Vince.(US:VNCE)2025-12-10 21:54Financial Performance - Net sales for the three months ended November 1, 2025, were $85,126, an increase of $4,964 or 6.2% compared to $80,162 for the same period in 2024[164] - Gross profit for the three months ended November 1, 2025, was $41,907, up 4.6% from $40,058 in the prior year, with a gross margin of 49.2% compared to 50.0%[165] - Selling, general and administrative (SG&A) expenses increased by $2,175 or 6.3% to $36,472, maintaining a consistent percentage of sales at 42.8%[165] - Net income for the three months ended November 1, 2025, was $2,726, down from $4,349 in the same period last year, with diluted earnings per share at $0.21 compared to $0.34[163] - For the nine months ended November 1, 2025, total net sales were $216,300, an increase of $2,798, or 1.3%, compared to $213,502 for the same period in 2024[178] - Gross profit for the nine months ended November 1, 2025, increased by 2.8% to $108,008, with a gross margin of 49.9%, up from 49.2% in the prior year[179] - SG&A expenses decreased by $4,381, or 4.4%, to $95,860 for the nine months ended November 1, 2025, representing 44.3% of sales compared to 47.0% in the prior year[180] Segment Performance - Vince Wholesale segment net sales increased by $3,250 or 6.7% to $52,015, driven primarily by increased shipments[173] - Income from operations for the Vince Wholesale segment rose by $211 or 1.2% to $18,434, despite increased SG&A expenses and a decrease in gross margin due to tariffs[174] - Vince Direct-to-consumer segment net sales increased by $1,714, or 5.5%, to $33,111 for the three months ended November 1, 2025, compared to $31,397 for the same period in 2024[176] - Income from operations for the Vince Direct-to-consumer segment rose to $1,177 for the three months ended November 1, 2025, up from $614 in the same period in 2024, driven by increased net sales[177] - Net sales from the Vince Wholesale segment increased by $861, or 0.7%, to $127,067 for the nine months ended November 1, 2025, primarily due to increased shipments of off-price products[188] - Income from operations for the Vince Direct-to-consumer segment improved to $588 for the nine months ended November 1, 2025, compared to a loss of $848 in the same period in 2024[191] Expenses and Financing - Interest expense decreased by $718 or 42.5% to $973 due to lower levels of debt under the Third Lien credit facility[166] - Interest expense decreased by $2,306, or 46.3%, to $2,678 for the nine months ended November 1, 2025, primarily due to lower debt levels[181] - Net cash used in operating activities was $12,681 for the nine months ended November 1, 2025, compared to $633 for the same period in 2024, driven by cash outflows in working capital[195][196] - Net cash provided by financing activities was $17,310 for the nine months ended November 1, 2025, compared to $3,087 for the same period in 2024, indicating a significant increase of 460%[198][199] Capital and Debt Management - Capital expenditures for the nine months ended November 1, 2025, were $4,165, up from $2,725 in the same period in 2024, primarily related to retail store buildouts[197] - The company had $47,255 available under the 2023 Revolving Credit Facility as of November 1, 2025, with $27,563 in borrowings and $6,191 in letters of credit outstanding[210] - The weighted average interest rate for borrowings under the 2023 Revolving Credit Facility was 6.6% as of November 1, 2025[210] - The 2023 Revolving Credit Facility has a total capacity of $85,000, with a letter of credit sublimit of $10,000, and matures on June 23, 2028[202] - Following the P180 Acquisition, the outstanding principal amount of the Third Lien Credit Facility was reduced by approximately $27,000, leaving $7,500 remaining outstanding[219] - The company recorded a gain upon extinguishment of the Third Lien Credit Facility amounting to $11,575, which was recognized as a capital contribution within equity[220] - The company is in compliance with all applicable covenants as of November 1, 2025[210] Company Structure and Operations - The company operates 46 full-price retail stores and 14 outlet stores, with a focus on the Vince brand following the sale of the Rebecca Taylor and Parker brands[153] - The company has identified two reportable segments: Vince Wholesale and Vince Direct-to-consumer, with unallocated corporate expenses related to the Vince brand[158] Taxation and Compliance - The provision for income taxes for the three months ended November 1, 2025, was $2,002, compared to $0 in the prior year, reflecting a shift from losses to taxable income[168] - The company is classified as a "smaller reporting company" and is not required to provide certain market risk information[224] Industry Context - The apparel and fashion industry is cyclical, affecting revenues based on economic conditions and seasonal trends[221] - Management's discussion and analysis relies on condensed consolidated financial statements based on critical accounting policies[222] - As of November 1, 2025, there have been no material changes to the critical accounting estimates[223]