Vince.(US:VNCE)2025-06-17 13:30Financial Data and Key Metrics Changes - Total company net sales for Q1 2025 decreased by 2.1% to $57.9 million compared to $59.2 million in Q1 2024 [13] - Gross profit was $29.2 million, representing 50.3% of net sales, down from 50.6% in the prior year [14] - Operating loss for Q1 was $4.4 million, compared to an operating income of $5.6 million in the same period last year [15] - Net loss for Q1 was $4.8 million, or a loss per share of $0.37, compared to net income of $4.4 million, or income per share of $0.35 in Q1 2024 [17] - Adjusted EBITDA was negative $3 million for Q1, compared to negative $1.5 million in the prior year [18] Business Line Data and Key Metrics Changes - The wholesale segment was relatively flat compared to the prior year, while the direct-to-consumer segment declined by 4.4% due to planned store activity and softer traffic trends [13] - Improved product margins were noted, excluding freight and distribution costs, indicating a healthier margin business [7] Market Data and Key Metrics Changes - The company has significantly reduced its exposure to China, with expectations that by spring 2026, exposure will be approximately 25% of the cost of goods [19] - The company is experiencing a sequential improvement in trends, particularly in the e-commerce channel [6] Company Strategy and Development Direction - The company is focused on mitigating the impact of evolving tariff policies by negotiating with vendors and diversifying its supply chain [5] - Plans to open new stores in Nashville and Sacramento later this year, alongside recent store remodels to enhance customer experience [10] - The strategy includes maintaining product quality while diversifying sourcing outside of China [20] Management's Comments on Operating Environment and Future Outlook - Management remains cautious about the macroeconomic environment and has decided not to provide full-year guidance due to ongoing volatility [18] - There is optimism about the second quarter, with expectations for net sales to be flat to down 3% compared to the prior year [19] Other Important Information - Selling, general, and administrative expenses increased to $33.6 million, or 58% of net sales, compared to 54% in the prior year [14] - The company is committed to disciplined expense management and operating excellence despite the challenges faced [18] Q&A Session Summary Question: Trends in freight costs and distribution methods - The company has shifted to air shipping for more products in Q1 due to timing issues and expects to see higher freight costs in Q2 [24][26] Question: Impact of trade policy issues in the third and fourth quarters - Management believes they can mitigate some tariff impacts through supplier discounts and strategic pricing increases [28] Question: Plans for price increases - The company has implemented some price increases but aims to keep them reasonable and maintain value for consumers [29] Question: Factors driving positive consumer trends - The introduction of linen products has been well received, and the company has successfully extended its spring assortment despite delays in pre-fall shipments [32]