NYSE:VNCE Vince Q4 2025 Earnings Report $2.26 +0.30 (+15.31%) Closing price 03:58 PM EasternExtended Trading$2.25 -0.01 (-0.44%) As of 04:11 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Vince EPS ResultsActual EPS$0.06Consensus EPS -$0.10Beat/MissBeat by +$0.16One Year Ago EPSN/AVince Revenue ResultsActual RevenueN/AExpected Revenue$72.98 millionBeat/MissN/AYoY Revenue GrowthN/AVince Announcement DetailsQuarterQ4 2025Date4/29/2025TimeBefore Market OpensConference Call DateFriday, May 2, 2025Conference Call Time8:30AM ETUpcoming EarningsVince's Q1 2026 earnings is scheduled for Friday, May 2, 2025Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Earnings HistoryCompany ProfilePowered by Vince Q4 2025 Earnings Call TranscriptProvided by QuartrMay 2, 2025 ShareLink copied to clipboard.There are 6 speakers on the call. Operator00:00:00Thank you, and good morning, everyone. Welcome to Vince Holding Corp. Fourth quarter and full year fiscal twenty twenty four results conference call. Hosting the call today is Brendan Hoffman, Chief Executive Officer and Yuji Okumura, Chief Financial Officer. Before we begin, let me remind you that certain statements made on this call may constitute forward looking statements, which are subject to risks and uncertainties that could cause actual results to differ from those that the company expects. Operator00:00:30Those risks and uncertainties are described in today's press release and in the company's SEC filings, which are available on the company's website. Investors should not assume that statements made during the call will remain operative at a later time, and the company undertakes no obligation to update any information discussed on the call. In addition, in today's discussion, the company is presenting its financial results in conformity with GAAP and on an adjusted basis. The adjusted results that the company presents today are non GAAP measures. Discussions of those non GAAP measures and information on reconciliations of them to their most comparable GAAP measures are included in today's press release and related schedules, which are available in the Investors section of the company's website at investors.fins.com. Operator00:01:21Now I'll turn the call over to Brendan. Speaker 100:01:25Thank you, Akiko, and thank you, everyone, for joining us today. This marks my first earnings call since returning as CEO earlier this year, and I cannot overstate how proud I am to be back with the Vince team. Having observed the business' evolution from a distance these past few years, I recognize not only the progress that has been made in strengthening the foundation of the organization, especially over the past year, but also the strength of the leadership team in place and the consistency in the product delivered season after season. The core DNA of Vince remains intact. Our product continues to resonate with consumers seeking effortless sophistication, and we've made significant strides in operational efficiency. Speaker 100:02:05While we are currently operating amidst a highly dynamic and evolving landscape, the work the team has done over the past year with its transformation plan and focusing on improving product costs and overall operating efficiencies better positions us to navigate today's environment. Before I provide more color on the current environment and how it's impacting Vince, let me review a few highlights on the business' fourth quarter performance. The period came in better than expected, driven by our wholesale segment, which helped to offset the softness in our retail stores despite ongoing positive momentum with our full price customer file, which drove growth in our e commerce channel. During the quarter, we continued to engage the Full Price customer with double digit growth in Full Price customers in Q4 across our DTC channels. Additionally, retention efforts focused on our most valuable and highest spending customer tier proved effective with plus 9% growth in our highest customer spending tier from Q4. Speaker 100:03:04Across both men's and women's, we saw strength in our sweaters and bottoms assortments. Our funnel neck sweater continues to be a key product for our women's sweater assortment and drove nice growth in the quarter. We also saw strength in our women's pant business as customers gravitated towards new fabrications and seasonal colors in our core bias pants. In men's, cashmere was also a top performing fabrication within sweaters, and we continue to be pleased with the success of our pant program. As we did with our bias pants for women, we introduced new sueded fabrication for our Dillon pant in men's and continue to see nice reception to the newness we are delivering with key silhouettes. Speaker 100:03:42Within wholesale, we continue to see strong momentum. Our relationships with key wholesale partners have never been stronger, and I am amazed by the growth we are now delivering in this channel that just a few years ago appeared to have plateaued. In partners like Nordstrom's and Bloomingdale's, we have prime floor space to showcase our compelling assortments and provide opportunities for growth, including the expansion of our men's business. As the team has talked about in prior quarters, men's is an opportunity for the brand. What was once a key I'm business has now grown into a full collection today, and we are proud to be a dual gender brand represented in all Nordstrom doors. Speaker 100:04:20While I hope to be sharing more on the growth opportunities we see ahead for the brand, our number one priority at the moment is navigating and managing through the evolving tariff policies and dynamic consumer landscape. In environments such as these, the strength of our relationships with our wholesale partners is critical. I am working closely with Jill Norton, our Chief Commercial Officer, and we are talking with our partners regularly on how to best handle the current situation with tariffs and the uncertainty we are all grappling with around the potential impact they may have on consumer behavior. In our own direct to consumer channel, while e commerce has remained positive, store sales performance has been inconsistent. However, we are pleased with the improved product margin performance across all our direct to consumer channels. Speaker 100:05:05We are closely monitoring potential changes in consumer behavior given the uncertainty with the current macro environment. As it relates to tariffs, as Yuji will discuss, while we have reduced our exposure to China over the past few years, as of the end of fiscal twenty twenty four, over 60% of our cost of goods sold were sourced from China. We are actively working on mitigation strategies. We are in the process of moving