a non-**Rule 10b5-1** trading arrangement during the quarter ended **August 2, 2025**[251](index=251&type=chunk) [Item 6. Exhibits](index=60&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including CEO/CFO certifications and Inline XBRL data - The report includes CEO and CFO Certifications pursuant to Section **302** and Section **906** of the Sarbanes-Oxley Act of **2002**[252](index=252&type=chunk) - Inline **XBRL** Instance, Taxonomy Extension Schema, Calculation, Presentation, and Definition files are provided as exhibits[252](index=252&type=chunk)

Group 1 - Vince Holding Corp. is scheduled to participate in a fireside chat at the Sidoti Small Cap Conference [1] - The event will be held virtually on September 17, 2025, at 10:45 AM Eastern Time [1] - The presentation will be webcast live and accessible online [1]

Core Viewpoint - Vince Holding Corp. experienced a significant increase in stock price following the release of better-than-expected second-quarter results, indicating strong market confidence in the company's performance [1]. Financial Performance - Vince reported quarterly earnings of 38 cents per share, surpassing analyst expectations of a loss of 10 cents [2]. - Quarterly revenue reached $73.24 million, exceeding the Street estimate of $72.88 million [2]. - Gross profit was $36.9 million, representing 50.4% of net sales, an increase from 47.4% the previous year, attributed to lower product costs, higher pricing, and reduced discounting [3]. Business Insights - CEO Brendan Hoffman highlighted that the second-quarter performance was a result of "disciplined execution and strong customer reception" during an extended full-price selling season [3]. - A significant one-time payroll tax credit (ERC benefit) of $7.2 million contributed to the earnings beat, although there was a slight decline in revenue [4]. - The underlying business showed strength with expanded gross margins due to better pricing and lower costs, alongside a recovery in the direct-to-consumer (DTC) segment [5]. Market Reaction - Vince's stock surged by 106.6% to $3.43 on heavy trading volume, with over 60 million shares traded compared to an average of less than 54,000 shares over the past 100 days [6].

分组1 - Vince Holding Corp. reported quarterly earnings of $0.38 per share, exceeding the Zacks Consensus Estimate of a loss of $0.08 per share, and compared to earnings of $0.05 per share a year ago, representing an earnings surprise of +575.00% [1] - The company posted revenues of $73.24 million for the quarter ended July 2025, surpassing the Zacks Consensus Estimate by 0.50%, although this is a decrease from year-ago revenues of $74.17 million [2] - Vince Holding has surpassed consensus EPS estimates three times over the last four quarters and topped consensus revenue estimates two times during the same period [2] 分组2 - Vince Holding shares have declined approximately 58.8% since the beginning of the year, contrasting with the S&P 500's gain of 10.7% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.10 on revenues of $80.93 million, and for the current fiscal year, it is -$0.42 on revenues of $293.26 million [7] 分组3 - The Zacks Industry Rank indicates that the Textile - Apparel industry is currently in the bottom 24% of over 250 Zacks industries, suggesting that the outlook for the industry can significantly impact stock performance [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

Financial Data and Key Metrics Changes - Total company net sales for Q2 decreased by 1.3% to $73.2 million compared to $74.2 million in Q2 of fiscal 2024 [10] - Gross profit for Q2 was $36.9 million, representing 50.4% of net sales, an increase from $35.1 million or 47.4% of net sales in the same period last year [11] - Net income for Q2 was $12.1 million, or $0.93 per share, compared to $0.6 million, or $0.05 per share in Q2 of the previous year [15] - Adjusted EBITDA for Q2 was $6.7 million, up from $2.7 million in the prior year [15] Business Line Data and Key Metrics Changes - Direct-to-consumer (DTC) segment increased by 5.5%, with both e-commerce and store channels contributing to growth [10] - Wholesale segment saw a decline of 5.1% due to delays in shipments caused by tariff mitigation strategies [10] Market Data and Key Metrics Changes - The company successfully elongated its full-price selling season from spring, which positively impacted gross margin performance [5] - The men's business showed solid performance, particularly in knits and bottoms, while women's wovens and knits also performed well [6] Company Strategy and Development Direction - The company is focused on reinvesting in the business, particularly in top-of-funnel marketing, after successfully navigating tariff challenges [8] - Plans to open new stores in strategic locations, such as Nashville and Sacramento, to enhance geographic coverage and support e-commerce [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic positioning despite a dynamic environment, emphasizing strong fundamentals and growth trajectory [9] - The company anticipates net sales for Q3 to be flat to up low single digits compared to the prior year, with cautious consumer sentiment expected [17] Other Important Information - The company has reduced its long-term debt balance to $31.1 million, down from $54.4 million in the prior year [14] - Inventory at the end of Q2 was $76.7 million, an increase from $66.3 million in the same period last year, driven by higher inventory carrying value due to tariffs [15][16] Q&A Session Summary Question: How will the company maximize collection flow next year based on Q2 learnings? - Management noted the need to analyze the benefits of stretching out the spring selling season and will make decisions based on longer-term data [22][23] Question: What is the company's strategy for maintaining wholesale