Despite the decline in net sales, the company’s gross profit increased as a percentage of net sales, reaching $32.3 million or 46.6 per cent, compared to 40.8 per cent or $36.4 million during the same period in the previous fiscal. Meanwhile, selling, general, and administrative expenses were lower, at $31.5 million or 45.4 per cent of sales, as against 43.7 per cent or $39 million recorded in Q2 FY22.
Vince Holding Corp reported a 22.1 per cent YoY decrease in Q2 FY23 net sales at $69.4 million, primarily due to the wind down of its Rebecca Taylor business.
However, gross profit margin improved to 46.6 per cent, and the company posted a net income of $29.5 million.
The firm ended the quarter with 66 Vince stores, one fewer than in Q2 FY22.
Income from operations stood at $32.9 million in Q2 FY23, an improvement from a loss of $5.2 million in Q2 FY22. The net income was reported at $29.5 million, equivalent to $2.36 per diluted share, in contrast to a net loss of $15 million or a loss of $1.23 per share documented in the comparable period last year, the company said in a media release.
Delineating the performance of the Vince brand specifically, the net sales witnessed a drop of 14.3 per cent to settle at $69.3 million in Q2 FY23. The wholesale segment sales faced a reduction of 22 per cent to total $36.4 million, while the direct-to-consumer segment sales were down 3.7 per cent, amounting to $32.9 million. However, when excluding unallocated corporate expenses, the income from operations was slightly higher at $12.5 million compared to $12.2 million recorded in Q2 FY22.
The company had initiated a strategic reorientation on September 12, 2022, deciding to gradually wind down the Rebecca Taylor business and centralise its focus and resources on bolstering the Vince brand. The initiative has now largely concluded. The ramifications of this move were clearly visible in the Rebecca Taylor and Parker segment’s net sales, which plummeted by a staggering 98.7 per cent to a meagre $0.1 million. Conversely, this segment reported an income from operations amounting to $1.3 million, a positive shift from a loss of $5.5 million registered in the same quarter of the preceding fiscal year.
As the quarter concluded, Vince Holding Corp was operating 66 Vince stores, representing a net decrement of one store since Q2 FY22.
“Our second quarter sales performance was impacted by the ongoing macro-related headwinds as well as our strategic decision to pull back on the off-price wholesale business as our inventory balance has normalised compared to last year. We are encouraged by the improvement in trend we delivered in our direct-to-consumer channel during the period and have maintained this momentum as we have entered the start of the third quarter. We continue to believe we are well positioned to execute our initiatives and deliver on our objectives,” said Jack Schwefel, chief executive officer.
Fibre2Fashion News Desk (DP)