about one third of our exposure for fall product outside of China. We are planning for further geographic diversification of our sourcing base. Speaker 100:05:37We are also evaluating strategic price increases and working closely with partners across our network to help to absorb the increased costs. In addition, we are taking a very measured approach in all expenditures across the organization in light of the current environment. Given the increased uncertainty and limited visibility to what the full impact of current policy and consumer behavior, we will not be providing full year guidance. As I mentioned at the start of my remarks, the organization is on a much stronger footing heading into this type of environment given the actions and changes that have put in place over the past year. The transformation plan delivered over $10,000,000 in savings in fiscal twenty twenty four, and the efforts from this plan will now shift to help manage tariff mitigation. Speaker 100:06:22To be clear, our entire organization continues to be focused on execution and delivering the product and experience our partners and customers expect from us. The transformation plan is to foster a culture in which everyone looks to do their part to affect change and deliver results and will be a key driver of the real time changes we need to make to manage through the current situation. Before I wrap up, I'd like to acknowledge our team for their continued efforts in prioritizing and enhancing our relationships with our customers, vendors and wholesale partners. I also want to take a moment to express my appreciation for the depth of talent we have within our organization. I'm particularly pleased that Yuji has stepped into the role of CFO. Speaker 100:07:02Having been with the company since 2018 and most recently serving as our controller, he brings tremendous institutional knowledge and financial acumen to this position. I have every confidence in his ability to navigate our current dynamic environment and to help drive our financial strategy forward. The seamless transition is a testament to the strong bench of leadership at Bits. The continuity and depth of the team is manifested in the high quality product we deliver season after season. With our team solidified and with a more efficient operating model in place, while our strategic priorities are shifting to manage through the current situation, I have the utmost confidence that we will successfully navigate these near term headwinds. Speaker 100:07:44I've always believed in the strength and potential for Vince. It's why I've led the company previously, and it's what brought me back. I'm committed to leveraging my experience and passion for Vince to not only successfully navigate today's environment, but to drive sustainable long term growth. I'll now turn it over to Yuji to discuss our financial results and outlook in more detail. Speaker 200:08:06Thank you, Brendan, and good morning, everyone. Fiscal twenty twenty four was an important year for the company as we focused on executing a healthier full price business, enabling us to strengthen our financial foundation reflected in the 100 basis point improvement. In the adjusted operating margin on relatively flat sales performance compared to the prior year. As Brendan noted, while we are currently operating in a very dynamic environment, we believe through the work we have put in place and the actions we have taken with respect to our cost structure and product margin improvements better position us to navigate today's challenges. Before I discuss our views for fiscal twenty twenty five, let me review our fourth quarter results in more detail. Speaker 200:08:51As a reminder, the fourth quarter of fiscal twenty twenty three included a fourteenth week, representing the fifty third week in the prior year, which resulted in approximately $2,200,000 in net sales and $400,000 in loss from operations. The company net sales for the fourth quarter increased 6.2% to $80,000,000 compared to $75,300,000 in the fourth quarter of fiscal twenty twenty three. Excluding the impact from the extra week, total company net sales for the fourth quarter increased approximately 9% compared to the prior year. With respect to channel performance, we delivered a 26.7% increase in our wholesale segment, which more than offset an 8.1% decrease in our direct to consumer segment. Our wholesale performance overall exceeded our expectations for the period driven in part by earlier shipments of our spring product to our wholesale partners. Speaker 200:09:53Our direct to consumer business performed relatively in line to our expectations as our store channel continued to be impacted by planned store activity including closures, remodels and relocations along with softer trends in traffic. Gross profit in the fourth quarter was $40,100,000 or 50.1% of net sales. This compared to $34,200,000 or 45.4% of net sales in the fourth quarter of last year. The increase in gross margin rate was driven by approximately three twenty basis points related to lower promotional activity in our direct to consumer segment and our lower discounting as well as approximately two ten basis points related to lower product costing and freight costs. These factors were partially offset by approximately 120 basis points attributable to channel mix. Speaker 200:10:50Selling and general administrative expenses in the quarter were $37,800,000 or 47.2% of net sales as compared to $35,800,000 or 47.6% of net sales for the fourth quarter of last year. The slight increase in SG and A dollars compared to the prior year period was largely driven by increased salaries and benefits and increased rent expense attributable to lease modifications made in prior comparative quarter. These factors were partially offset by decreases in consulting and information technology costs. During the quarter, we recorded a $32,000,000 noncash goodwill impairment charge. The impairment charge was driven by the change in control of ownership through P-one hundred eighty's acquisition of the majority of our common equity shares from SUM Capital in January. Speaker 200:11:43Including the impact of this chart, operating loss for the fourth quarter was $29,700,000 compared to operating loss of $1,700,000 in the same period last year. Excluding the non cash goodwill impairment charge and the transaction expenses associated with the P-one hundred eighty transaction, adjusted operating income was $2,500,000 The improvement in adjusted operating income compared to the prior year was primarily driven by the gross margin expansion. Net interest expense for the quarter decreased to $1,600,000 compared to $1,700,000 in the prior year. The decrease was primarily driven by