quality and share? - Management highlighted their nimbleness and strong team continuity as competitive advantages in maintaining quality and responding to market changes [24][25] Question: How does the company view price elasticity among its customer base? - Management stated that they carefully evaluate price changes on a style-by-style basis, ensuring value remains intact for both affluent and aspirational customers [25][27] Question: What is the current percentage of products sourced from China? - Management indicated progress in reducing exposure to China, targeting a cap of 25% for any one country, with expectations to achieve this by the holiday season [34][35] Question: What are the trends in freight costs and shipping delays? - Management explained that delays were intentional to manage inventory flow and that freight costs are not expected to see significant increases in the back half of the year [37][40] Question: How many store locations were open in Q2 compared to last year? - Management confirmed there were 40 full-price stores and 14 outlets last year, with new openings planned for Nashville and Sacramento [41][43]

Financial Data and Key Metrics Changes - Total company net sales for Q2 decreased 1.3% to $73.2 million compared to $74.2 million in Q2 of fiscal 2024 [10] - Gross profit was $36.9 million, or 50.4% of net sales, compared to $35.1 million, or 47.4% of net sales in the same period last year [11] - Net income for Q2 was $12.1 million, or income per share of $0.93, compared to net income of $0.6 million, or income per share of $0.05 in Q2 of last year [15] Business Line Data and Key Metrics Changes - Direct-to-consumer segment increased 5.5%, with both e-commerce and store channels contributing to growth [10] - Wholesale segment declined by 5.1% due to delays in shipments caused by tariff mitigation strategies [10] Market Data and Key Metrics Changes - The company experienced strong performance in women's wovens and knits, as well as in the buy-now, wear-now bottoms category [5] - Men's business showed solid results, particularly in knits and bottoms assortments [6] Company Strategy and Development Direction - The company is focused on mitigating tariff impacts and has successfully reduced the estimated impact from incremental tariffs by approximately 50% for the second half of the year [7] - Plans to reinvest in the business include restoring top-of-funnel marketing dollars and exploring longer-term growth opportunities [8] Management's Comments on Operating Environment and Future Outlook - Management remains cautiously optimistic about the growth trajectory, despite the dynamic environment and ongoing tariff pressures [9] - The company anticipates net sales for Q3 to be approximately flat to up low single digits compared to the prior year period [16] Other Important Information - The company’s long-term debt balance was $31.1 million, a reduction of $23.3 million compared to the prior year [14] - Net inventory increased to $76.7 million, driven by higher inventory carrying value due to tariffs [15] Q&A Session Summary Question: How will the company flow its collections next year based on Q2 learnings? - Management indicated that they will analyze the benefits of stretching out spring collections and make decisions based on longer-term data [22][23] Question: What is the company's strategy for maintaining wholesale quality and share? - Management emphasized their nimbleness and ability to respond quickly as a competitive advantage, allowing them to maintain quality and potentially gain market share [24][25] Question: How does the company view price elasticity among its customer base? - Management stated that they carefully evaluate price changes on a style-by-style basis, ensuring that value remains at the new price points [26][27] Question: What impact have tariff issues had on new categories or accessories? - Management noted that licensing partners are also navigating similar challenges, and the company is focused on ensuring that price changes make sense for consumers [28][30] Question: What percentage of products are currently sourced from China? - Management reported that they are targeting a cap of 25% for sourcing from any one country and are progressing well in reducing exposure to China [34][35] Question: What are the trends in freight costs for the back half of the year? - Management indicated that they do not foresee a significant uptick in overall freight costs and expect normalization as they manage inventory around the holiday season [38][40] Question: How many store locations were open in the quarter compared to last year? - Management confirmed that they opened a Nashville location and have a Sacramento location slated for October, with no additional openings planned for the remainder of the year [41][42]

Financial Data and Key Metrics Changes - Total company net sales for Q2 2025 decreased by 1.3% to $73.2 million compared to $74.2 million in Q2 2024 [10] - Gross profit for Q2 was $36.9 million, representing 50.4% of net sales, an increase from 47.4% in the same period last year [11] - Net income for Q2 was $12.1 million, or $0.93 per share, compared to $0.6 million, or $0.05 per share in Q2 2024 [15] - Adjusted EBITDA for Q2 was $6.7 million, up from $2.7 million in the prior year [15] Business Line Data and Key Metrics Changes - Direct-to-consumer segment increased by 5.5%, while wholesale segment declined by 5.1% due to delays in shipments [10] - The men's business showed solid performance, particularly in knits and bottoms [6] - Women's wovens and knits also performed strongly, contributing to overall growth [5] Market Data and Key Metrics Changes - The company experienced strong momentum in its contemporary market positioning, particularly at key partners like Nordstrom [5] - The newly opened Marylebone store