NEW YORK--(BUSINESS WIRE)--
Vince Holding Corp. (NYSE:VNCE), a leading global luxury apparel and
accessories brand (“Vince” or the “Company”), today reported unaudited
results for the first quarter of fiscal year 2019 ended May 4, 2019.
Highlights for the first quarter ended May 4, 2019:
-
Net sales increased 1.1% to $55.1 million as compared to $54.5 million
in the same period last year.
-
Direct-to-Consumer comparable sales grew 1.1%.
-
Gross margin rate increased 450 basis points to 51.3%.
-
Operating loss was $5.7 million, which includes $1.4 million of
strategic consulting costs, compared to an operating loss of $4.4
million in the same period last year.
-
Net loss was $7.0 million or $0.60 per share, which includes $1.4
million of strategic consulting costs, compared to a net loss of $5.6
million or $0.49 per share in the same period last year.
Brendan Hoffman, Chief Executive Officer, commented, “Our first quarter
results came in largely as expected. We continue to focus on our direct
to consumer business through retail expansion and enhancements to our
eCommerce channel. At wholesale, our women’s business continues to
resonate with consumers, which in our view is driving further market
share gains. Our Vince Unfold subscription business is gaining traction
and we are excited about other opportunities including a test by
Microsoft, expected to launch in the coming months, presenting Vince in
the windows of select stores. We are pleased with the increased momentum
we are seeing in our business as weather improves and we begin to
benefit from some early timing of shipments. Overall, we believe we are
gaining momentum with merchandising strategies and an elevated focus on
marketing leaving us well positioned to deliver profitable growth over
the long term.”
For the first quarter ended May 4, 2019:
-
Net sales increased 1.1% to $55.1 million compared to $54.5 million in
the first quarter of fiscal 2018. Wholesale segment sales decreased
4.0% to $27.4 million as compared to $28.5 million in the same period
last year primarily due to the shift in the timing of seasonal
wholesale shipments. Direct-to-consumer segment sales increased 6.7%
to $27.8 million to the first quarter of fiscal 2018. Comparable sales
increased 1.1%, including e-commerce sales, primarily due to an
increase in average dollar sale.
-
Gross profit was $28.3 million, or 51.3% of net sales, compared to
gross profit of $25.5 million, or 46.8% of net sales, in the first
quarter of fiscal 2018. The 450 basis point increase in gross margin
rate was due to the nonrecurrence of an unfavorable adjustment to
inventory reserves in the prior year, stronger full price selling, and
lower product costs.
-
Selling, general, and administrative expenses were $34.0 million, or
61.7% of sales, compared to $29.9 million, or 54.8% of sales, in the
first quarter of fiscal 2018. The increase in SG&A dollars was
primarily the result of strategic consulting costs of $1.4 million,
higher compensation and benefits, and investments in marketing and new
stores.
-
Operating loss was $5.7 million, or 10.4% of net sales, which includes
the aforementioned strategic consulting costs of $1.4 million.
Operating loss was $4.4 million for the first quarter of fiscal 2018.
-
Net loss was $7.0 million or $0.60 per share, which includes $1.4
million of strategic consulting costs, compared to a net loss of $5.6
million or $0.49 per share in the same period last year.
-
The Company ended the quarter with 59 company-operated stores, a net
increase of 2 stores since the first quarter of fiscal 2018.
Balance Sheet
The Company ended the first quarter of fiscal 2019 with $45.6 million of
borrowings under its debt agreements. The Company decreased borrowings
under its debt agreements since the same period last year by $5.0
million, primarily due to $4.2 million of net repayments to the term
loan facilities.
Net inventory at the end of the first quarter of fiscal 2019 was $50.3
million compared to $49.4 million at the end of the first quarter of
fiscal 2018.
Capital expenditures for the first quarter of fiscal 2019 totaled
approximately $0.5 million.
Effective February 3, 2019, the Company adopted the new Lease Accounting
Standards Codification Topic 842 (“ASC 842”) which resulted in a
significant increase in its reported assets and liabilities associated
with its operating leases. The new standard has a negligible impact on
its Consolidated Statements of Operations and Comprehensive Income
(Loss) and Consolidated Statements of Cash Flows as compared to the
previous accounting standard.
Fiscal 2019 Outlook
For fiscal 2019 the Company continues to expect:
-
Net sales to be between $290 million and $300 million. This compares
to net sales of $279.0 million in fiscal 2018.
-
Operating income to be between $7 million and $9 million. This
compares to reported operating income of $4.1 million in fiscal 2018
which included a $1.7 million non-cash asset impairment charge related
to property and equipment of certain retail stores.
-
Capital expenditures to be between $4.0 million and $4.5 million.
This guidance reflects only the current Section 301 tariffs in place on
goods imported from China. The Company has not incorporated any future
increases in tariffs on additional goods imported from China into the US
in its fiscal 2019 guidance.
