Vince Holding Corp. (NYSE:VNCE), a leading global luxury apparel
and accessories brand (“Vince” or the “Company”), today reported
unaudited results for the first quarter of fiscal 2017 ended April
29, 2017.
Brendan Hoffman, Chief Executive Officer, commented, “Our first
quarter results were largely in line with our expectations. As
anticipated, our wholesale business was negatively impacted
primarily due to the elimination of our summer delivery. We saw
sequential improvement in our direct-to-consumer business, led by
ecommerce, and we are seeing this momentum continue into the second
quarter. Looking ahead, we will remain focused on strengthening our
direct-to-consumer business as well as take steps to optimize our
wholesale business as we look to engage consumers across channels.
In addition, we have recently strengthened our design and product
development leadership and are excited about the product
refinements and planned brand enhancements we have underway.
Overall, we believe the Vince brand remains strong and we are
making progress toward driving improved performance.”
For the first quarter ended April 29, 2017:
- Net sales decreased 14.2% to $58.0
million from $67.6 million in the first quarter of fiscal 2016.
Wholesale segment sales decreased 20.9% to $35.4 million, primarily
due to a reduction in full-price orders as a result of the
elimination of the Company’s summer delivery. Direct-to-consumer
segment sales decreased 1.0% to $22.6 million compared to the first
quarter of fiscal 2016. Comparable sales decreased 5.7%, including
e-commerce sales, due to a decrease in average order value.
- Gross profit was $25.6 million, or
44.1% of net sales. This compares to gross profit of $28.3 million,
or 41.8% of net sales, in the first quarter of fiscal 2016. The
increase in the gross profit rate for the first quarter of 2017
reflected a favorable channel mix shift and decreased discounts
from the liquidation of excess inventory in the first quarter of
fiscal 2016, partially offset by higher allowances and supply chain
costs.
- Selling, general, and administrative
expenses were $33.8 million, or 58.2% of sales compared to $31.8
million, or 47.0% of sales, in the first quarter of fiscal 2016.
The growth in SG&A expense for the first quarter of fiscal 2017
was due to increased costs associated with the remediation of the
Company’s new systems, and higher product development, marketing,
and new stores costs, partially offset by a decrease in incentive
compensation, consulting, and temporary labor costs, in addition to
transition, severance, and other strategic costs that did not
reoccur in the first quarter of fiscal 2017.
- Operating loss was $8.2 million,
compared to operating loss of $3.5 million for the first quarter of
fiscal 2016.
- Net loss was $9.3 million, or $0.19 per
share, compared to a net loss of $1.9 million, or $0.05 per share,
for the first quarter of fiscal 2016. The net loss for the first
quarter of 2017 does not include a benefit from income taxes due to
the offsetting impact of the tax valuation allowance.
- The Company ended the quarter with 54
company-operated stores, an increase of three stores since the
first quarter of fiscal 2016.
Balance Sheet
The Company ended the first quarter of 2017 with $15.4 million
in cash and cash equivalents and $66.1 million of borrowings under
its debt agreements. The increase in borrowings under its debt
agreements over the prior year period is due to higher borrowings
under the revolving credit facility.
Gross inventory increased $2.7 million in comparison to the
first quarter of fiscal 2016, while inventory reserves decreased
$6.1 million as a result of less excess and aged inventory. As a
result, net inventory at the end of the first quarter of fiscal
2017 was $32.2 million compared to $23.4 million at the end of the
first quarter of fiscal 2016.
Capital expenditures for the first quarter of fiscal 2017
totaled $1.8 million, primarily attributable to investments in new
retail stores and the Company’s new systems.
2017 First Quarter Earnings Conference
Call
A conference call to discuss the first quarter results will be
held today, June 8, 2017, at 8:30 a.m. ET, hosted by Vince Holding
Corp. Chief Executive Officer, Brendan Hoffman, and Chief Financial
Officer, David Stefko. During the conference call, the Company may
make comments concerning business and financial developments,
trends and other business or financial matters. The Company's
comments, as well as other matters discussed during the conference
call, may contain or constitute information that has not been
previously disclosed.
Those who wish to participate in the call may do so by dialing
(877) 201-0168 conference ID 31871482. Any interested party will
also have the opportunity to access the call via the Internet at
http://investors.vince.com/. To listen to the live call, please go
to the website at least 15 minutes early to register and download
any necessary audio software. For those who cannot listen to the
live broadcast, a recording will be available for 12 months after
the date of the event. Recordings may be accessed at
http://investors.vince.com/.
ABOUT VINCE
Established in 2002, Vince is a global luxury brand best known
for utilizing luxe fabrications and innovative techniques to create
a product assortment that combines urban utility and modern
effortless style. From its edited core collection of ultra-soft
cashmere knits and cotton tees, Vince has evolved into a global
lifestyle brand and destination for both women’s and men’s apparel
and accessories. As of April 29, 2017, Vince products were sold in
prestige distribution worldwide, including approximately 2,300
distribution locations across more than 40 countries. With
corporate headquarters in New York and its design studio in Los
Angeles, the Company operated 40 full-price retail stores, 14
outlet stores and its e-commerce site, vince.com. Please visit
www.vince.com for more information.
This document, and any statements incorporated by reference
herein, contains forward-looking statements under the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include the statements regarding, among other things,
our current expectations about the Company's future results and
financial condition, revenues, store openings and closings,
margins, expenses and earnings and are indicated by words or
phrases such as "may," "will," "should," "believe," "expect,"
"seek," "anticipate," "intend," "estimate," "plan," "target,"
"project," "forecast," "envision" and other similar phrases.