exceeded expectations, indicating positive market reception [6] Company Strategy and Development Direction - The company is focused on mitigating tariff impacts and has successfully reduced estimated incremental tariff costs by approximately 50% for the second half of the year [7] - Plans to reinvest in the business include restoring top-of-funnel marketing dollars and exploring long-term growth opportunities [8] - The company aims to diversify sourcing to reduce exposure to any single country, targeting a cap of 25% for sourcing from any one country [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic positioning despite a dynamic environment, emphasizing strong underlying fundamentals [9] - The outlook for Q3 anticipates net sales to be flat to up low single digits compared to the prior year, with cautious consumer sentiment expected [16] Other Important Information - SG&A expenses decreased to $25.8 million, or 35.2% of net sales, down from 45.8% in the prior year [11] - The company’s long-term debt was reduced to $31.1 million, down from $54.4 million in the prior year [13] Q&A Session Summary Question: How will the company maximize collection flow next year based on Q2 learnings? - Management acknowledged the need to analyze the benefits of stretching out the spring selling season and will make decisions based on longer-term data [21] Question: What is the company's strategy for maintaining wholesale quality and share? - Management highlighted their nimbleness and strong team continuity as competitive advantages, allowing them to respond quickly to market changes [23] Question: How does the company view price elasticity among its customer base? - Management stated that they carefully evaluate price changes on a style-by-style basis, ensuring value remains at the new price points [25] Question: What percentage of products are currently sourced from China? - Management reported significant progress in reducing reliance on China, targeting a cap of 25% for sourcing from any one country [33] Question: What are the trends in freight costs for the back half of the year? - Management indicated that while freight costs impacted gross margin in Q2, they do not foresee significant increases in overall freight costs moving forward [37] Question: How many store openings are planned for the remainder of the year? - Management confirmed the opening of the Nashville location and the upcoming Sacramento store, with no additional openings scheduled for the year [38]

Second Quarter Fiscal Year 2025 Performance Overview [Performance Highlights](index=1&type=section&id=Highlights) Vince Holding Corp. reported second quarter fiscal year 2025 net sales of **$73.2 million**, net income of **$12.1 million**, adjusted net income of **$4.9 million**, and significantly increased adjusted EBITDA to **$6.7 million** | Metric | Amount (USD million) | Change vs. Q2 FY2024 | | :------------------- | :------------------- | :------------------- | | Net Sales | 73.2 | -1.3% | | Net Income | 12.1 | | | Adjusted Net Income | 4.9 | | | Adjusted EBITDA | 6.7 | Increased 4.0 | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Brendan Hoffman expressed satisfaction with the second quarter results, emphasizing disciplined execution, strong product reception, and plans for reinvestment to capture growth opportunities - The company is very proud of its second quarter results, reflecting disciplined execution and strong customer reception to its product offerings, particularly in extending the full-price selling season[2](index=2&type=chunk) - The company prioritizes maintaining product quality and customer loyalty while navigating current challenges[2](index=2&type=chunk) - Given the strength of underlying trends, the company is pleased to begin reinvesting in the business and focusing on growth opportunities for the Vince brand and the Vince Holding Corp. platform[2](index=2&type=chunk) [Key Financial Performance](index=1&type=section&id=Key%20Financial%20Performance) Total net sales slightly decreased in Q2 FY2025, but gross margin significantly improved, and operating income substantially grew, driven by lower product costs, higher pricing, and ERC benefits [Net Sales and Operating Results by Segment](index=1&type=section&id=Net%20Sales%20and%20Operating%20Results%20by%20Segment) Total net sales decreased by 1.3% to **$73.2 million**, with wholesale sales down 5.1% due to shipping timing, while direct-to-consumer sales grew 5.5%, leading to operating income increasing to **$11.2 million** Q2 FY2025 Net Sales and Operating Income by Segment | Metric (USD thousand) | August 2, 2025 | August 3, 2024 | Y-o-Y Change | | :------------------------- | :------------- | :------------- | :----------- | | **Net Sales:** | | | | | Vince Wholesale | 44,762 | 47,184 | -5.1% | | Vince Direct-to-Consumer | 28,479 | 26,985 | +5.5% | | **Total Net Sales** | **73,241** | **74,169** | **-1.3%** | | **Operating Income (Loss):** | | | | | Vince Wholesale | 17,058 | 16,663 | +2.4% | | Vince Direct-to-Consumer | 211 | (1,398) | Swung to Profit | | **Total Segment Operating Income** | **17,269** | **15,265** | **+13.1%** | | Unallocated Corporate Expenses | (6,118) | (14,135) | | | **Total Operating Income** | **11,151** | **1,130** | **+886.8%** | - Wholesale segment sales decreased by **5.1%**, primarily due to earlier fall shipments compared to the prior year, influenced by tariff policy uncertainties[3](index=3&type=chunk) [Gross Profit and Selling, General and Administrative Expenses](index=1&type=section&id=Gross%20Profit%20and%20SG%26A) Gross profit increased to **$36.9 million** with a **50.4%** margin, driven by lower product costs and higher pricing, while SG&A expenses significantly decreased to **$25.8 million** due to a **$7.2 million** ERC benefit Q2 FY2025 Gross Profit and SG&A | Metric (USD