2019 First Quarter Earnings Conference Call
A conference call to discuss the first quarter results will be held
today, June 13, 2019, at 4:30 p.m. ET, hosted by Vince Holding Corp.
Chief Executive Officer, Brendan Hoffman, and Executive Vice President
and Chief Financial Officer, David Stefko. During the conference call,
the Company may make comments concerning business and financial
developments, trends and other business or financial matters. The
Company's comments, as well as other matters discussed during the
conference call, may contain or constitute information that has not been
previously disclosed.
Those who wish to participate in the call may do so by dialing (833)
235-5655, conference ID 1268888. Any interested party will also have the
opportunity to access the call via the Internet at http://investors.vince.com/.
To listen to the live call, please go to the website at least 15 minutes
early to register and download any necessary audio software. For those
who cannot listen to the live broadcast, a recording will be available
for 12 months after the date of the event. Recordings may be accessed at http://investors.vince.com/.
ABOUT VINCE
Established in 2002, Vince is a leading global luxury apparel and
accessories brand best known for creating elevated yet understated
pieces for every day. The collections are inspired by the brand’s
California origins and embody a feeling of warm and effortless
style. Vince designs uncomplicated yet refined pieces that approach
dressing with a sense of ease. Known for its range of luxury products,
Vince offers women’s and men’s ready-to-wear and footwear as well as
capsule collections of handbags, fragrance, and home for a global
lifestyle. Vince products are sold in prestige locations worldwide. As
of June 13, 2019, the Company operated 45 full-price retail stores, 14
outlet stores, its e-commerce site, vince.com, as well as its
subscription business, Vince Unfold. The Company is headquartered in New
York and operates a design studio in Los Angeles. Please visit www.vince.com
for more information.
Forward-Looking Statements: This document, and any statements
incorporated by reference herein, contains forward-looking statements
under the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include the statements under "Fiscal 2019
Outlook" and statements regarding, among other things, our current
expectations about the Company's future results and financial condition,
revenues, store openings and closings, margins, expenses and earnings
and are indicated by words or phrases such as “may,” “will,” “should,”
“believe,” “expect,” “seek,” “anticipate,” “intend,” “estimate,” “plan,”
“target,” “project,” “forecast,” “envision” and other similar phrases.
Although we believe the assumptions and expectations reflected in these
forward-looking statements are reasonable, these assumptions and
expectations may not prove to be correct and we may not achieve the
results or benefits anticipated. These forward-looking statements are
not guarantees of actual results, and our actual results may differ
materially from those suggested in the forward-looking statements. These
forward-looking statements involve a number of risks and uncertainties,
some of which are beyond our control, including, without limitation: our
ability to realize the benefits of our strategic initiatives; our
ability to maintain our larger wholesale partners; the execution and
management of our retail store growth plans; our ability to make lease
payments when due; our ability to expand our product offerings into new
product categories, including the ability to find suitable licensing
partners; our ability to comply with the obligations under our credit
facilities; our ability to continue having the liquidity necessary to
service our debt, meet contractual payment obligations, and fund our
operations; our ability to remediate the identified material weakness in
our internal control over financial reporting; our ability to optimize
our systems, processes and functions; our ability to mitigate system
security risk issues, such as cyber or malware attacks, as well as other
major system failures; our ability to comply with privacy-related
obligations; our ability to comply with domestic and international laws,
regulations and orders; changes in laws and regulations; our ability to
ensure the proper operation of the distribution facilities by
third-party logistics providers; our ability to anticipate and/or react
to changes in customer demand and attract new customers, including in
connection with making inventory commitments; our ability to remain
competitive in the areas of merchandise quality, price, breadth of
selection and customer service; our ability to keep a strong brand
image; changes in global economies and credit and financial markets; our
ability to attract and retain key personnel; our ability to protect our
trademarks in the U.S. and internationally; the execution and management
of our international expansion, including our ability to promote our
brand and merchandise outside the U.S. and find suitable partners in
certain geographies; our current and future licensing arrangements; the
extent of our foreign sourcing; fluctuations in the price, availability
and quality of raw materials; commodity, raw material and other cost
increases; our reliance on independent manufacturers; seasonal and
quarterly variations in our revenue and income; further impairment of
our goodwill and indefinite-lived intangible assets; competition; other
tax matters; and other factors as set forth from time to time in
our Securities and Exchange Commission filings, including those
described under “Item 1A—Risk Factors” in our Annual Report on Form 10-K
and Quarterly Reports on Form 10-Q.