the paydown of the third lien facility which occurred in conjunction with the P-one80 transaction. Benefit for the income taxes this quarter was $2,000,000 which was driven by $3,000,000 reversal of deferred tax liability previously created by the amortization of indefinite lived goodwill recognized for tax but not for book purposes. Speaker 200:12:49As the goodwill was fully impaired, the deferred tax liability created by the asset was also reversed. This was offset by the current federal and state tax expenses. The tax benefit in the fourth quarter of fiscal twenty twenty four compares to an income tax expense of $1,900,000 in the same period last year. Net loss for the fourth quarter was $28,300,000 or loss per share of $2.24 compared to a net loss of $4,700,000 or loss per share of $0.37 in the fourth quarter last year. The current period includes the previously mentioned goodwill impairment. Speaker 200:13:30Excluding the impairment charge and its associated tax impact and the P-one 80 transaction expenses, we had net income for the quarter of $800,000 or earnings per share of $06 Moving to the balance sheet. Net inventory was $59,100,000 at the end of fourth quarter as compared to $58,800,000 at the end of fourth quarter last year. Before I review our outlook for the first quarter, I wanted to follow-up on Brendan's discussion regarding tariffs. As of the end of fiscal twenty twenty four, China represented 66% of our cost of goods sold and therefore our current policies with respect to tariffs have significant impact on our business. We are actively reviewing all mitigation strategies, including diversifying our geographic exposure, working with our vendors for concessions, reviewing our pricing strategies and capturing other efficiencies. Speaker 200:14:31As Brendan noted, we have already begun to dramatically reduce our exposure to China beginning with our full product. Given the timing of the increased tariff, we do not expect a material impact to our first quarter performance. However, as noted in our press release, given the uncertainty related to the potential impact and duration of the current tariff policies, we will not be providing full year guidance at this time. However, let me provide some color on our expectations for Q1. As a reminder, the first quarter is typically our smallest quarter of the year from a sales and profitability perspective and historically delivers an operating loss for the period. Speaker 200:15:12For the first quarter of fiscal twenty twenty five, we expect sales to decline approximately 5% compared to prior year, driven by the impact of timing of shifts of our wholesale shipment as well as impact from planned store activity in our retail channel, including multiple closures, remodels and relocations as well as pullback in promotional activity. With respect to profitability, we continue to be pleased with the traction we have seen in product margin performance and have continued to reduce our promotional activity through the first few months of the fiscal year. That said, we expect adjusted operating margin to decline approximately 500 basis points compared to the prior year period, largely driven by lower sales, increased marketing spend earlier in the quarter and other expenses primarily related to the timing of the store relocations and remodels. As discussed, given the increased uncertainty in our current landscape, we are being very disciplined with expenses going forward and believe the strategic initiatives and discipline we implemented throughout 2024 have positioned us well to execute effectively to respond to the current macro challenges. We're collaborating closely with our wholesale partners, assessing all available mitigation levers, and leveraging our exceptional team to navigate this landscape. Speaker 200:16:37Our primary focus remains on delivering the quality product and experiences that have drawn customers to Vince. We will continue to operate with strategic agility, maintaining the flexibility to adapt quickly as market conditions evolve. This concludes our remarks, and I will now turn it over to the operator to open the call for questions. Thank you. Speaker 300:17:11And the first question today comes from Eric Beder from SCC Research. Eric, please go ahead. Your line is open. Speaker 400:17:18Good morning. Congratulations on coming back, Brendan. Speaker 100:17:23Thank you, Eric. Speaker 400:17:26You look at kind of let's just take tariffs out of it and look at the business for just a little bit. In terms of new products, new expansions, new categories, anything is that what process changed? I know that you've expanded the accessories portion a little bit. Are we gonna see more of that going forward? And how should we think about the store count and the opportunity there? Speaker 100:17:55You broke up a little bit. Were you saying taking tariffs out of it? Speaker 400:18:01Not so we've talked enough about tariffs. When we look at the business this year, in terms of the potential to expand some of the categories further, that's been talked about by your predecessors. Is that still the case in terms of accessories and in terms of some of the other businesses? And how should we be thinking about longer term the potential for store expansion both in The U. S. Speaker 400:18:26And internationally? Speaker 100:18:28Yeah. So, I'm very excited about the evolution of the categories. You know, a lot of that, credit goes to Authentic Brands Group because they they are the ones pushing that. But I think, you know, they push the envelope there a little bit to to everyone's advantage. So I think it's created more diversity in terms of our offering, and that's only going to, only gonna continue. Speaker 100:18:50So I think, you know, we tried to do that when I was here the first time through some third party product, and, I think now being able to do it through the Vince label, whether we do it directly or or through ABG and some licenses has, has really enhanced the brand. In terms of, stores, store openings, I mean, again, you know, we'll have to see what happens with tariffs. But momentarily taking that out of it, we were enthusiastic about the opportunity to expand in some new locations and markets here in The U. S, including we have one store planned for Sacramento and another one planned for Nashville. We have a second store opening up in London next month or later this month, I guess, now. Speaker 100:19:35So yes. So we'll have to see some of the decisions we now need to make around tariffs and and see where that plays out. But, you know, very enthusiastic for what I've seen coming back five years later with the evolution of the brand. Speaker 400:19:54And just to kind of follow-up a little