million) | Q2 FY2025 | Q2 FY2024 | Y-o-Y Change | | :------------------- | :-------- | :-------- | :----------- | | Gross Profit | 36.9 | 35.1 | +5.1% | | Gross Margin | 50.4% | 47.4% | +300 bps | | SG&A Expenses | 25.8 | 34.0 | -24.1% | | SG&A as % of Sales | 35.2% | 45.8% | -1060 bps | - The increase in gross margin was primarily driven by a favorable impact of approximately **340 basis points** from lower product costs and higher pricing, and approximately **210 basis points** from reduced discounts, partially offset by increased tariffs (approximately **170 basis points**) and higher freight costs (approximately **100 basis points**)[3](index=3&type=chunk) - The decrease in SG&A expenses was primarily due to the receipt of approximately **$7.2 million** in payroll tax credits from the U.S. Treasury under the Employee Retention Credit program, with **$5.6 million** recorded as a reduction in compensation expense and **$1.6 million** in interest payments recorded as other income[3](index=3&type=chunk) [Net Income and Earnings Per Share](index=2&type=section&id=Net%20Income%20and%20EPS) Net income for the quarter was **$12.1 million**, with diluted EPS of **$0.93**, significantly up from the prior year, and adjusted net income was **$4.9 million**, or **$0.38** per diluted share, excluding ERC benefits Q2 FY2025 Net Income and EPS | Metric | Q2 FY2025 | Q2 FY2024 | | :------------------------- | :-------- | :-------- | | Net Income (USD million) | 12.1 | 0.6 | | Diluted EPS | 0.93 | 0.05 | | Adjusted Net Income (USD million) | 4.9 | | | Adjusted Diluted EPS | 0.38 | | [Adjusted EBITDA](index=2&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA for the second quarter of fiscal year 2025 significantly increased to **$6.7 million** from **$2.7 million** in the prior year Q2 FY2025 Adjusted EBITDA | Metric (USD million) | Q2 FY2025 | Q2 FY2024 | | :------------------- | :-------- | :-------- | | Adjusted EBITDA | 6.7 | 2.7 | Financial Position [Balance Sheet](index=3&type=section&id=Balance%20Sheet) As of the end of Q2 FY2025, total borrowings were **$31.1 million**, with an additional **$42.6 million** available under the revolving credit facility Key Balance Sheet Data as of Q2 FY2025 End | Metric (USD million) | August 2, 2025 | | :------------------------------- | :------------- | | Total Borrowings | 31.1 | | Revolving Credit Facility Availability | 42.6 | [Inventory](index=3&type=section&id=Inventory) Net inventory increased to **$76.7 million** at the end of Q2 FY2025 from **$66.3 million** in the prior year, primarily due to higher tariff-related book value and strategic early shipments Net Inventory Comparison | Metric (USD million) | Q2 FY2025 End | Q2 FY2024 End | Y-o-Y Change | | :------------------- | :------------ | :------------ | :----------- | | Net Inventory | 76.7 | 66.3 | +15.7% | - Inventory increased by approximately **$5.2 million** year-over-year, primarily due to higher tariff-related book value and the company's strategic early shipments in anticipation of the reciprocal tariff expiration[7](index=7&type=chunk) [Debt and Liquidity](index=3&type=section&id=Debt%20and%20Liquidity) The company reported total borrowings of **$31.1 million** and **$42.6 million** available under its revolving credit facility at the end of Q2 FY2025, indicating a healthy liquidity position Debt and Liquidity Status | Metric (USD million) | Q2 FY2025 End | | :------------------------------- | :------------ | | Total Borrowings under Debt Agreements | 31.1 | | Revolving Credit Facility Availability | 42.6 | - The company still has shares available under its ATM program, with proceeds to be used to fund future growth along with operating cash flow[8](index=8&type=chunk) Business Outlook and Strategic Initiatives [Third Quarter Fiscal Year 2025 Outlook](index=3&type=section&id=Third%20Quarter%20Fiscal%202025%20Outlook) The company projects Q3 FY2025 net sales to be flat to up 3%, adjusted operating income as a percentage of net sales between 1% and 4%, and adjusted EBITDA as a percentage of net sales between 2% and 5%, while anticipating **$4-5 million** in incremental tariff costs Q3 FY2025 Performance Guidance | Metric | Expectation | | :--------------------------------- | :--------------------------- | | Net Sales | Approximately Flat to Up 3% | | Adjusted Operating Income as % of Net Sales | Approximately 1% to 4% | | Adjusted EBITDA as % of Net Sales | Approximately 2% to 5% | - The company expects to incur **$4 million to $5 million** in incremental tariff costs and anticipates offsetting approximately **50%** of this impact through changes in country of origin, vendor negotiations, and selective strategic price increases[9](index=9&type=chunk) - Given the uncertainty regarding the potential impact and duration of current tariff policies, the company is not providing full fiscal year 2025 guidance[9](index=9&type=chunk) [Strategic Partnership with Authentic Brands Group](index=3&type=section&id=Strategic%20Partnership%20with%20Authentic%20Brands%20Group) The company completed a transaction with Authentic Brands Group on May 25, 2023, establishing an exclusive, long-term licensing agreement for the Vince brand's intellectual property across its existing business channels - The company completed its transaction with Authentic Brands Group (Authentic) on May 25, 2023[10](index=10&type=chunk) - Vince Holding Corp. entered into an exclusive, long-term license agreement with Authentic, allowing it to use the contributed intellectual property in its existing wholesale, retail, and e-commerce businesses in a manner consistent with its current operations[11](index=11&type=chunk) - The license agreement includes an initial ten-year term and eight ten-year renewal options[11](index=11&type=chunk) Supplemental Information [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) The