VINCE’S RESULTS COME IN BELOW EXPECTATIONS, AS ‘SUBSTANTIAL DOUBT’ IT WILL REMAIN IN BUSINESS MOUNTS
Luxury apparel and accessories brand Vince Holding Corp. which announced earlier this month that it was delaying the release of its financial results for the fourth quarter and fiscal year ended January 28, 2017, has now released that information. The company is also still assessing whether it has the ability to continue as a going concern within one year of the release of these results, and is suspending sales and EPS guidance for the coming year.
For the fourth quarter, net sales decreased 21.9 percent to $63.9 million from $81.8 million in the fourth quarter of fiscal 2015. Wholesale segment net sales decreased 28.4 percent to $34.4 million primarily due to a reduction in both off-price and replenishment orders, as well as an increase in allowances. Direct-to-consumer segment net sales decreased 12.6 percent to $29.4 million compared to the fourth quarter of fiscal 2015. Comparable sales decreased 20.5 percent, including e-commerce sales, as a result of declines in the number of transactions, due to reduced traffic, and a decrease in average order value. Net loss was $162.1 million, or $3.28 per share, as compared to net income of $1.8 million, or $0.05 per diluted share, for the fourth quarter of fiscal 2015.
For the fiscal year, net sales decreased 11.3 percent to $268.2 million from $302.5 million during fiscal year 2015. Wholesale segment net sales decreased 15.5 percent to $170.1 million and direct-to-consumer segment net sales decreased 3.1 percent to $98.1 million compared to fiscal year 2015. Comparable store sales decreased 16.2 percent compared to the prior year period, including e-commerce sales. Net loss was $162.7 million, or $3.50 per share, as compared to net income of $5.1 million, or $0.14 per diluted share, in fiscal 2015.
“Results for the fourth quarter came in below our expectations, due primarily to challenges related to our systems conversion, which led to delayed shipments of spring product and off-price shipments, as well as lower than expected performance in our pre-spring collection,” said CEO Brendan Hoffman. “Despite these recent challenges, we are encouraged by the improved performance we have seen in our direct-to-consumer channel in the first quarter, led by our e-commerce business as a result of enhancements we have made to the website and the positive response that we have driven with our marketing and social media efforts. Overall, 2016 was largely a year for us to reset and transition the business, as we have made great strides to establish a foundation from which we can build Vince in a sustainable way.”
Added Marc Leder, chairman of the Vince Board of Directors, stated, “We believe that Vince remains a strong brand with a loyal customer following. While we recognize that the apparel industry remains challenging and there is still work to be done, we believe that the management team has made important strides in resetting the brand and we continue to support efforts to drive improved performance in the business.”
