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 2018 ended May 5, 2018.
Highlights for the first quarter ended May 5, 2018:
-
Direct-to-Consumer sales increased 14.9%; comparable sales grew 12.3%
-
Gross margin rate increased 270 basis points to 46.8%
-
Operating loss improved $3.8 million to $4.4 million from $8.2 million
-
Net loss was $5.6 million or $0.49 per share compared to a net loss of
$9.3 million or $1.88 per share
Brendan Hoffman, Chief Executive Officer, commented, “We were pleased
with the strong response to our women’s and men’s product assortments in
the first quarter which drove a double digit comparable sales increase
in our full price stores, and more than 25% growth in our eCommerce
business. In addition, we are highly encouraged by our three recent
store openings, all of which are exceeding our sales expectations. In
the wholesale channel, we saw better than expected performance at both
Nordstrom and Neiman Marcus as well as strong sell-through across all
accounts, indicating a favorable response to our product offering. Sales
in our wholesale segment declined, consistent with our expectations,
primarily as the result of our planned reduction in partners in this
channel. Given our increased confidence and visibility in the business,
we have reinstituted annual guidance. With the building enthusiasm for
our brand, we are more confident than ever that we are on the right path
to delivering consistent profitable growth over the long term.”
For the first quarter ended May 5, 2018:
-
Net sales decreased 6.1% to $54.5 million compared to $58.0 million in
the first quarter of fiscal 2017. Wholesale segment sales decreased
19.5% to $28.5 million, in line with expectations, as compared to the
same period last year primarily due to the planned reduction in
full-price wholesale partners. Direct-to-consumer segment sales
increased 14.9% to $26.0 million compared to the first quarter of
fiscal 2017. Comparable sales increased 12.3%, including e-commerce
sales, primarily due to an increase in transactions.
-
Gross profit was $25.5 million, or 46.8% of net sales, compared to
gross profit of $25.6 million, or 44.1% of net sales, in the first
quarter of fiscal 2017. The 270 basis point increase in gross margin
rate was largely due to lower sales allowances in the wholesale
channel and a favorable shift in channel mix, partially offset by the
unfavorable impact of adjustments to inventory reserves.
-
Selling, general, and administrative expenses were $29.9 million, or
54.8% of sales, compared to $33.8 million, or 58.2% of sales, in the
first quarter of fiscal 2017. The decline in SG&A dollars was
primarily the result of lower product development costs and the
non-recurrence of investments made last year related to the
remediation and optimization of the systems implemented during fiscal
2016.
-
Operating loss was $4.4 million, compared to an operating loss of $8.2
million for the first quarter of fiscal 2017.
-
Net loss was $5.6 million or $0.49 per share compared to a net loss of
$9.3 million or $1.88 per share.
-
The Company ended the quarter with 57 company-operated stores, a net
increase of three stores since the first quarter of fiscal 2017.
Balance Sheet
The Company ended the first quarter of fiscal 2018 with $5.2 million in
cash and cash equivalents and $50.6 million of borrowings under its debt
agreements. The Company decreased borrowings under its debt agreements
since the same period last year by $15.5 million, primarily due to $14.0
million of payments to the term loan facility.
Net inventory at the end of the first quarter of fiscal 2018 was $49.4
million compared to $32.2 million at the end of the first quarter of
fiscal 2017. The increase in net inventory was primarily due to a change
in the timing of shipments to the off-price wholesale channel, growth of
the replenishment program, and the reinstatement of the Company’s summer
collection.
Capital expenditures for the first quarter of fiscal 2018 totaled
approximately $0.3 million.
Fiscal 2018 Outlook
For fiscal 2018 the Company expects:
-
Net sales to be between $273 million and $280 million. This compares
to net sales of $272.6 million in fiscal 2017.
-
Operating income to be between $3 million and $6 million. This
compares to reported operating loss of $18.3 million in fiscal 2017
which includes a $5.1 million non-cash asset impairment charge related
to property and equipment of certain retail stores.
2018 First Quarter Earnings Conference Call
A conference call to discuss the first quarter results will be held
today, June 14, 2018, 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 1985467. 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, shoes, handbags, and home
for a global lifestyle. Vince products are sold in prestige locations
worldwide. As of June 14, 2018, the Company operated 44 full-price
retail stores, 14 outlet stores and its e-commerce site, vince.com. The
Company is headquartered in New York and operates a design studio in Los
Angeles. Please visit www.vince.com
for more information. This press release is also available on the Vince
Holding Corp. website (http://investors.vince.com/).
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 2018
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 continue having the liquidity necessary to service our debt,
meet contractual payment obligations, and fund our operations; our
ability to comply with the covenants under our credit facilities; our
ability to successfully operate the newly implemented systems, processes
and functions recently transitioned from Kellwood Company; our ability
to remediate the identified material weaknesses in our internal control
over financial reporting; further impairment of our goodwill and
indefinite-lived intangible assets; our ability to realize the benefits
of our recently announced strategic initiatives; the execution and
management of our retail store growth plans; our ability to make lease
payments when due; our ability to ensure the proper operation of the
distribution facility by a third-party logistics provider; our ability
to remain competitive in the areas of merchandise quality, price,
breadth of selection and customer service; 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 manage excess inventory in a way that will promote the long-term
health of the brand; changes in consumer confidence and spending; our
ability to maintain projected profit margins; 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 ability to expand our product
offerings into new product categories, including the ability to find
suitable licensing partners; our ability to successfully implement our
marketing initiatives; our ability to protect our trademarks in the U.S.