bit on that, I know you've been changing the systems around to be able to, focus more on some of the core customers. You mentioned some of those metrics for q four. What is the opportunity there to better market to kind of that customer who for can afford maybe a price increase or other pieces driven by tariffs, going forward? Thank you. Speaker 100:20:21Yes. I think the team had really been focused last year on full price, getting back to full price and our full price customer, which is going to benefit us as I think you just suggested given what is likely to happen with some strategic price increases. So very fortunate that that works has already started and we'll just continue to support that and strategically make investments to go after that full price customer as you said, hopefully can absorb any of the price increases that come down the road. But for us, this is true five years ago, it's true now. Vince has always been about great value. Speaker 100:21:01And so we need to make sure that where we sit amongst our peers, we're still providing great value to our consumer base. Speaker 400:21:12Okay. Thank you. Good luck for the rest of the year. Speaker 100:21:16Thanks, Eric. Speaker 300:21:19The next question comes from Michael Kupinski from Noble Financial. Michael, your line is open. Please go ahead. Speaker 500:21:25Thank you. Thanks for taking my questions. Appreciate that. Just a quick, couple of quick questions. Can you quantify how much of the revenue shift in wholesale there was into the fourth quarter? Speaker 100:21:37Yeah. Sure. This is Yuji. Speaker 200:21:38I can take that. The the fourth quarter, in in relation to the fourth quarter, the the shift, wasn't material because fourth quarter, wasn't material enough in the grand scheme of things just given that the, fourth quarter is just a bigger size business compared to the Q1. So when you look at it in comparison to Q the impact it had to Q1 twenty twenty five, it obviously has a significant more meaning with the timing of the shift. Speaker 500:22:12Okay. And going back to the tariffs, has the tariff issue changed any of your plans for product introductions or even current products that you may now decide to discontinue? Just trying to get a sense of do you anticipate that there will be fewer SKUs in this year or do you still plan your moving forward with your current plans? Speaker 100:22:38Well, it's definitely a work in progress. The team is on the ground, in Asia now, working closely with our partners, our suppliers to move production where we can, where we think it doesn't sacrifice quality into other parts of Asia to try to avoid the China tariffs. There'll definitely be a little bit of SKU reduction. There are just some things that won't make sense to bring in at these levels for fall. As we move to pre spring, which is our holiday, we feel more confident that we can change around the sourcing and protect the key items. Speaker 100:23:21But it's definitely a work in progress and obviously will change depending on where the tariffs ultimately land. Speaker 500:23:32Thank you. And my last question, one of your strategies was to decrease cost was to shift from like airfreight to ship freight. And I was just wondering in terms of the tariffs and possibly maybe even supply issues, guess, if you're you're looking at it that way may change. Has that strategy changed in any way? Speaker 100:23:55I'm sorry. We're we're, specific to whether we air or boat? Is that what the question was? Speaker 500:24:00Yes. Correct. Yeah. That's right. Speaker 100:24:03Yeah. I mean, right now, we're we're starting to put stuff back on the water, you know, through through boat, to meet our ship windows, but also give our ourselves a little bit more flexibility to see where the, where the tariffs land over the next three or four weeks. We do have a bonded warehouse here in The US that gives us a little bit more flexibility if we don't like where things are. But to your point, we've also talked about maybe maybe it will make sense to air some stuff just to have a little bit more precision in terms of where the, when the goods land. I think it's important for us, to be able to have goods land and be able to turn them right right around so that we can convert it rather than sit in our warehouse for a few weeks. Speaker 100:24:45So I would say that mostly it's gonna be both, but we'll continue to assess that, you know, as as the situation continues to evolve. Speaker 500:24:56Got you. That's all I have. Thank you. Speaker 200:25:00Thank you. Speaker 300:25:03I'm not showing any further questions on my side. So with that, I'll hand the call back to Brendan Hoffman for some closing comments. Speaker 100:25:08Okay. Well, we thank everyone for joining us today, and we look forward to updating you on our Q1 final results in June. Thanks very much. Speaker 300:25:20This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallVince Q4 202500:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K) Vince Earnings HeadlinesVince outlines tariff mitigation strategies and Q1 2025 expectationsMay 2 at 3:05 PM | msn.comVince Holding Corp. (VNCE) Reports Strong Wholesale Growth in Q4 2024May 2 at 2:19 PM | gurufocus.comSilicon Valley Gold RushA new technology has sparked a modern-day gold rush in Silicon Valley. OpenAI’s Sam Altman invested $375M. Bill Gates has backed four companies in this space. The World Economic Forum calls it “the most exciting human discovery since fire.” Whitney Tilson believes this trend could mint a new class of wealthy investors—and he’s sharing one stock to watch now, for free.May 2, 2025 | Stansberry Research (Ad)Vince Holding Corp. (VNCE) Q4 2024 Earnings Call TranscriptMay 2 at 2:01 PM | seekingalpha.comUncovering Potential: Vince Holding's Earnings PreviewMay 1 at 2:47 PM | benzinga.comVince (VNCE) Projected to Post Earnings on FridayMay 1 at 1:13 AM | americanbankingnews.comSee More Vince Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Vince? