VINCE REPORTS ANOTHER TOUGH QUARTER
Contemporary sportswear brand Vince Holding Corp. has reported its unaudited results for the third quarter of fiscal 2016 ended October 29, 2016.
Net sales decreased 6 percent to $76 million from $80.9 million in the third quarter of fiscal 2015. Wholesale segment net sales decreased 9.4 percent to $51.2 million primarily driven by a planned reduction in off-price orders. Direct-to-consumer segment net sales increased 1.6 percent to $24.8 million compared to the third quarter of fiscal 2015. Comparable sales decreased 11.7 percent, including e-commerce sales, as a result of a decline in the average order value as well as the decline in the number of transactions, due to lower traffic and a reduction in promotional activity.
Gross profit was $38 million, or 50.0 percent of net sales. This compares to gross profit of $40 million, or 49.5 percent of net sales, in the third quarter of fiscal 2015, which included a $2 million benefit from the recovery on inventory write-downs taken in the second quarter of 2015. Excluding this benefit, gross profit was $38 million, or 47 percent of net sales, in the third quarter of 2015. The increase in the gross profit rate for the third quarter of 2016 reflected fewer allowances and discounts, as well as a favorable channel mix shift, partially offset by unfavorable year-over-year adjustments to inventory reserves.
“We were pleased with the initial favorable response to our fall collection which was developed under the leadership of our returning founders,” said Brendan Hoffman, chief executive officer. “The feedback from our wholesale partners was also highly encouraging, and even more importantly, Rea and the team are energized by how much we’ve learned from this delivery and are excited to move forward. Our third quarter sales results are reflective of continued challenges in the retail industry, in addition to the impact of warm weather, although we managed to meaningfully expand our gross margin rate as we focused on full-price selling.”
Hoffman continued, “Despite the continuation of macro headwinds, we remain confident in our belief that we are taking the brand in the right direction with a fashion assortment that combines urban utility and modern effortless style. Looking ahead, while we are reducing our guidance, we continue to see significant long term growth opportunity as we gain market share within the wholesale channel and expand our direct to consumer presence both in our retail stores and online.”