company presents non-GAAP financial measures like adjusted EBITDA, adjusted operating income, and adjusted net income to better reflect ongoing operational performance by excluding specific non-recurring items - Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation and amortization, stock-based compensation, capitalized cloud computing amortization, ERC benefits, and gain on sale of Rebecca Taylor, Inc. and its wholly-owned subsidiaries[12](index=12&type=chunk)[13](index=13&type=chunk) - The company believes the presentation of these non-GAAP measures helps in understanding its ongoing operating performance, unaffected by the aforementioned items, which are excluded to enhance comparability of earnings across periods, despite their periodic occurrence[14](index=14&type=chunk) - Non-GAAP financial measures should not be considered in isolation or as a substitute for financial information prepared in accordance with GAAP[14](index=14&type=chunk) [Conference Call Details](index=4&type=section&id=Conference%20Call%20Details) Vince Holding Corp. will host a conference call on September 10, 2025, at 4:30 PM ET to discuss its second quarter results, accessible via phone or webcast - The conference call will be held on September 10, 2025, at 4:30 PM ET to discuss first quarter results[15](index=15&type=chunk) - Participants can join the conference call by dialing **(833) 470-1428**, conference ID **030527**[16](index=16&type=chunk) - Interested parties may also access the webcast through the company's investor website at http://investors.vince.com/[16](index=16&type=chunk) [About Vince Holding Corp.](index=4&type=section&id=About%20Vince%20Holding%20Corp.) Vince Holding Corp. is a global retail company operating the Vince brand, known for its sophisticated everyday style, through a network of full-price stores, outlets, e-commerce, and premium wholesale channels - Vince Holding Corp. is a global retail company that operates the Vince brand of women's and men's ready-to-wear businesses[17](index=17&type=chunk) - The Vince brand, established in 2002, is known for its sophisticated yet understated everyday style and is a leading global luxury apparel and accessories brand[17](index=17&type=chunk) - The company operates 45 full-price retail stores, 14 outlet stores, its e-commerce website, and through global premium wholesale channels[17](index=17&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This document contains forward-looking statements under the Private Securities Litigation Reform Act of 1995, outlining expectations for future operating results, which are subject to various risks and uncertainties - Forward-looking statements include current expectations regarding the company's future operating results and are indicated by words or phrases such as "may," "will," "should," "believe," "expect," and similar expressions[18](index=18&type=chunk) - These forward-looking statements are not guarantees of actual results, and actual results may differ materially from those implied in the forward-looking statements[18](index=18&type=chunk) - Risks and uncertainties include, but are not limited to: changes in trade policies and tariffs, maintaining sufficient operating cash flow or revolving credit facility availability, general economic conditions, ability to improve profitability, ability to maintain key wholesale partners, ability to accurately predict customer demand, maintaining the license agreement with ABG Vince, ABG Vince's expansion of the Vince brand, ability to make lease payments, retail store operations, international market experience, remediation of material weaknesses in internal control, compliance with laws and regulations, sustainability scrutiny, industry competition, attracting and retaining key personnel, seasonal fluctuations, intellectual property protection, liquidation of the Rebecca Taylor business, overseas sourcing, reliance on independent manufacturers, distribution facility operations, raw material price fluctuations, cybersecurity issues, information technology system improvements, privacy-related obligations, and NYSE listing compliance[18](index=18&type=chunk)[19](index=19&type=chunk) [Investor Relations Contact](index=6&type=section&id=Investor%20Relations%20Contact) Investors can direct inquiries to Caitlin Churchill at ICR, Inc. for investor relations assistance - Investor Relations Contact: Caitlin Churchill, ICR, Inc., **646-277-1274**, Caitlin.Churchill@icrinc.com[20](index=20&type=chunk) Exhibits: Financial Statements and Reconciliations [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents Vince Holding Corp.'s unaudited condensed consolidated statements of operations for the three and six-month periods ended August 2, 2025, and August 3, 2024 Condensed Consolidated Statements of Operations (Unaudited, USD thousand) | Metric | Three Months Ended August 2, 2025 | Three Months Ended August 3, 2024 | Six Months Ended August 2, 2025 | Six Months Ended August 3, 2024 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | :------------------------------ | :------------------------------ | | Net Sales | 73,241 | 74,169 | 131,174 | 133,340 | | Cost of Sales | 36,303 | 39,038 | 65,073 | 68,296 | | Gross Profit | 36,938 | 35,131 | 66,101 | 65,044 | | Gross Profit as % of Net Sales | 50.4% | 47.4% | 50.4% | 48.8% | | Gain on Sale of Subsidiary | — | — | — | (7,634) | | Selling, General and Administrative Expenses | 25,787 | 34,001 | 59,388 | 65,944 | | Selling, General and Administrative Expenses as % of Net Sales | 35.2% | 45.8% | 45.3% | 49.5% | | Operating Income | 11,151 | 1,130 | 6,713 | 6,734 | | Operating Income as % of Net Sales | 15.2% | 1.5% | 5.1% | 5.1% | | Interest Expense, Net | 849 | 1,647 | 1,705 | 3,293 | | Other (Income) | (1,560) | — | (1,560) | — | | Income (Loss) Before Income Taxes