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Vince and other key companies, straight to your email. Email Address About VinceVince (NYSE:VNCE) provides luxury apparel and accessories in the United States and internationally. It operates through Vince Wholesale, Vince Direct-to-Consumer segments. The company offers a range of men's and women's products, such as cashmere sweaters, silk blouses, leather and suede products, and jackets, dresses, skirts, pants, t-shirts, footwear, outerwear, and accessories, as well as woven shirts, core and fashion pants, and blazers under the Vince brand. It sells its products directly to consumers through its branded specialty retail stores and outlet stores, as well as through its vince.com e-commerce platform and subscription business through Vince Unfold, vinceunfold.com; and to department stores and specialty stores. The company was formerly known as Apparel Holding Corp. and changed its name to Vince Holding Corp. in November 2013. The company was founded in 2002 and is headquartered in New York, New York.View Vince ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Amazon Earnings: 2 Reasons to Love It, 1 Reason to Be CautiousMeta Takes A Bow With Q1 Earnings - Watch For Tariff Impact in Q2Palantir Earnings: 1 Bullish Signal and 1 Area of ConcernMicrosoft Crushes Earnings, What’s Next for MSFT Stock?Qualcomm's Earnings: 2 Reasons to Buy, 1 to Stay AwayAMD Stock Signals Strong Buy Ahead of EarningsAmazon's Earnings Will Make or Break the Stock's Comeback Upcoming Earnings Palantir Technologies (5/5/2025)Vertex Pharmaceuticals (5/5/2025)CRH (5/5/2025)Realty Income (5/5/2025)Williams Companies (5/5/2025)American Electric Power (5/6/2025)Advanced Micro Devices (5/6/2025)Marriott International (5/6/2025)Constellation Energy (5/6/2025)Arista Networks (5/6/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. Start Your 30-Day Trial MarketBeat All Access Features Best-in-Class Portfolio Monitoring Get personalized stock ideas. Compare portfolio to indices. Check stock news, ratings, SEC filings, and more. Stock Ideas and Recommendations See daily stock ideas from top analysts. Receive short-term trading ideas from MarketBeat. Identify trending stocks on social media. Advanced Stock Screeners and Research Tools Use our seven stock screeners to find suitable stocks. Stay informed with MarketBeat's real-time news. Export data to Excel for personal analysis. Sign in to your free account to enjoy these benefits In-depth profiles and analysis for 20,000 public companies. Real-time analyst ratings, insider transactions, earnings data, and more. Our daily ratings and market update email newsletter. Sign in to your free account to enjoy all that MarketBeat has to offer. Sign In Create Account Your Email Address: Email Address Required Your Password: Password Required Log In or Sign in with Facebook Sign in with Google Forgot your password? Your Email Address: Please enter your email address. Please enter a valid email address Choose a Password: Please enter your password. Your password must be at least 8 characters long and contain at least 1 number, 1 letter, and 1 special character. Create My Account (Free) or Sign in with Facebook Sign in with Google By creating a free account, you agree to our terms of service. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
There are 6 speakers on the call. Operator00:00:00Thank you, and good morning, everyone. Welcome to Vince Holding Corp. Fourth quarter and full year fiscal twenty twenty four results conference call. Hosting the call today is Brendan Hoffman, Chief Executive Officer and Yuji Okumura, Chief Financial Officer. Before we begin, let me remind you that certain statements made on this call may constitute forward looking statements, which are subject to risks and uncertainties that could cause actual results to differ from those that the company expects. Operator00:00:30Those risks and uncertainties are described in today's press release and in the company's SEC filings, which are available on the company's website. Investors should not assume that statements made during the call will remain operative at a later time, and the company undertakes no obligation to update any information discussed on the call. In addition, in today's discussion, the company is presenting its financial results in conformity with GAAP and on an adjusted basis. The adjusted results that the company presents today are non GAAP measures. Discussions of those non GAAP measures and information on reconciliations of them to their most comparable GAAP measures are included in today's press release and related schedules, which are available in the Investors section of the company's website at investors.fins.com. Operator00:01:21Now I'll turn the call over to Brendan. Speaker 100:01:25Thank you, Akiko, and thank you, everyone, for joining us today. This marks my first earnings call since returning as CEO earlier this year, and I cannot overstate how proud I am to be back with the Vince team. Having observed the business' evolution from a distance these past few years, I recognize not only the progress that has been made in strengthening the foundation of the organization, especially over the past year, but also the strength of the leadership team in place and the consistency in the product delivered season after season. The core DNA of Vince remains intact. Our product continues to resonate with consumers seeking effortless sophistication, and we've made significant strides in operational efficiency. Speaker 100:02:05While we are currently operating amidst a highly dynamic and evolving landscape, the work the team has done over the past year with its transformation plan and focusing on improving product costs and overall operating efficiencies better positions us to navigate today's environment. Before I provide more color on the current environment and how it's impacting Vince, let me review a few highlights on the business' fourth quarter performance. The period came in better than expected, driven by our wholesale segment, which helped to offset the softness in our retail stores despite ongoing positive momentum with our full price customer file, which drove growth in our e commerce channel. During the quarter, we continued to engage the Full Price customer with double digit growth in Full Price customers in Q4 across our DTC channels. Additionally, retention efforts focused on our most valuable and highest spending customer tier proved effective with plus 9% growth in our highest customer spending tier from Q4. Speaker 100:03:04Across both men's and women's, we saw strength in our sweaters and bottoms assortments. Our funnel neck sweater continues to be a key product for our women's sweater assortment and drove nice growth in the quarter. We also saw strength in our women's pant business as customers gravitated towards new fabrications and seasonal colors in our core bias pants. In men's, cashmere was also a top performing fabrication within sweaters, and we continue to be pleased with the success of our pant program. As we did with our bias pants for women, we introduced new sueded fabrication for our Dillon pant in men's and continue to see nice reception to the newness we are delivering with key silhouettes. Speaker 100:03:42Within wholesale, we continue to see strong momentum. Our relationships with key wholesale partners have never been stronger, and I am amazed by the growth we are now delivering in this channel that