For the second quarter ended Aug. 3, Vince’s net sales were $74.2 million — a 6.8 percent increase compared with fiscal year 2023’s second quarter.
Net income was $600,000 or 5 cents per diluted share compared to net income of $29.5 million or $2.36 per share in the same period last year. The second quarter of fiscal 2023 included one-time items related to the Vince IP sale and transaction expenses.
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The year-over-year sales uptick was due to a 7 percent increase in Vince brand sales that was fueled by a 29.6 percent increase in the wholesale channel. That was attributed to earlier-than-anticipated shipments of fall products and “the normalization of the off-price business” within the channel, the company said.
Vince said that the upswing in the wholesale sector “more than offset” the 18.1 percent decline in direct-to-consumer sales, which continued to be impacted by the reduction in promotional activity and store closures. The prior year period total company net sales included $100,000 in Rebecca Taylor and Parker segment sales.
Vince’s board of directors authorized a stock repurchase program Monday of up to $1 million of VNCE common stock, par value 1 cent per share. The stock repurchase program does not obligate the company to acquire any particular amount of common stock, and it may be modified, extended or terminated by the board of directors at any time. The company expects to fund the repurchases through cash on hand and future cash flow from operations.
Vince’s interim chief executive officer David Stefko said the company was pleased with its most recent results that were driven by wholesale, its ongoing focus on full-priced selling and “disciplined expense management” of its core operating cost structure, “which helped to partially offset the expected headwinds from ongoing royalty expenses as well as the re-establishment of our incentive compensation program.”
He attributed the company’s wholesale strength due partially to being able to fulfill demand earlier than expected and that helped “to offset softer performance in our direct-to-consumer channel which was impacted by store closures and our strategic decision to continue to pull back on promotional activity.”
Looking ahead to the rest of the year, Stefko said the company was taking a more prudent approach to its direct-to-consumer outlook as it continues to execute its strategy “amidst an increasingly uncertain macroeconomic backdrop. Our outlook for our wholesale channel remains unchanged and our increased expectations for profitability underscore our commitment to operating a stronger full-price business model.”