and Equity Method Investment Net Income (Loss) | 11,862 | (517) | 6,568 | 3,441 | | Income Tax Provision (Benefit) | 58 | (794) | 58 | (1,681) | | Income (Loss) Before Equity Method Investment Net Income (Loss) | 11,804 | 277 | 6,510 | 5,122 | | Equity Method Investment Net Income (Loss) | 256 | 292 | 747 | (173) | | Net Income | 12,060 | 569 | 7,257 | 4,949 | | Earnings Per Share: | | | | | | Basic EPS | 0.93 | 0.05 | 0.56 | 0.39 | | Diluted EPS | 0.93 | 0.05 | 0.56 | 0.39 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents Vince Holding Corp.'s unaudited condensed consolidated balance sheets, detailing assets, liabilities, and stockholders' equity as of August 2, 2025, February 1, 2025, and August 3, 2024 Condensed Consolidated Balance Sheets (Unaudited, USD thousand) | Metric | August 2, 2025 | February 1, 2025 | August 3, 2024 | | :------------------------------------ | :------------- | :--------------- | :------------- | | **ASSETS** | | | | | Cash and Cash Equivalents | 777 | 607 | 711 | | Trade Accounts Receivable, Net | 29,405 | 32,927 | 35,054 | | Inventory, Net | 76,705 | 59,146 | 66,343 | | Prepaid Expenses and Other Current Assets | 5,184 | 3,896 | 6,564 | | **Total Current Assets** | **112,071** | **96,576** | **108,672** | | Property and Equipment, Net | 8,416 | 7,378 | 6,298 | | Operating Lease Right-of-Use Assets | 92,265 | 91,209 | 79,659 | | Goodwill | — | — | 31,973 | | Equity Method Investment | 22,183 | 23,464 | 24,727 | | Other Assets | 4,037 | 4,108 | 2,294 | | **Total Assets** | **238,972** | **222,735** | **253,623** | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | | Accounts Payable | 35,882 | 35,090 | 36,736 | | Accrued Payroll and Employee Benefits | 8,342 | 8,709 | 6,442 | | Other Accrued Expenses | 10,443 | 13,722 | 9,545 | | Current Operating Lease Liabilities | 15,069 | 16,025 | 14,787 | | **Total Current Liabilities** | **69,736** | **73,546** | **67,510** | | Long-Term Debt | 31,096 | 19,156 | 54,401 | | Long-Term Operating Lease Liabilities | 87,752 | 87,180 | 75,704 | | Deferred Income Tax Liabilities and Other Liabilities | 1,093 | 1,094 | 3,567 | | Stockholders' Equity | 49,295 | 41,759 | 52,441 | | **Total Liabilities and Stockholders' Equity** | **238,972** | **222,735** | **253,623** | [Reconciliation of GAAP to Non-GAAP Measures](index=9&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section provides reconciliations of GAAP to non-GAAP financial measures, detailing adjustments for Employee Retention Credit (ERC) benefits and gain on sale of subsidiary for Q2 and six-month periods of FY2025 and FY2024 [Income from Operations, Net Income, and EPS Reconciliation](index=9&type=section&id=Income%20from%20Operations%2C%20Net%20Income%2C%20and%20EPS%20Reconciliation) This reconciliation details how GAAP operating income, net income, and diluted EPS are adjusted to non-GAAP metrics for Q2 and six-month periods of FY2025 and FY2024, by accounting for ERC benefits and gain on sale of subsidiary Q2 FY2025 GAAP to Non-GAAP Reconciliation (USD thousand, except per share amounts) | Metric | Reported (GAAP) | ERC Benefit | Discrete Tax Effect Related to ERC Benefit | Adjusted (Non-GAAP) | | :------------------------------------------------ | :-------------- | :---------- | :----------------------------------------- | :------------------ | | Operating Income | 11,151 | 5,613 | — | 5,538 | | Income Before Income Taxes and Equity Method Investment Net Income | 11,862 | 7,173 | — | 4,689 | | Net Income | 12,060 | 7,173 | (58) | 4,945 | | Diluted EPS | 0.93 | 0.55 | — | 0.38 | Six Months FY2025 GAAP to Non-GAAP Reconciliation (USD thousand, except per share amounts) | Metric | Reported (GAAP) | ERC Benefit | Discrete Tax Effect Related to ERC Benefit | Adjusted (Non-GAAP) | | :------------------------------------------------ | :-------------- | :---------- | :----------------------------------------- | :------------------ | | Operating Income | 6,713 | 5,613 | — | 1,100 | | Income (Loss) Before Income Taxes and Equity Method Investment Net Income (Loss) | 6,568 | 7,173 | — | (605) | | Net Income | 7,257 | 7,173 | (58) | 142 | | Diluted EPS | 0.56 | 0.55 | — | 0.01 | Q2 and Six Months FY2024 GAAP to Non-GAAP Reconciliation (USD thousand, except per share amounts) | Metric | Reported (GAAP) | Gain on Sale of Subsidiary | Adjusted (Non-GAAP) | | :------------------------------------------------ | :-------------- | :------------------------- | :------------------ | | **Three Months** | | | | | Operating Income | 1,130 | — | 1,130 | | Net Income | 569 | — | 569 | | Diluted EPS | 0.05 | — | 0.05 | | **Six Months** | | | | | Operating Income (Loss) | 6,734 | 7,634 | (900) | | Net Income (Loss) | 4,949 | 7,634 | (2,685) | | Diluted EPS (Loss) | 0.39 | 0.61 | (0.21) | [Adjusted EBITDA Reconciliation](index=11&type=section&id=Adjusted%20EBITDA%20Reconciliation) This reconciliation demonstrates the calculation of adjusted EBITDA for Q2 and six-month periods of FY2025 and FY2024, starting from net income and adjusting for interest, taxes, depreciation, amortization, stock-based compensation, capitalized cloud computing amortization, ERC benefits, and gain on sale of subsidiary Net Income to Adjusted EBITDA Reconciliation (Unaudited, USD thousand) | Metric | Three Months Ended August 2, 2025 | Three Months Ended August 3, 2024 | Six Months Ended August 2, 2025 | Six Months Ended August 3, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :------------------------------ | :------------------------------ | | Net Income | 12,060 | 569 | 7,257 | 4,949 | | Interest Expense, Net | 849 | 1,647 | 1,705 | 3,293 | | Income Tax Provision (Benefit) | 58 | (794) | 58 | (1,681) | | Depreciation and Amortization | 773 | 1,022 | 1,534 | 2,035 | | Stock-Based Compensation | 96 | 255 | 242 | 250 | | Capitalized Cloud Computing Amortization | 11 | — | 23 | — | | ERC Benefit | (7,173) | — | (7,173) | — | | Gain on Sale of Subsidiary | — | — | — | (7,634) | | **Adjusted EBITDA** | **6,674** | **2,699** | **3,646** | **1,212** |

