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 third quarter of fiscal 2018 ended November 3, 2018.
Highlights for the third quarter ended November 3, 2018:
-
Net sales increased 5.6% to $83.5 million
-
Direct-to-Consumer sales increased 17.1%; comparable sales grew 14.1%
-
Gross margin rate increased 250 basis points to 48.9%
-
Operating income increased 68.9% to $9.0 million
-
Net income was $6.8 million or $0.57 per diluted share compared to net
income $3.5 million or $0.41 per diluted share
Brendan Hoffman, Chief Executive Officer, commented, “Our third quarter
results reflect continued strength across several areas of our business.
Operating income for the quarter increased by $3.7 million and for the
year-to-date period, operating results improved by $13.9 million. For
the third quarter, our retail segment delivered a 14.1% comp with
continued momentum in our eCommerce business while in our wholesale
segment, we saw continued strength in our department store doors with
higher sell-through rates and further market share gains. During the
third quarter, we opened two stores in premier locations and we recently
signed a lease for a store in midtown Manhattan across from Rockefeller
Center. Overall, with another quarter of great results under our belt,
combined with our performance through the Black Friday weekend, we are
raising the low end of our full year guidance and are more optimistic
than ever about our ability to deliver profitable growth over the long
term.”
For the third quarter ended November 3, 2018:
-
Net sales increased 5.6% to $83.5 million from $79.1 million in the
third quarter of fiscal 2017. Wholesale segment sales were flat at
$53.0 million, as shipment declines related to the exit of certain
wholesale partners were offset by lower sales allowances than in the
same prior year period. Direct-to-consumer segment sales increased
17.1% to $30.5 million compared to the third quarter of fiscal 2017.
Comparable sales increased 14.1%, including e-commerce sales, due
primarily to an increase in transactions partially offset by a lower
average unit retail related to product mix.
-
Gross profit increased 11.3% to $40.8 million, or 48.9% of net sales,
compared to gross profit of $36.7 million, or 46.4% of net sales, in
the third quarter of fiscal 2017. The 250 basis point increase in
gross margin rate in the third quarter of fiscal 2018 was due to a
decrease in the rate of sales allowances in the wholesale segment,
non-recurring costs incurred in the third quarter of fiscal 2017
related to the exit of certain wholesale partners and lower product
and supply chain costs. This was partially offset by an unfavorable
impact from year-over-year adjustments to inventory reserves.
-
Selling, general, and administrative expenses were $31.9 million, or
38.2% of sales compared to $31.4 million, or 39.7% of sales, in the
third quarter of fiscal 2017.
-
Operating income increased by 68.9% to $9.0 million, or 10.7% of net
sales compared to operating income of $5.3 million, or 6.7% of net
sales for the third quarter of fiscal 2017.
-
Net income was $6.8 million, or $0.57 per diluted share compared to
$3.5 million, or $0.41 per diluted share for the third quarter of
fiscal 2017.
-
The Company ended the quarter with 59 company-operated stores
representing a net increase of four stores since the third quarter of
last year.
Balance Sheet
The Company ended the third quarter of fiscal 2018 with $1.0 million in
cash and cash equivalents and $63.0 million of borrowings under its debt
agreements. On August 21, 2018, the Company refinanced the 2013
Revolving Credit Facility and the 2013 Term Loan Facility by entering
into the 2018 Revolving Credit Facility and 2018 Term Loan Facility. All
outstanding amounts under the previous credit facilities totaling $69.8
million including interest were repaid in full.
The Company decreased overall borrowings under its debt agreements since
the same period last year by $5.1 million, primarily due to $8.5 million
of net repayments to the term loan facilities, partially offset by an
increase in net borrowings under the revolving credit facilities to fund
working capital needs.
Net inventory at the end of the third quarter of fiscal 2018 was $61.5
million compared to $51.4 million at the end of the third quarter of
fiscal 2017. The increase in inventory was primarily due to the planned
product returns in the first half of the fiscal year from exited
wholesale partners and the growth of the replenishment program.
Capital expenditures for the third quarter of fiscal 2018 totaled $1.3
million.
Fiscal 2018 Outlook
For fiscal 2018 the Company now expects:
-
Net sales to be between $277 million and $280 million. This compares
to net sales of $272.6 million in fiscal 2017.
-
Operating income to be between $5 million and $7 million, excluding
any potential non-cash asset impairment charges. This compares to
reported operating loss of $18.3 million in fiscal 2017, which
included a $5.1 million non-cash asset impairment charge related to
property and equipment of certain retail stores.
2018 Third Quarter Earnings Conference Call
A conference call to discuss the third quarter results will be held
today, December 13, 2018, at 8:30 a.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 3394516. 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 and home for a global lifestyle. Vince
products are sold in prestige locations worldwide. As of December 13,
2018, the Company operated 45 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 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 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 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.