We intend these
forward-looking statements to speak only as of the time of this release
and do not undertake to update or revise them as more information
becomes available, except as required by law.
|
|
|
|
Vince Holding Corp. and Subsidiaries
|
Exhibit (1)
|
|
|
Condensed Consolidated Statements of Operations
|
|
|
|
(Unaudited, amounts in thousands except
|
|
percentages, share and per share data)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
May 4,
|
|
|
May 5,
|
|
|
|
2019
|
|
|
2018
|
|
Net sales
|
|
$
|
55,122
|
|
|
$
|
54,514
|
|
Cost of products sold
|
|
|
26,856
|
|
|
|
28,978
|
|
Gross profit
|
|
|
28,266
|
|
|
|
25,536
|
|
as a % of net sales
|
|
|
51.3
|
%
|
|
|
46.8
|
%
|
Selling, general and administrative expenses
|
|
|
34,015
|
|
|
|
29,900
|
|
as a % of net sales
|
|
|
61.7
|
%
|
|
|
54.8
|
%
|
Loss from operations
|
|
|
(5,749
|
)
|
|
|
(4,364
|
)
|
as a % of net sales
|
|
|
(10.4
|
)%
|
|
|
(8.0
|
)%
|
Interest expense, net
|
|
|
1,077
|
|
|
|
1,289
|
|
Other expense (income), net
|
|
|
108
|
|
|
|
(64
|
)
|
Loss before income taxes
|
|
|
(6,934
|
)
|
|
|
(5,589
|
)
|
Provision for income taxes
|
|
|
42
|
|
|
|
48
|
|
Net loss
|
|
$
|
(6,976
|
)
|
|
$
|
(5,637
|
)
|
Loss per share:
|
|
|
|
|
|
|
|
|
Basic loss per share
|
|
$
|
(0.60
|
)
|
|
$
|
(0.49
|
)
|
Diluted loss per share
|
|
$
|
(0.60
|
)
|
|
$
|
(0.49
|
)
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
11,629,836
|
|
|
|
11,616,500
|
|
Diluted
|
|
|
11,629,836
|
|
|
|
11,616,500
|
|
|
|
|
|
|
|
|
|
|
|
Vince Holding Corp. and Subsidiaries
|
Exhibit (2)
|
|
|
Condensed Consolidated Balance Sheets
|
|
|
|
(Unaudited, amounts in thousands)
|
|
|
|
|
|
May 4,
|
|
|
February 2,
|
|
|
May 5,
|
|
|
2019
|
|
|
2019
|
|
|
2018
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
147
|
|
|
$
|
118
|
|
|
$
|
5,228
|
Trade receivables, net
|
|
|
15,767
|
|
|
|
28,896
|
|
|
|
12,764
|
Inventories, net
|
|
|
50,311
|
|
|
|
53,271
|
|
|
|
49,360
|
Prepaid expenses and other current assets
|
|
|
7,808
|
|
|
|
6,317
|
|
|
|
7,517
|
Total current assets
|
|
|
74,033
|
|
|
|
88,602
|
|
|
|
74,869
|
Property and equipment, net
|
|
|
23,826
|
|
|
|
25,156
|
|
|
|
29,966
|
Operating lease right-of-use assets
|
|
|
80,430
|
|
|
|
-
|
|
|
|
-
|
Intangible assets, net
|
|
|
76,351
|
|
|
|
76,501
|
|
|
|
76,949
|
Goodwill
|
|
|
41,435
|
|
|
|
41,435
|
|
|
|
41,435
|
Deferred income taxes and other assets
|
|
|
3,334
|
|
|
|
3,237
|
|
|
|
2,738
|
Total assets
|
|
$
|
299,409
|
|
|
$
|
234,931
|
|
|
$
|
225,957
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
21,612
|
|
|
$
|
28,787
|
|
|
$
|
20,149
|
Accrued salaries and employee benefits
|
|
|
4,158
|
|
|
|
5,510
|
|
|
|
4,003
|
Other accrued expenses
|
|
|
9,071
|
|
|
|
8,535
|
|
|
|
9,288
|
Short-term lease liabilities
|
|
|
16,524
|
|
|
|
-
|
|
|
|
-
|
Current portion of long-term debt
|
|
|
2,750
|
|
|
|
2,750
|
|
|
|
8,000
|
Total current liabilities
|
|
|
54,115
|
|
|
|
45,582
|
|
|
|
41,440
|
Long-term debt
|
|
|
41,529
|
|
|
|
42,340
|
|
|
|
41,600
|
Deferred rent
|
|
|
-
|
|
|
|
14,636
|
|
|
|
15,316
|
Long-term lease liabilities
|
|
|
78,830
|
|
|
|
-
|
|
|
|
-
|
Other liabilities
|
|
|
58,273
|
|
|
|
58,273
|
|
|
|
58,273
|
Stockholders' equity
|
|
|
66,662
|
|
|
|
74,100
|
|
|
|
69,328
|
Total liabilities and stockholders' equity
|
|
$
|
299,409
|
|
|
$
|
234,931
|
|
|
$
|
225,957
|
View source version on businesswire.com:
https://www.businesswire.com/news/home/20190613005679/en/
Investor Relations Contact:
ICR, Inc.
Jean Fontana,
646-277-1200
Jean.fontana@icrinc.com
Source: Vince Holding Corp.