just a few years ago appeared to have plateaued. In partners like Nordstrom's and Bloomingdale's, we have prime floor space to showcase our compelling assortments and provide opportunities for growth, including the expansion of our men's business. As the team has talked about in prior quarters, men's is an opportunity for the brand. What was once a key I'm business has now grown into a full collection today, and we are proud to be a dual gender brand represented in all Nordstrom doors. Speaker 100:04:20While I hope to be sharing more on the growth opportunities we see ahead for the brand, our number one priority at the moment is navigating and managing through the evolving tariff policies and dynamic consumer landscape. In environments such as these, the strength of our relationships with our wholesale partners is critical. I am working closely with Jill Norton, our Chief Commercial Officer, and we are talking with our partners regularly on how to best handle the current situation with tariffs and the uncertainty we are all grappling with around the potential impact they may have on consumer behavior. In our own direct to consumer channel, while e commerce has remained positive, store sales performance has been inconsistent. However, we are pleased with the improved product margin performance across all our direct to consumer channels. Speaker 100:05:05We are closely monitoring potential changes in consumer behavior given the uncertainty with the current macro environment. As it relates to tariffs, as Yuji will discuss, while we have reduced our exposure to China over the past few years, as of the end of fiscal twenty twenty four, over 60% of our cost of goods sold were sourced from China. We are actively working on mitigation strategies. We are in the process of moving about one third of our exposure for fall product outside of China. We are planning for further geographic diversification of our sourcing base. Speaker 100:05:37We are also evaluating strategic price increases and working closely with partners across our network to help to absorb the increased costs. In addition, we are taking a very measured approach in all expenditures across the organization in light of the current environment. Given the increased uncertainty and limited visibility to what the full impact of current policy and consumer behavior, we will not be providing full year guidance. As I mentioned at the start of my remarks, the organization is on a much stronger footing heading into this type of environment given the actions and changes that have put in place over the past year. The transformation plan delivered over $10,000,000 in savings in fiscal twenty twenty four, and the efforts from this plan will now shift to help manage tariff mitigation. Speaker 100:06:22To be clear, our entire organization continues to be focused on execution and delivering the product and experience our partners and customers expect from us. The transformation plan is to foster a culture in which everyone looks to do their part to affect change and deliver results and will be a key driver of the real time changes we need to make to manage through the current situation. Before I wrap up, I'd like to acknowledge our team for their continued efforts in prioritizing and enhancing our relationships with our customers, vendors and wholesale partners. I also want to take a moment to express my appreciation for the depth of talent we have within our organization. I'm particularly pleased that Yuji has stepped into the role of CFO. Speaker 100:07:02Having been with the company since 2018 and most recently serving as our controller, he brings tremendous institutional knowledge and financial acumen to this position. I have every confidence in his ability to navigate our current dynamic environment and to help drive our financial strategy forward. The seamless transition is a testament to the strong bench of leadership at Bits. The continuity and depth of the team is manifested in the high quality product we deliver season after season. With our team solidified and with a more efficient operating model in place, while our strategic priorities are shifting to manage through the current situation, I have the utmost confidence that we will successfully navigate these near term headwinds. Speaker 100:07:44I've always believed in the strength and potential for Vince. It's why I've led the company previously, and it's what brought me back. I'm committed to leveraging my experience and passion for Vince to not only successfully navigate today's environment, but to drive sustainable long term growth. I'll now turn it over to Yuji to discuss our financial results and outlook in more detail. Speaker 200:08:06Thank you, Brendan, and good morning, everyone. Fiscal twenty twenty four was an important year for the company as we focused on executing a healthier full price business, enabling us to strengthen our financial foundation reflected in the 100 basis point improvement. In the adjusted operating margin on relatively flat sales performance compared to the prior year. As Brendan noted, while we are currently operating in a very dynamic environment, we believe through the work we have put in place and the actions we have taken with respect to our cost structure and product margin improvements better position us to navigate today's challenges. Before I discuss our views for fiscal twenty twenty five, let me review our fourth quarter results in more detail. Speaker 200:08:51As a reminder, the fourth quarter of fiscal twenty twenty three included a fourteenth week, representing the fifty third week in the prior year, which resulted in approximately $2,200,000 in net sales and $400,000 in loss from operations. The company net sales for the fourth quarter increased 6.2% to $80,000,000 compared to $75,300,000 in the fourth quarter of fiscal twenty twenty three. Excluding the impact from the extra week, total company net sales for the fourth quarter increased approximately 9% compared to the prior year. With respect to channel performance, we delivered a 26.7% increase in our wholesale segment, which more than offset an 8.1% decrease in our direct to consumer segment. Our wholesale performance overall exceeded our expectations for the period driven in part by earlier shipments of our spring product to our wholesale partners. Speaker 200:09:53Our direct to consumer business performed relatively in line to our expectations as our store channel continued to be impacted by planned store activity including closures, remodels and relocations along with softer trends in traffic. Gross profit in the fourth quarter was $40,100,000 or 50.1% of net sales. This compared to $34,200,000 or 45.4% of net sales in the fourth quarter of