Vince Holding Corp. Reports Q3 Fiscal 2024 Results with Increased Net Income Despite Sales Decline

Vince Holding Corp. reported its financial results for the third quarter of fiscal 2024, revealing a net income of $4.3 million, or $0.35 per share, compared to a net income of $983,000, or $0.08 per share, in the same period last year. The company’s net sales for the quarter were $80.2 million, a decrease of 4.7% from $84.1 million in the prior year. Despite the decline in sales, gross profit increased by 7.7% to $40.1 million, resulting in a gross margin of 50.0%, up from 44.2% in the previous year. This improvement was attributed to lower product costs, reduced promotional activity, and higher pricing.

For the nine months ended November 2, 2024, Vince Holding reported total revenues of $213.5 million, down 1.9% from $217.6 million in the same period last year. The company’s gross profit for the nine-month period rose to $105.1 million, reflecting a gross margin of 49.2%, compared to 45.6% in the prior year. The increase in gross profit was driven by lower promotional activity and improved product costing, although it was partially offset by higher royalty expenses related to the company's licensing agreement with Authentic Brands Group.

Strategically, Vince Holding has undergone significant changes, including the sale of its intellectual property assets related to the Vince brand to Authentic Brands Group in May 2023. This transaction provided the company with $76.5 million in cash and a 25% equity interest in the new entity, ABG Vince. Additionally, the company completed the sale of its Rebecca Taylor brand in May 2024, which resulted in a gain of $7.6 million. The company has also focused on streamlining operations and reducing costs as part of its transformation program aimed at enhancing profitability.

Operationally, Vince Holding has seen a decrease in its direct-to-consumer segment, with net sales falling by 11.5% to $87.3 million for the nine months ended November 2, 2024. The decline was attributed to reduced retail traffic and the closure of five stores, bringing the total store count to 61. Conversely, the Vince Wholesale segment experienced a 6.3% increase in sales, reaching $126.2 million, driven by higher full-price shipments. The company’s total assets increased to $254.7 million as of November 2, 2024, compared to $225.1 million at the end of the previous fiscal period.

Looking ahead, Vince Holding Corp. anticipates continued challenges in the retail environment but remains focused on executing its strategic initiatives to improve profitability and operational efficiency. The company is committed to maintaining adequate liquidity through its revolving credit facility and expects to generate sufficient cash flows to meet its obligations in the coming year. However, the company has acknowledged a material weakness in its internal controls over financial reporting, which it is actively working to remediate.