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements for Vince Holding Corp. for the three months ended May 3, 2025, and related disclosures [Item 1. Condensed Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Vince Holding Corp. as of May 3, 2025, and for the three-month period then ended, compared with the previous fiscal year-end and the corresponding prior-year period [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=a)%20Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of May 3, 2025, total assets were $218.0 million, a slight decrease from $222.7 million at February 1, 2025, primarily due to lower trade receivables and other accrued expenses, partially offset by an increase in inventories and long-term debt Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | May 3, 2025 | February 1, 2025 | | :--- | :--- | :--- | | **Total Assets** | **$217,957** | **$222,735** | | Cash and cash equivalents | $2,588 | $607 | | Inventories, net | $62,260 | $59,146 | | **Total Liabilities** | **$180,790** | **$180,976** | | Long-term debt | $34,749 | $19,156 | | **Total Stockholders' Equity** | **$37,167** | **$41,759** | [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=7&type=section&id=b)%20Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) For the three months ended May 3, 2025, the company reported a net loss of $4.8 million, a significant shift from a net income of $4.4 million in the prior-year period, driven by decreased net sales, lower gross profit, and higher SG&A expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 FY2025 (ended May 3, 2025) | Q1 FY2024 (ended May 4, 2024) | | :--- | :--- | :--- | | Net sales | $57,933 | $59,171 | | Gross profit | $29,163 | $29,913 | | (Loss) income from operations | $(4,438) | $5,604 | | Net (loss) income | $(4,803) | $4,380 | | Diluted (loss) earnings per share | $(0.37) | $0.35 | - The prior year's results for the three months ended May 4, 2024, included a significant gain on the sale of the Rebecca Taylor subsidiary amounting to **$7.6 million**, which favorably impacted income from operations and net income for that period[20](index=20&type=chunk)[53](index=53&type=chunk) [Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=c)%20Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' equity decreased from $41.8 million at the beginning of the quarter to $37.2 million as of May 3, 2025, primarily due to the net loss of $4.8 million for the period - The primary driver for the decrease in stockholders' equity during the quarter was the net loss of **$4.8 million**[25](index=25&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=d)%20Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was $11.8 million for the quarter, a significant increase from $3.9 million in the prior-year period, mainly due to changes in working capital, while net cash provided by financing activities was $15.2 million, primarily from net borrowings under the revolving credit facility Cash Flow Summary (in thousands) | Activity | Three Months Ended May 3, 2025 | Three Months Ended May 4, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(11,817) | $(3,878) | | Net cash used in investing activities | $(1,424) | $(740) | | Net cash provided by financing activities | $15,219 | $5,003 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=e)%20Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant corporate events and accounting policies, including the acquisition of a majority stake by P180 in January 2025, the 2023 sale of Vince intellectual property to ABG Vince and subsequent license agreement, and the completed wind-down and sale of the Rebecca Taylor business - On January 22, 2025, **P180 Vince Acquisition Co.** acquired a majority stake (approx. **67%**) in the Company from Sun Capital Partners[37](index=37&type=chunk)[65](index=65&type=chunk) - In May 2023, the Company sold its Vince brand intellectual property to **ABG Vince** for **$76.5 million** in cash and a **25%** membership interest, concurrently entering a long-term license agreement requiring annual guaranteed minimum royalties of **$11.0 million**[34](index=34&type=chunk)[54](index=54&type=chunk)[62](index=62&type=chunk) - On May 3, 2024, the Company completed the sale of all outstanding shares of Rebecca Taylor, Inc., recognizing a gain of **$7.6 million** as the subsidiary was in a net liability position[53](index=53&type=chunk) - In connection with the P180 acquisition, the Third Lien Credit Facility was modified, resulting in a debt extinguishment where the outstanding principal was reduced by approximately **$27,000**, leaving **$7,500** outstanding[94](index=94&type=chunk)[95](index=95&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial results for the first quarter of fiscal 2025, highlighting a 2.1% decrease in net sales to $57.9 million and a shift to an operating loss of $4.4 million from an income of $5.6 million in the prior year Q1 FY2025 vs Q1 FY2024 Performance (in thousands) | Metric | Q1 FY2025 | Q1 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $57,933 | $59,171 | -2.1% | | Gross Profit | $29,163 | $29,913 | -2.5% | | Gross Margin | 50.3% | 50.6% | -30 bps | | SG&A Expenses | $33,601 | $31,943 | +5.2% | | (Loss) Income from Operations | $(4,438) | $5,604 | N/A | - The decrease in gross margin was primarily driven by unfavorable impacts from higher freight and duty costs (**260 bps**) and wholesale channel mix (**120 bps**), partially offset by favorable impacts from lower product costing and higher pricing (**330 bps**)[156](index=156&type=chunk) - SG&A expenses increased by **$1.7 million**, or **5.2%**, mainly due to higher