Vince Q1 Earnings Call Highlights

Key Points

• Vince posted a strong first quarter with net sales up 10.5% year over year to $64 million, driven by gains in both direct-to-consumer and wholesale. Direct-to-consumer sales rose 15.6% and wholesale increased 5.9%.
• Profitability improved despite tariff pressure, as gross margin ticked up to 50.6% and operating losses narrowed to $2.6 million from $4.4 million a year ago. The company said higher pricing and lower discounting helped offset the impact of tariffs.
• Vince raised its fiscal 2026 outlook, now expecting full-year sales growth of 7% to 8% and higher profitability targets. Management also said second-quarter sales are tracking above low-double-digit growth so far, though it remains cautious about macro volatility.

Vince NASDAQ: VNCE reported stronger first-quarter fiscal 2026 results and raised its full-year outlook, as the apparel company cited momentum across both its direct-to-consumer and wholesale channels.

Chief Executive Officer Brendan Hoffman said the company’s performance reflected continued execution of strategic priorities following momentum built during fiscal 2025. “The momentum we built throughout fiscal 2025 has accelerated into the new year,” Hoffman said on the earnings call. He added that Vince is “executing our strategic priorities with precision and confidence.”

For the first quarter, Vince reported net sales of $64 million, up 10.5% from $57.9 million in the prior-year period. Direct-to-consumer sales increased 15.6%, while wholesale sales rose 5.9% year over year.

Direct-to-consumer and wholesale both contribute to growth

Hoffman described direct-to-consumer as a “standout performer,” pointing to store remodels, expanded e-commerce capabilities, increased marketing support and the launch of drop ship capabilities as factors giving customers more ways to engage with the brand.

He said the first quarter delivered “outstanding performance” in full-price customer acquisition, with double-digit growth in both new and reactivated customers. In wholesale, Hoffman said at-the-register sales were up low double digits with U.S. major accounts, and relationships with key partners were strengthening amid what he described as a broader resurgence in the contemporary category.

Hoffman said customers continue to respond to Vince’s product quality, design and style. In women’s, he identified woven tops as the strongest category, including solid blouses, prints and new cotton woven programs. Pants also showed strength through expanded core fabrications, added colors and novelty prints. Dresses gained momentum late in the quarter, led by knit dresses and elevated event dressing in printed silks.

In men’s, Hoffman said Vince continued to see significant growth across all channels, driven by novelty textured knits and polos. He also pointed to increases across “living categories and sets,” saying head-to-toe dressing helped raise average transaction values. Hoffman said the men’s business remains a significant growth opportunity and that Vince is “on a clear path towards 30% penetration over time.”

Margins improve despite tariff pressure

Chief Financial Officer Yuji Okumura said gross profit in the quarter was $32.4 million, or 50.6% of net sales, compared with $29.2 million, or 50.3% of net sales, a year earlier. The improvement in gross margin was primarily driven by a roughly 130-basis-point benefit from higher pricing and a 100-basis-point benefit from lower discounting, largely offset by the unfavorable impact of higher tariffs.

Selling, general and administrative expenses were $35 million, or 54.7% of net sales, compared with $33.6 million, or 58% of net sales, in the prior-year quarter. Okumura said the increase in SG&A dollars was mainly due to higher benefit costs and higher marketing and advertising expenses.

Vince reported a loss from operations of $2.6 million, compared with a loss from operations of $4.4 million in the same period last year. Okumura said the $1.8 million improvement reflected both top-line growth and operating leverage.

Net interest expense fell to $0.6 million from $0.9 million a year earlier, primarily because of lower debt levels under the company’s revolving credit facility. Vince ended the quarter with long-term debt of $29.1 million.

The company reported a net loss of $2.1 million, or $0.16 per share, compared with a net loss of $4.8 million, or $0.37 per share, in the prior-year quarter. Adjusted EBITDA was negative $1.1 million, compared with negative $3 million last year.

Inventory and tariffs remain in focus

Net inventory was $70.8 million at the end of the first quarter, compared with $62.3 million a year earlier. Okumura said the year-over-year increase was primarily driven by approximately $4.5 million of higher inventory carrying value due to tariffs.

Okumura said the company’s updated outlook reflects the expected net impact of higher input costs and lower reciprocal tariff rates based on current information. While Vince has received a portion of tariff refunds, he said the company is not including tariff refunds in guidance because of uncertainty around the timing and ultimate reimbursement amount.

Company raises fiscal 2026 outlook

Vince said sales trends in the second quarter were running above low double digits quarter to date, though management emphasized a cautious approach because half the quarter remained and macroeconomic volatility persisted.

For the second quarter, Vince expects net sales to increase approximately 10% to 12% from the prior-year period. The company expects adjusted operating income as a percentage of net sales to be approximately 6.5% to 7%, and adjusted EBITDA as a percentage of net sales to be approximately 8% to 8.5%.

For fiscal 2026, Vince now expects net sales to increase approximately 7% to 8% compared with fiscal 2025. It expects adjusted operating income as a percentage of net sales of approximately 4% to 4.5%, and adjusted EBITDA as a percentage of net sales of approximately 5.5% to 6%.

Hoffman said he is “more confident than I’ve ever been in this business,” adding that Vince has “fundamentally raised the bar” over the last 12 months and established a new baseline for growth.

Executives discuss Saks, store remodels and drop ship

During the question-and-answer portion of the call, Hoffman said Vince is in “a much better place” with Saks Global, which includes Saks, Neiman Marcus and Bergdorf Goodman, than it was a year ago. He said Vince planned the business conservatively and down from last year, when Saks represented about 7% of the company’s business, but has been “pleasantly surprised” by the strength of business there.

Hoffman also discussed store renovations, saying Vince plans to upgrade locations including Abbot Kinney in California and Scottsdale this summer without closing the stores. He said the company is looking for ways to renovate with less disruption, given current business momentum.

On drop ship, Hoffman said the initiative is most directly affecting e-commerce by expanding customer choice beyond Vince’s traditional apparel and shoe offering. He said the company recently added handbags, belts and accessories in the second quarter, following the earlier launch of shoes. Hoffman also said Vince continues to receive support from Authentic Brands Group as licenses expand into categories such as home, kids and swim.

Asked about the balance sheet, Hoffman said Vince is comfortable with its revolver availability and said the company is in a position to “play some offense” and make investments in the business, while also evaluating opportunities to extend its platform beyond Vince if they arise.

About Vince NASDAQ: VNCE

Vince Holding Corp. designs, merchandises, and sells luxury apparel and accessories in the United States and internationally. It operates through three segments: Vince Wholesale, Vince Direct-to-Consumer, and Rebecca Taylor and Parker. The company offers a range of women's products, such as cashmere sweaters, silk blouses, leather and suede leggings and jackets, dresses, skirts, denims, pants, t-shirts, footwear, outerwear, and accessories; and men's products comprising t-shirts, knit and woven tops, sweaters, denims, pants, blazers, footwear, and outerwear under the Vince brand.

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