Vince.(VNCE) - 2026 Q2 - Quarterly Results

Second Quarter Fiscal Year 2025 Performance Overview Performance 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 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] - The company prioritizes maintaining product quality and customer loyalty while navigating current challenges[2] - 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] Key Financial Performance 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 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] Gross Profit and Selling, General and Administrative Expenses 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] - 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] Net Income and Earnings Per Share 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 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 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 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] Debt and Liquidity 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] Business Outlook and Strategic Initiatives Third Quarter Fiscal Year 2025 Outlook 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] - Given the uncertainty regarding the potential impact and duration of current tariff policies, the company is not providing full fiscal year 2025 guidance[9] Strategic Partnership with Authentic Brands Group 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] - 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] - The license agreement includes an initial ten-year term and eight ten-year renewal options[11] Supplemental Information Non-GAAP Financial Measures 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][13] - 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] - Non-GAAP financial measures should not be considered in isolation or as a substitute for financial information prepared in accordance with GAAP[14] Conference Call Details 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] - Participants can join the conference call by dialing (833) 470-1428, conference ID 030527[16] - 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. 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] - 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] - The company operates 45 full-price retail stores, 14 outlet stores, its e-commerce website, and through global premium wholesale channels[17] Forward-Looking Statements 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] - 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] - 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][19] Investor Relations Contact 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] Exhibits: Financial Statements and Reconciliations Condensed Consolidated Statements of Operations 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 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 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 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 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 |