marketing, legal, IT, and retail remodel/relocation costs[157](index=157&type=chunk)[163](index=163&type=chunk) [Performance by Segment](index=29&type=section&id=Performance%20by%20Segment) The Vince Wholesale segment saw a slight sales increase of 0.1% to $30.3 million, but its income from operations decreased by 7.7% to $9.4 million, while the Vince Direct-to-consumer segment's sales fell 4.4% to $27.6 million, and its operating loss widened to $0.8 million from $0.1 million in the prior year Segment Net Sales (in thousands) | Segment | Q1 FY2025 | Q1 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Vince Wholesale | $30,290 | $30,257 | +0.1% | | Vince Direct-to-consumer | $27,643 | $28,914 | -4.4% | - Vince Wholesale income from operations decreased by **$0.8 million**, primarily due to lower gross margin[167](index=167&type=chunk) - Vince Direct-to-consumer comparable sales (including e-commerce) increased by **2.8%**, driven by higher e-commerce traffic, but total segment sales declined due to a **$2.0 million** decrease in non-comparable sales, including the impact of four net store closures since the prior year[168](index=168&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company's primary liquidity sources are cash, operating cash flows, and its $85 million revolving credit facility, with net cash used in operations of $11.8 million and net borrowings of $15.4 million from the credit facility during the quarter - Net cash used in operating activities was **$11.8 million**, primarily due to a net loss and cash used in working capital, including a decrease in accounts payable and an increase in inventories[172](index=172&type=chunk) - Net cash provided by financing activities was **$15.2 million**, mainly from **$15.35 million** in net borrowings under the revolving credit facilities[176](index=176&type=chunk) - As of May 3, 2025, the company had **$26.8 million** in borrowings and **$6.2 million** in letters of credit outstanding under its 2023 Revolving Credit Facility, with **$20.4 million** of availability[85](index=85&type=chunk)[188](index=188&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a "smaller reporting company," Vince Holding Corp. is not required to provide the information requested in this item - The company is exempt from this disclosure requirement due to its status as a "smaller reporting company"[202](index=202&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective as of May 3, 2025, due to a previously identified material weakness in internal control over financial reporting related to inadequate user access controls, with remediation efforts ongoing - The CEO and CFO concluded that disclosure controls and procedures were not effective as of the end of the period[205](index=205&type=chunk) - The ineffectiveness is due to a material weakness in internal control over financial reporting, specifically related to not maintaining adequate user access controls to ensure appropriate segregation of duties and restrict access to financial applications and data[207](index=207&type=chunk) - Remediation efforts are in progress, including modifying system access rights, re-certifying user access, and improving user provisioning/de-provisioning processes[209](index=209&type=chunk)[210](index=210&type=chunk) [PART II. OTHER INFORMATION](index=35&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers other information not included in the financial statements, such as legal proceedings, risk factors, and various disclosures [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings that arise in the ordinary course of business, which management believes will not have a material adverse impact on the company's financial position, results of operations, or cash flows - The company is party to legal proceedings arising in the ordinary course of business and does not expect them to have a material adverse impact[214](index=214&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) The company's risk factors have not materially changed from its 2024 Annual Report on Form 10-K, except for a new risk regarding its NYSE listing, as it received a notice of non-compliance on May 6, 2025, for failing to meet minimum market capitalization and stockholders' equity requirements - On May 6, 2025, the company received a non-compliance notice from the NYSE for failing to meet the minimum market capitalization and stockholders' equity requirements[218](index=218&type=chunk) - As of May 5, 2025, the 30-trading day average market capitalization was approximately **$22.6 million**, and the last reported stockholders' equity was **$41.8 million**, both below the **$50 million** threshold[218](index=218&type=chunk) - The company is required to submit a business plan to the NYSE within 45 days to demonstrate how it will regain compliance, with failure potentially leading to delisting[219](index=219&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the period - There were no unregistered sales of equity securities during the period[221](index=221&type=chunk) [Item 3. Defaults Upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the period - There were no defaults upon senior securities during the period[222](index=222&type=chunk) [Item 4. Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable to the company[223](index=223&type=chunk) [Item 5. Other Information](index=36&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the quarter ended May 3, 2025 - No directors or officers made changes to their trading arrangements during the quarter[224](index=224&type=chunk) [Item 6. Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report, including CEO and CFO certifications pursuant to the Sarbanes-Oxley Act of 2002 and Inline XBRL data files - Exhibits filed include CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act[225](index=225&type=chunk)