Although we believe the assumptions and expectations reflected in
these forward-looking statements are reasonable, these assumptions
and expectations may not prove to be correct and we may not achieve
the results or benefits anticipated. These forward-looking
statements are not guarantees of actual results, and our actual
results may differ materially from those suggested in the
forward-looking statements. These forward-looking statements
involve a number of risks and uncertainties, some of which are
beyond our control, including, without limitation: our ability to
maintain adequate cash flow from operations or availability under
our revolving credit facility to meet our liquidity needs
(including our obligations under the Tax Receivable Agreement with
the Pre-IPO Stockholders); our ability to continue as a going
concern; our ability to successfully operate the newly implemented
systems, processes, and functions recently transitioned from
Kellwood Company; our ability to remediate the identified material
weaknesses in our internal control over financial reporting; our
ability to regain compliance with the continued listing standards
of the New York Stock Exchange; our ability to commence and
complete a potential rights offering; our ability to ensure the
proper operation of the distribution facility by a third party
logistics provider recently transitioned from Kellwood; our ability
to remain competitive in the areas of merchandise quality, price,
breadth of selection, and customer service; our ability to
anticipate and/or react to changes in customer demand and attract
new customers, including in connection with making inventory
commitments; our ability to control the level of sales in the
off-price channels; our ability to manage excess inventory in a way
that will promote the long-term health of the brand; changes in
consumer confidence and spending; our ability to maintain projected
profit margins; unusual, unpredictable and/or severe weather
conditions; the execution and management of our retail store growth
plans, including the availability and cost of acceptable real
estate locations for new store openings; the execution and
management of our international expansion, including our ability to
promote our brand and merchandise outside the U.S. and find
suitable partners in certain geographies; our ability to expand our
product offerings into new product categories, including the
ability to find suitable licensing partners; our ability to
successfully implement our marketing initiatives; our ability to
protect our trademarks in the U.S. and internationally; our ability
to maintain the security of electronic and other confidential
information; serious disruptions and catastrophic events; changes
in global economies and credit and financial markets; competition;
our ability to attract and retain key personnel; commodity, raw
material and other cost increases; compliance with domestic and
international laws, regulations and orders; changes in laws and
regulations; outcomes of litigation and proceedings and the
availability of insurance, indemnification and other third-party
coverage of any losses suffered in connection therewith; tax
matters; and other factors as set forth from time to time in our
Securities and Exchange Commission filings, including under the
heading "Item 1A—Risk Factors" in our Annual Report on Form 10-K
and our Quarterly Reports on Form 10Q. We intend these
forward-looking statements to speak only as of the time of this
release and do not undertake to update or revise them as more
information becomes available, except as required by law.
This press release is also available on the Vince Holding Corp.
website (http://investors.vince.com/).
Exhibit (1)
Vince Holding Corp. and
Subsidiaries
Condensed Consolidated Statements of
Operations
(Unaudited, amounts in thousands
exceptpercentages, share and per share data)
Three Months Ended April
29, April 30, 2017 2016 Net
sales $ 58,045 $ 67,645 Cost of products sold 32,454
39,387 Gross profit 25,591 28,258 as a % of net sales 44.1 % 41.8 %
Selling, general and administrative expenses 33,784
31,806 as a % of net sales 58.2 % 47.0 % Loss from operations
(8,193 ) (3,548 ) as a % of net sales (14.1 )% (5.2 )% Interest
expense, net 1,044 881 Other expense, net 1 160 Loss
before income taxes (9,238 ) (4,589 ) Provision (benefit) for
income taxes 52 (2,665 ) Net loss $ (9,290 ) $ (1,924
)
Loss per share: Basic loss per share $ (0.19 ) $ (0.05 )
Diluted loss per share $ (0.19 ) $ (0.05 )
Weighted average
shares outstanding: Basic 49,428,259 38,002,774 Diluted
49,428,259 38,002,774
Exhibit (2)
Vince Holding Corp. and
Subsidiaries
Condensed Consolidated Balance
Sheets
(Unaudited, amounts in
thousands)
April 29, January
28, April 30, 2017 2017 2016
ASSETS Current assets: Cash and cash equivalents $ 15,391 $
20,978 $ 21,563 Trade receivables, net 20,292 10,336 17,152
Inventories, net 32,213 38,529 23,367 Prepaid expenses and other
current assets 2,868 4,768 10,863 Total
current assets 70,764 74,611 72,945 Property and equipment, net
42,017 42,945 39,836 Intangible assets, net 77,548 77,698 108,896
Goodwill 41,435 41,435 63,746 Deferred income taxes and other
assets 2,518 2,791 94,830 Total assets $
234,282 $ 239,480 $ 380,253
LIABILITIES AND STOCKHOLDERS'
(DEFICIT) EQUITY Current liabilities: Accounts payable $ 25,016
$ 37,022 $ 20,956 Accrued salaries and employee benefits 2,671
3,427 2,358 Other accrued expenses 10,739 9,992
13,898 Total current liabilities 38,426 50,441 37,212
Long-term debt 64,395 48,298 42,613 Deferred rent 16,670 16,892
16,217 Other liabilities 137,830 137,830 140,854 Stockholders'
(deficit) equity (23,039 ) (13,981 ) 143,357
Total liabilities and stockholders' (deficit) equity $ 234,282 $
239,480 $ 380,253
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version on businesswire.com: http://www.businesswire.com/news/home/20170608005376/en/
Investor Relations:ICR, Inc.Jean Fontana,
646-277-1200Jean.fontana@icrinc.com
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