Vince Holding Corp. (VNCE) reported total company net sales decreased 2.1 percent to $57.9 million for the first quarter ended May 3, compared to $59.2 million in the first quarter of fiscal 2024. The year-over-year decline was reportedly driven by store closures and remodels, which negatively impacted the retail store channel in the direct-to-consumer segment.

  • Wholesale segment sales increased 0.1 percent to $30.3 million compared to the first quarter of fiscal 2024.
  • Direct-to-consumer segment sales decreased 4.4 percent to $27.6 million compared to the first quarter of fiscal 2024.

Gross profit was $29.2 million, or 50.3 percent of net sales, compared to gross profit of $29.9 million, or 50.6 percent of net sales, in the first quarter of fiscal 2024. The decrease in gross margin rate was said to be primarily driven by approximately 260 basis points related to higher freight and duty costs, approximately 120 basis points related to wholesale channel mix, and approximately 60 basis points due to higher distribution and handling costs. These factors were said to be partially offset by approximately 330 basis points related to lower product costs and higher pricing and approximately 80 basis points related to lower promotional activity.

Selling, general, and administrative (SG&A) expenses were $33.6 million, or 58.0 percent of sales, compared to $31.9 million, or 54.0 percent of sales, in the first quarter of fiscal 2024. The increase in SG&A dollars was primarily driven by higher marketing and advertising expenses, increased legal, information technology and third-party costs, as well as increased expenses related to remodels and relocations.

Loss from operations was $4.4 million compared to income from operations of $5.6 million in the Q1 period last year. Excluding the Gain on Sale of Subsidiary in the first quarter of fiscal 2024, Adjusted loss from operations in the first quarter of fiscal 2024 was $2.0 million.

  • Income from operations relating to the company’s reportable segments, Vince Wholesale and Vince Direct-to-Consumer, was $8.6 million, compared to $10.1 million in income from operations in the Q1 period last year.

The income tax provision was $0 for the first quarter of fiscal 2025, as the company has year-to-date ordinary pre-tax losses for the interim period and is anticipating annual ordinary pre-tax income for the fiscal year. The company has determined that it is more likely than not that the tax benefit of the year-to-date loss will not be realized in the current or future years, and as such, tax provisions for the interim periods should not be recognized until the company has year-to-date ordinary pre-tax income. The tax provision in the first quarter of fiscal 2025 compares to an income tax benefit of $0.9 million in the same period last year.

Net loss was $4.8 million or a loss of 37 cents per share, compared to net income of $4.4 million or EPS of 35 cents per share in the Q1 period last year. Excluding the Gain on Sale of Subsidiary, the Adjusted net loss was $3.3 million or a loss of 26 cents per share in the first quarter of fiscal 2024.

Adjusted EBITDA was negative $3.0 million compared to negative $1.5 million in the Q1 period last year.

The company ended the quarter with 58 company-operated Vince stores, a net decrease of four stores since the first quarter of fiscal 2024.

Brendan Hoffman, chief executive officer of VNCE said, “I continue to be encouraged by the strong execution and commitment to excellence I see across our organization, and while we are navigating a challenging environment marked by uncertainty, our first quarter performance was relatively in line with our expectations. As an organization, we quickly pivoted all efforts in the latter portion of the quarter to develop and put into action mitigation plans in light of the evolving tariff policies. In short order, we have diversified our supply chain, negotiated with vendors, and leveraged other opportunities to mitigate near-term costs. As we look ahead, we will continue these efforts along with providing customers a high-quality product offering and an engaging experience across our channels.”

Balance Sheet
At the end of the 2025 first quarter, total borrowings under the company’s debt agreements totaled $34.7 million and the company had $20.4 million of excess availability under its revolving credit facility.

Net inventory at the end of the first quarter was $62.3 million compared to $56.7 million at the end of the first quarter of fiscal 2024.

During the quarter ended May 3, 2025, the company did not issue shares of common stock under the ATM program. The company continues to have shares available under the program to exercise with proceeds to be used as sources, along with cash from operations, to fund future growth.

Outlook
For the second quarter of fiscal 2025, the company expects the following:

  • Net sales to be approximately flat to down 3 percent compared to the prior year period.
  • Operating Income as a percentage of net sales to be approximately negative 1 percent to 1 percent.
  • Adjusted EBITDA as a percentage of net sales to be approximately 1 percent to 4 percent.

Given the uncertainty related to the potential impact and duration of the current tariff policy, the company is not providing guidance for the full year fiscal 2025.

Strategic Partnership with Authentic Brands Group
On May 25, 2023, the company announced that it had completed the previously announced transaction with Authentic Brands Group.

In connection with the Authentic Transaction, VNCE entered into an exclusive, long-term license agreement with Authentic for the usage of the contributed intellectual property for VNCE’s existing business in a manner consistent with the company’s current wholesale, retail and e-commerce operations. The License Agreement contains an initial ten-year term and eight ten-year renewal options allowing VNCE to renew the agreement.

Vince Holding Corp. contributed the Vince intellectual property to a newly formed Authentic subsidiary, ABG Vince, of which Authentic owns a 75 percent majority stake, while VNCE retains a 25 percent ownership.

In connection with the acquisition, Authentic also completed an exclusive, long-term agreement with VNCE, which is now the licensing partner for the brand’s core categories, to manage its over 60 retail stores, current wholesale accounts, and e-commerce operations.

Image courtesy Vince Holding Corp.