last year. The increase in gross margin rate was driven by approximately three twenty basis points related to lower promotional activity in our direct to consumer segment and our lower discounting as well as approximately two ten basis points related to lower product costing and freight costs. These factors were partially offset by approximately 120 basis points attributable to channel mix. Speaker 200:10:50Selling and general administrative expenses in the quarter were $37,800,000 or 47.2% of net sales as compared to $35,800,000 or 47.6% of net sales for the fourth quarter of last year. The slight increase in SG and A dollars compared to the prior year period was largely driven by increased salaries and benefits and increased rent expense attributable to lease modifications made in prior comparative quarter. These factors were partially offset by decreases in consulting and information technology costs. During the quarter, we recorded a $32,000,000 noncash goodwill impairment charge. The impairment charge was driven by the change in control of ownership through P-one hundred eighty's acquisition of the majority of our common equity shares from SUM Capital in January. Speaker 200:11:43Including the impact of this chart, operating loss for the fourth quarter was $29,700,000 compared to operating loss of $1,700,000 in the same period last year. Excluding the non cash goodwill impairment charge and the transaction expenses associated with the P-one hundred eighty transaction, adjusted operating income was $2,500,000 The improvement in adjusted operating income compared to the prior year was primarily driven by the gross margin expansion. Net interest expense for the quarter decreased to $1,600,000 compared to $1,700,000 in the prior year. The decrease was primarily driven by the paydown of the third lien facility which occurred in conjunction with the P-one80 transaction. Benefit for the income taxes this quarter was $2,000,000 which was driven by $3,000,000 reversal of deferred tax liability previously created by the amortization of indefinite lived goodwill recognized for tax but not for book purposes. Speaker 200:12:49As the goodwill was fully impaired, the deferred tax liability created by the asset was also reversed. This was offset by the current federal and state tax expenses. The tax benefit in the fourth quarter of fiscal twenty twenty four compares to an income tax expense of $1,900,000 in the same period last year. Net loss for the fourth quarter was $28,300,000 or loss per share of $2.24 compared to a net loss of $4,700,000 or loss per share of $0.37 in the fourth quarter last year. The current period includes the previously mentioned goodwill impairment. Speaker 200:13:30Excluding the impairment charge and its associated tax impact and the P-one 80 transaction expenses, we had net income for the quarter of $800,000 or earnings per share of $06 Moving to the balance sheet. Net inventory was $59,100,000 at the end of fourth quarter as compared to $58,800,000 at the end of fourth quarter last year. Before I review our outlook for the first quarter, I wanted to follow-up on Brendan's discussion regarding tariffs. As of the end of fiscal twenty twenty four, China represented 66% of our cost of goods sold and therefore our current policies with respect to tariffs have significant impact on our business. We are actively reviewing all mitigation strategies, including diversifying our geographic exposure, working with our vendors for concessions, reviewing our pricing strategies and capturing other efficiencies. Speaker 200:14:31As Brendan noted, we have already begun to dramatically reduce our exposure to China beginning with our full product. Given the timing of the increased tariff, we do not expect a material impact to our first quarter performance. However, as noted in our press release, given the uncertainty related to the potential impact and duration of the current tariff policies, we will not be providing full year guidance at this time. However, let me provide some color on our expectations for Q1. As a reminder, the first quarter is typically our smallest quarter of the year from a sales and profitability perspective and historically delivers an operating loss for the period. Speaker 200:15:12For the first quarter of fiscal twenty twenty five, we expect sales to decline approximately 5% compared to prior year, driven by the impact of timing of shifts of our wholesale shipment as well as impact from planned store activity in our retail channel, including multiple closures, remodels and relocations as well as pullback in promotional activity. With respect to profitability, we continue to be pleased with the traction we have seen in product margin performance and have continued to reduce our promotional activity through the first few months of the fiscal year. That said, we expect adjusted operating margin to decline approximately 500 basis points compared to the prior year period, largely driven by lower sales, increased marketing spend earlier in the quarter and other expenses primarily related to the timing of the store relocations and remodels. As discussed, given the increased uncertainty in our current landscape, we are being very disciplined with expenses going forward and believe the strategic initiatives and discipline we implemented throughout 2024 have positioned us well to execute effectively to respond to the current macro challenges. We're collaborating closely with our wholesale partners, assessing all available mitigation levers, and leveraging our exceptional team to navigate this landscape. Speaker 200:16:37Our primary focus remains on delivering the quality product and experiences that have drawn customers to Vince. We will continue to operate with strategic agility, maintaining the flexibility to adapt quickly as market conditions evolve. This concludes our remarks, and I will now turn it over to the operator to open the call for questions. Thank you. Speaker 300:17:11And the first question today comes from Eric Beder from SCC Research. Eric, please go ahead. Your line is open. Speaker 400:17:18Good morning. Congratulations on coming back, Brendan. Speaker 100:17:23Thank you, Eric. Speaker 400:17:26You look at kind of let's just take tariffs out of it and look at the business for just a little bit. In terms of new products, new expansions, new categories, anything is that what process changed? I know that you've expanded the accessories portion a little bit. Are we gonna see more of that going forward? And how should we think about the store count and the opportunity there? Speaker 100:17:55You broke up a little bit. Were you saying taking tariffs out of it? Speaker 400:18:01Not so we've talked enough about tariffs. When