Despite the overall decrease in sales, Vince Holding reported a significant improvement in its gross profit, which stood at $37.2 million or 44.2 per cent of net sales. This marks a notable increase from the $29.8 million or 30.2 per cent of net sales recorded in the third quarter of fiscal 2022. The company’s selling, general, and administrative expenses also saw a decrease, amounting to $34.4 million or 40.9 per cent of sales, compared to $39.2 million or 39.8 per cent of sales in the same period last year, the company said in a media release.
Vince Holding Corp reported a 14.7 per cent decrease in Q3 FY23 net sales, offset by increased profits and reduced expenses.
The decline was due to winding down Rebecca Taylor and Parker segments, while Vince brand saw modest sales dips.
The company’s income from operations was $2.8 million, a significant turnaround from a loss of $9.4 million in Q3 FY22.
A key highlight from the report is the company’s income from operations, which was $2.8 million, a significant turnaround from a loss of $9.4 million in the third quarter of fiscal 2022. The adjusted income from operations, excluding Transaction Expenses, was even higher at $3.1 million.
In terms of net income, Vince Holding experienced a positive shift, reporting a net income of $1.0 million or $0.08 per diluted share. This is in stark contrast to the net loss of $5.2 million or $0.43 per share seen in the third quarter of the previous year.
The company ended the quarter with 66 company-operated Vince stores, indicating a net decrease of one store since the third quarter of fiscal 2022.
Breaking down the company’s performance by segments, the Vince brand itself witnessed a 6.2 per cent decrease in net sales, amounting to $84.1 million. The wholesale segment sales decreased by 9.4 per cent to $49.8 million, while the direct-to-consumer segment sales saw a minor decrease of 1.2 per cent to $34.2 million. However, income from operations, excluding unallocated corporate expenses, showed a slight improvement, standing at $15.1 million compared to $15.0 million in the same period last year.
The report also touched upon the Rebecca Taylor and Parker Segment, highlighting the company’s strategic decision made on September 12, 2022, to wind down the Rebecca Taylor business to focus on the Vince brand. This wind down is now substantially completed, resulting in a 100 per cent decrease in net sales for this segment, which stood at $0.0 million, compared to the same quarter in the previous fiscal. The loss from operations in this segment was approximately $0.0 million, a substantial improvement from a loss of $13.2 million in the same period last year.
“We are pleased with our third quarter performance and the sequential improvement we delivered compared to the prior quarter despite incurring the first full period of royalty expenses. We are in the early stages of implementing our transformation programme which we expect to yield significant cost savings over the next three years to help to offset the changes to our cost structure given the royalty fees with our partnership with Authentic Brands Group,” said Jack Schwefel, chief executive officer of Vince Holding.
Fibre2Fashion News Desk (DP)