• Total Revenue: Decreased 4.7% to $80.2 million compared to $84.1 million in Q3 fiscal 2023.
• Direct-to-Consumer Segment Revenue: Decreased 8.3% year-over-year.
• Wholesale Segment Revenue: Decreased 2.2% year-over-year.
• Gross Profit: $40.1 million, representing 50% of net sales, up from 44.2% in the prior year.
• SG&A Expenses: $34.3 million or 42.8% of net sales, compared to 40.9% in the prior year.
• Operating Income: $5.8 million, up from $2.8 million in the prior year.
• Net Income: $4.3 million or $0.34 per share, compared to $1 million or $0.08 per share in the prior year.
• Net Inventory: $63.8 million, down from $69.6 million in the prior year.
• Q4 Fiscal 2024 Revenue Outlook: Expected to be down mid-single digits to up low single digits compared to $75.3 million in the prior year.
• Full Year Fiscal 2024 Revenue Outlook: Expected to decline in the low single-digit range compared to $292.9 million in fiscal 2023.

• Warning! GuruFocus has detected 6 Warning Signs with VNCE.

Release Date: December 10, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Vince Holding Corp (NYSE:VNCE) achieved profitability results in line with prior guidance, driven by gross margin expansion.
• The company saw growth in its full-price customer file, accelerating to the high single-digit range.
• Vince Holding Corp (NYSE:VNCE) experienced strong full-price performance across its wholesale channel.
• The company successfully launched a new Men's Pants program, contributing to the expansion of its men's business.
• Vince Holding Corp (NYSE:VNCE) is ahead of its transformation plan targets for fiscal 2024, focusing on cost efficiencies and geographical diversification.

Negative Points

• Total company net sales decreased by 4.7% compared to the prior year period.
• The direct-to-consumer segment saw an 8.3% decrease in sales, and the wholesale segment experienced a 2.2% decrease.
• Lower than expected in-season reorders in the international wholesale business impacted sales growth.
• The company faced lower than expected sales in its outlet channel due to reduced promotional activity.
• Vince Holding Corp (NYSE:VNCE) remains cautious with its outlook due to the shortened holiday season and ongoing consumer uncertainty.

Q & A Highlights

Q: Can you provide an update on the AVG Vince licensed products and what new categories we might expect next year? A: The licensed products, primarily shoes and cold weather goods, have been performing well. For next year, we will introduce belts and leather goods in the spring, with handbags expected to launch in fall 2025. - David Stefko, Interim Chief Executive Officer

Q: What is the potential for expanding the store base in the US and UK, and how does this impact profitability? A: We see significant opportunities to expand in the US, particularly in the Midwest and Pacific Northwest, based on a study with Cushman & Wakefield. In the UK, we are opening a new store in a prime location. These expansions are expected to drive profitability through full-price selling and strategic inventory investments. - David Stefko, Interim Chief Executive Officer and John Szczepanski, Chief Financial Officer

Q: How is the men's segment performing, particularly with the expansion into Nordstrom stores? A: The men's segment has exceeded 20% of total sales, with positive results from Nordstrom. We are also evaluating the performance of our standalone men's store to inform future strategy. - David Stefko, Interim Chief Executive Officer

Q: Can you elaborate on the financial impact of the transformation plan and full-price selling strategy? A: The transformation plan and full-price selling strategy have led to significant margin improvements. We are investing in the right inventory, which supports balanced offerings and enhances store performance. - John Szczepanski, Chief Financial Officer

Q: What are the expectations for the fourth quarter and full fiscal year 2024? A: For Q4, we expect net sales to be down mid-single digits to up low single digits, with operating margin increasing by 200 to 300 basis points. For the full year, we anticipate a low single-digit decline in net sales and a 25 to 50 basis point increase in adjusted operating margin. - John Szczepanski, Chief Financial Officer

For the complete transcript of the earnings call, please refer to the full earnings call transcript.