we look at the business this year, in terms of the potential to expand some of the categories further, that's been talked about by your predecessors. Is that still the case in terms of accessories and in terms of some of the other businesses? And how should we be thinking about longer term the potential for store expansion both in The U. S. Speaker 400:18:26And internationally? Speaker 100:18:28Yeah. So, I'm very excited about the evolution of the categories. You know, a lot of that, credit goes to Authentic Brands Group because they they are the ones pushing that. But I think, you know, they push the envelope there a little bit to to everyone's advantage. So I think it's created more diversity in terms of our offering, and that's only going to, only gonna continue. Speaker 100:18:50So I think, you know, we tried to do that when I was here the first time through some third party product, and, I think now being able to do it through the Vince label, whether we do it directly or or through ABG and some licenses has, has really enhanced the brand. In terms of, stores, store openings, I mean, again, you know, we'll have to see what happens with tariffs. But momentarily taking that out of it, we were enthusiastic about the opportunity to expand in some new locations and markets here in The U. S, including we have one store planned for Sacramento and another one planned for Nashville. We have a second store opening up in London next month or later this month, I guess, now. Speaker 100:19:35So yes. So we'll have to see some of the decisions we now need to make around tariffs and and see where that plays out. But, you know, very enthusiastic for what I've seen coming back five years later with the evolution of the brand. Speaker 400:19:54And just to kind of follow-up a little bit on that, I know you've been changing the systems around to be able to, focus more on some of the core customers. You mentioned some of those metrics for q four. What is the opportunity there to better market to kind of that customer who for can afford maybe a price increase or other pieces driven by tariffs, going forward? Thank you. Speaker 100:20:21Yes. I think the team had really been focused last year on full price, getting back to full price and our full price customer, which is going to benefit us as I think you just suggested given what is likely to happen with some strategic price increases. So very fortunate that that works has already started and we'll just continue to support that and strategically make investments to go after that full price customer as you said, hopefully can absorb any of the price increases that come down the road. But for us, this is true five years ago, it's true now. Vince has always been about great value. Speaker 100:21:01And so we need to make sure that where we sit amongst our peers, we're still providing great value to our consumer base. Speaker 400:21:12Okay. Thank you. Good luck for the rest of the year. Speaker 100:21:16Thanks, Eric. Speaker 300:21:19The next question comes from Michael Kupinski from Noble Financial. Michael, your line is open. Please go ahead. Speaker 500:21:25Thank you. Thanks for taking my questions. Appreciate that. Just a quick, couple of quick questions. Can you quantify how much of the revenue shift in wholesale there was into the fourth quarter? Speaker 100:21:37Yeah. Sure. This is Yuji. Speaker 200:21:38I can take that. The the fourth quarter, in in relation to the fourth quarter, the the shift, wasn't material because fourth quarter, wasn't material enough in the grand scheme of things just given that the, fourth quarter is just a bigger size business compared to the Q1. So when you look at it in comparison to Q the impact it had to Q1 twenty twenty five, it obviously has a significant more meaning with the timing of the shift. Speaker 500:22:12Okay. And going back to the tariffs, has the tariff issue changed any of your plans for product introductions or even current products that you may now decide to discontinue? Just trying to get a sense of do you anticipate that there will be fewer SKUs in this year or do you still plan your moving forward with your current plans? Speaker 100:22:38Well, it's definitely a work in progress. The team is on the ground, in Asia now, working closely with our partners, our suppliers to move production where we can, where we think it doesn't sacrifice quality into other parts of Asia to try to avoid the China tariffs. There'll definitely be a little bit of SKU reduction. There are just some things that won't make sense to bring in at these levels for fall. As we move to pre spring, which is our holiday, we feel more confident that we can change around the sourcing and protect the key items. Speaker 100:23:21But it's definitely a work in progress and obviously will change depending on where the tariffs ultimately land. Speaker 500:23:32Thank you. And my last question, one of your strategies was to decrease cost was to shift from like airfreight to ship freight. And I was just wondering in terms of the tariffs and possibly maybe even supply issues, guess, if you're you're looking at it that way may change. Has that strategy changed in any way? Speaker 100:23:55I'm sorry. We're we're, specific to whether we air or boat? Is that what the question was? Speaker 500:24:00Yes. Correct. Yeah. That's right. Speaker 100:24:03Yeah. I mean, right now, we're we're starting to put stuff back on the water, you know, through through boat, to meet our ship windows, but also give our ourselves a little bit more flexibility to see where the, where the tariffs land over the next three or four weeks. We do have a bonded warehouse here in The US that gives us a little bit more flexibility if we don't like where things are. But to your point, we've also talked about maybe maybe it will make sense to air some stuff just to have a little bit more precision in terms of where the, when the goods land. I think it's important for us, to be able to have goods land and be able to turn them right right around so that we can convert it rather than sit in our warehouse for a few weeks. Speaker 100:24:45So I would say that mostly it's gonna be both, but we'll continue to assess that, you know, as as the situation continues to evolve. Speaker 500:24:56Got you. That's all I have. Thank you. Speaker 200:25:00Thank you. Speaker 300:25:03I'm not showing any further questions on my side. So with that, I'll hand the call back to Brendan Hoffman for some closing comments. Speaker 100:25:08Okay. Well, we thank everyone for joining us today, and we look forward to updating you on our Q1 final results in June. Thanks very much. Speaker 300:25:20This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.Read morePowered by