Vince Holding Corp, a global contemporary retailer, has reported its financial results for the second quarter ending 3 August 2024, revealing net sales of $74.2 million, marking a 6.8 per cent increase from $69.4 million in the same quarter of the previous fiscal year. The gross margin improved by 80 basis points year-over-year, reflecting the company’s ongoing focus on operational efficiency.

The company reported a gross profit of $35.1 million, equivalent to 47.4 per cent of net sales, compared to $32.3 million or 46.6 per cent of net sales in the second quarter of fiscal year 2023 (FY23). The increase in gross margin rate was mainly attributed to lower product costs and freight expenses, although this was partially offset by the impact of channel mix and royalty expenses linked to licensing agreements.

Income from operations was $1.1 million, a significant decrease from $32.9 million in the prior year, which included one-time gains from the sale of intangible assets. The net income stood at $0.6 million, or $0.05 per diluted share, compared to $29.5 million, or $2.36 per share, in the same quarter last year.

In terms of segment performance, wholesale sales reached $47.2 million, reflecting a 29.6 per cent increase, while direct-to-consumer sales fell to $27.0 million, resulting in an operating loss of $1.4 million for that segment. Following the completion of the wind-down of the Rebecca Taylor business, the company did not record any income from that segment in the current quarter, contrasting with $1.3 million in income from operations in the same period last year, Vince Holding said in a press release.

Looking ahead, Vince Holding Corp has adjusted its expectations for the third quarter of fiscal year 2024 (FY24), anticipating net sales to remain flat or decline slightly compared to $84.1 million in the third quarter of FY23. The company expects a significant increase in operating margin, projecting a rise of 350 to 450 basis points. For the full FY24, the company now expects net sales to decrease in the low single-digit range compared to $292.9 million in FY23, reflecting revised expectations for the direct-to-consumer segment, while maintaining optimism for the wholesale business.

David Stefko, interim chief executive officer of Vince said, "We are pleased with our second quarter results driven by strong performance in our wholesale channel, ongoing focus on full price selling and disciplined expense management of our core operating cost structure which helped to partially offset the expected headwinds from ongoing royalty expenses as well as the re-establishment of our incentive compensation programme.”

Stefko further added, “The strength in our wholesale channel was driven in part by our ability to fulfil demand earlier than expected and helped to offset softer performance in our direct-to-consumer channel which was impacted by store closures and our strategic decision to continue to pull back on promotional activity. As we look ahead to the remainder of the year, while we are taking a more prudent approach to our outlook for direct-to-consumer sales as we continue to execute our strategy amidst an increasingly uncertain macroeconomic backdrop, our outlook for our wholesale channel remains unchanged and our increased expectations for profitability underscore our commitment to operating a stronger full price business model."

Fibre2Fashion News Desk (HU)