|
|
|
|
|
|
|
|
|
|
|
Exhibit (1)
|
|
Vince Holding Corp. and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Operations
|
|
|
|
(Unaudited, amounts in thousands except percentages, share and
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
November 3,
|
|
|
|
October 28,
|
|
|
|
November 3,
|
|
|
|
October 28,
|
|
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|
2018
|
|
|
|
2017
|
|
|
Net sales
|
|
|
|
$
|
83,526
|
|
|
|
$
|
79,067
|
|
|
|
$
|
201,168
|
|
|
|
$
|
197,934
|
|
|
Cost of products sold
|
|
|
|
|
42,709
|
|
|
|
|
42,400
|
|
|
|
|
107,096
|
|
|
|
|
110,120
|
|
|
Gross profit
|
|
|
|
|
40,817
|
|
|
|
|
36,667
|
|
|
|
|
94,072
|
|
|
|
|
87,814
|
|
|
as a % of net sales
|
|
|
|
|
48.9
|
%
|
|
|
|
46.4
|
%
|
|
|
|
46.8
|
%
|
|
|
|
44.4
|
%
|
|
Selling, general and administrative expenses
|
|
|
|
|
31,850
|
|
|
|
|
31,358
|
|
|
|
|
91,893
|
|
|
|
|
99,558
|
|
|
as a % of net sales
|
|
|
|
|
38.2
|
%
|
|
|
|
39.7
|
%
|
|
|
|
45.7
|
%
|
|
|
|
50.3
|
%
|
|
Income (loss) from operations
|
|
|
|
|
8,967
|
|
|
|
|
5,309
|
|
|
|
|
2,179
|
|
|
|
|
(11,744
|
)
|
|
as a % of net sales
|
|
|
|
|
10.7
|
%
|
|
|
|
6.7
|
%
|
|
|
|
1.1
|
%
|
|
|
|
(5.9
|
)%
|
|
Interest expense, net
|
|
|
|
|
2,154
|
|
|
|
|
1,693
|
|
|
|
|
4,740
|
|
|
|
|
4,013
|
|
|
Other expense, net
|
|
|
|
|
78
|
|
|
|
|
113
|
|
|
|
|
87
|
|
|
|
|
116
|
|
|
Income (loss) before income taxes
|
|
|
|
|
6,735
|
|
|
|
|
3,503
|
|
|
|
|
(2,648
|
)
|
|
|
|
(15,873
|
)
|
|
Provision (benefit) for income taxes
|
|
|
|
|
(30
|
)
|
|
|
|
(6
|
)
|
|
|
|
46
|
|
|
|
|
42
|
|
|
Net income (loss)
|
|
|
|
$
|
6,765
|
|
|
|
$
|
3,509
|
|
|
|
$
|
(2,694
|
)
|
|
|
$
|
(15,915
|
)
|
|
Earnings (Loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share
|
|
|
|
$
|
0.58
|
|
|
|
$
|
0.41
|
|
|
|
$
|
(0.23
|
)
|
|
|
$
|
(2.58
|
)
|
|
Diluted earnings (loss) per share
|
|
|
|
$
|
0.57
|
|
|
|
$
|
0.41
|
|
|
|
$
|
(0.23
|
)
|
|
|
$
|
(2.58
|
)
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
11,621,012
|
|
|
|
|
8,610,869
|
|
|
|
|
11,619,059
|
|
|
|
|
6,166,219
|
|
|
Diluted
|
|
|
|
|
11,847,606
|
|
|
|
|
8,611,308
|
|
|
|
|
11,619,059
|
|
|
|
|
6,166,219
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit (2)
|
|
Vince Holding Corp. and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited, amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November 3,
|
|
|
February 3,
|
|
|
October 28,
|
|
|
|
|
2018
|
|
|
2018
|
|
|
2017
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
1,050
|
|
|
$
|
5,372
|
|
|
$
|
5,723
|
|
Trade receivables, net
|
|
|
|
|
32,323
|
|
|
|
20,760
|
|
|
|
31,278
|
|
Inventories, net
|
|
|
|
|
61,515
|
|
|
|
48,921
|
|
|
|
51,378
|
|
Prepaid expenses and other current assets
|
|
|
|
|
6,369
|
|
|
|
6,521
|
|
|
|
4,045
|
|
Total current assets
|
|
|
|
|
101,257
|
|
|
|
81,574
|
|
|
|
92,424
|
|
Property and equipment, net
|
|
|
|
|
28,158
|
|
|
|
31,608
|
|
|
|
38,799
|
|
Intangible assets, net
|
|
|
|
|
76,650
|
|
|
|
77,099
|
|
|
|
77,249
|
|
Goodwill
|
|
|
|
|
41,435
|
|
|
|
41,435
|
|
|
|
41,435
|
|
Deferred income taxes and other assets
|
|
|
|
|
3,422
|
|
|
|
2,818
|
|
|
|
2,816
|
|
Total assets
|
|
|
|
$
|
250,922
|
|
|
$
|
234,534
|
|
|
$
|
252,723
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
27,053
|
|
|
$
|
22,556
|
|
|
$
|
15,717
|
|
Accrued salaries and employee benefits
|
|
|
|
|
6,514
|
|
|
|
6,715
|
|
|
|
5,045
|
|
Other accrued expenses
|
|
|
|
|
9,473
|
|
|
|
7,906
|
|
|
|
11,522
|
|
Current portion of long-term debt
|
|
|
|
|
2,750
|
|
|
|
8,000
|
|
|
|
9,000
|
|
Total current liabilities
|
|
|
|
|
45,790
|
|
|
|
45,177
|
|
|
|
41,284
|
|
Long-term debt
|
|
|
|
|
58,730
|
|
|
|
40,682
|
|
|
|
57,621
|
|
Deferred rent
|
|
|
|
|
15,111
|
|
|
|
15,633
|
|
|
|
15,927
|
|
Other liabilities
|
|
|
|
|
58,273
|
|
|
|
58,273
|
|
|
|
137,830
|
|
Stockholders' equity
|
|
|
|
|
73,018
|
|
|
|
74,769
|
|
|
|
61
|
|
Total liabilities and stockholders' equity
|
|
|
|
$
|
250,922
|
|
|
$
|
234,534
|
|
|
$
|
252,723
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com:
https://www.businesswire.com/news/home/20181213005099/en/
Investor Relations:
ICR, Inc.
Jean Fontana, 646-277-1214
Jean.fontana@icrinc.com
Source: Vince Holding Corp.