and internationally; our ability to maintain the security of electronic
and other confidential information; serious disruptions and catastrophic
events; changes in global economies and credit and financial markets;
competition; our ability to attract and retain key personnel; commodity,
raw material and other cost increases; compliance with domestic and
international laws, regulations and orders; changes in laws and
regulations; outcomes of litigation and proceedings and the availability
of insurance, indemnification and other third-party coverage of any
losses suffered in connection therewith; effect of the U.S. federal
income tax law reform; other tax matters; and other factors as set forth
from time to time in our Securities and Exchange Commission filings,
including those described in our Annual Report on Form 10-K under “Item
1A—Risk Factors.” 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 5,
|
|
|
April 29,
|
|
|
|
2018
|
|
|
2017
|
|
Net sales
|
|
$
|
54,514
|
|
|
$
|
58,045
|
|
Cost of products sold
|
|
|
28,978
|
|
|
|
32,454
|
|
Gross profit
|
|
|
25,536
|
|
|
|
25,591
|
|
as a % of net sales
|
|
|
46.8
|
%
|
|
|
44.1
|
%
|
Selling, general and administrative expenses
|
|
|
29,900
|
|
|
|
33,784
|
|
as a % of net sales
|
|
|
54.8
|
%
|
|
|
58.2
|
%
|
Loss from operations
|
|
|
(4,364
|
)
|
|
|
(8,193
|
)
|
as a % of net sales
|
|
|
(8.0
|
)%
|
|
|
(14.1
|
)%
|
Interest expense, net
|
|
|
1,289
|
|
|
|
1,044
|
|
Other (income) expense, net
|
|
|
(64
|
)
|
|
|
1
|
|
Loss before income taxes
|
|
|
(5,589
|
)
|
|
|
(9,238
|
)
|
Provision for income taxes
|
|
|
48
|
|
|
|
52
|
|
Net loss
|
|
$
|
(5,637
|
)
|
|
$
|
(9,290
|
)
|
Loss per share:
|
|
|
|
|
|
|
|
|
Basic loss per share
|
|
$
|
(0.49
|
)
|
|
$
|
(1.88
|
)
|
Diluted loss per share
|
|
$
|
(0.49
|
)
|
|
$
|
(1.88
|
)
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
11,616,500
|
|
|
|
4,942,825
|
|
Diluted
|
|
|
11,616,500
|
|
|
|
4,942,825
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vince Holding Corp. and Subsidiaries
|
|
|
|
|
|
|
|
|
Exhibit (2)
|
Condensed Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
(Unaudited, amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
May 5,
|
|
|
February 3,
|
|
|
April 29,
|
|
|
|
2018
|
|
|
2018
|
|
|
2017
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
5,228
|
|
|
$
|
5,372
|
|
|
$
|
15,391
|
|
Trade receivables, net
|
|
|
12,764
|
|
|
|
20,760
|
|
|
|
20,292
|
|
Inventories, net
|
|
|
49,360
|
|
|
|
48,921
|
|
|
|
32,213
|
|
Prepaid expenses and other current assets
|
|
|
7,517
|
|
|
|
6,521
|
|
|
|
2,868
|
|
Total current assets
|
|
|
74,869
|
|
|
|
81,574
|
|
|
|
70,764
|
|
Property and equipment, net
|
|
|
29,966
|
|
|
|
31,608
|
|
|
|
42,017
|
|
Intangible assets, net
|
|
|
76,949
|
|
|
|
77,099
|
|
|
|
77,548
|
|
Goodwill
|
|
|
41,435
|
|
|
|
41,435
|
|
|
|
41,435
|
|
Deferred income taxes and other assets
|
|
|
2,738
|
|
|
|
2,818
|
|
|
|
2,518
|
|
Total assets
|
|
$
|
225,957
|
|
|
$
|
234,534
|
|
|
$
|
234,282
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
20,149
|
|
|
$
|
22,556
|
|
|
$
|
25,016
|
|
Accrued salaries and employee benefits
|
|
|
4,003
|
|
|
|
6,715
|
|
|
|
2,671
|
|
Other accrued expenses
|
|
|
9,288
|
|
|
|
7,906
|
|
|
|
10,739
|
|
Current portion of long-term debt
|
|
|
8,000
|
|
|
|
8,000
|
|
|
|
—
|
|
Total current liabilities
|
|
|
41,440
|
|
|
|
45,177
|
|
|
|
38,426
|
|
Long-term debt
|
|
|
41,600
|
|
|
|
40,682
|
|
|
|
64,395
|
|
Deferred rent
|
|
|
15,316
|
|
|
|
15,633
|
|
|
|
16,670
|
|
Other liabilities
|
|
|
58,273
|
|
|
|
58,273
|
|
|
|
137,830
|
|
Stockholders' equity (deficit)
|
|
|
69,328
|
|
|
|
74,769
|
|
|
|
(23,039
|
)
|
Total liabilities and stockholders' equity
|
|
$
|
225,957
|
|
|
$
|
234,534
|
|
|
$
|
234,282
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|

View source version on businesswire.com: https://www.businesswire.com/news/home/20180614005206/en/
Source: Vince Holding Corp.