VINCE HOLDING CORP. Q4 FY2024 earnings call

• Brendan returned as CEO and is proud of the team's progress, operational efficiency, and product resonance. Fourth quarter was better than expected with wholesale offsetting retail softness, double-digit growth in full-price customers in DTC channels, 9% growth in highest customer spending tier, strength in sweaters and bottoms assortments. Wholesale relationships are strong with growth in men's business. Actively working on tariff mitigation strategies like diversifying sourcing, evaluating price increases. Transformation plan delivered over $10 million in savings in fiscal 2024.
• Yuji discussed fiscal 2024 financial results, including net sales, gross profit, SG&A expenses, goodwill impairment charge, and net loss. Mentioned balance sheet details and outlook for fiscal 2025 first quarter.

In the fourth quarter, the company's net sales increased 6.2% to $80 million compared to $75.3 million in the fourth quarter of fiscal 2023. Excluding the impact from the extra week, total company net sales for the fourth quarter increased approximately 9% compared to the prior year. The Wholesale segment delivered a 26.7% increase, while the direct-to-consumer segment had an 8.1% decrease. Gross profit in the fourth quarter was $40.1 million or 50.1% of net sales, an increase from $34.2 million or 45.4% of net sales in the same period last year. Selling and general and administrative expenses were $37.8 million or 47.2% of net sales, compared to $35.8 million or 47.6% of net sales in the prior year.

• Will not provide full year guidance. For the first quarter of fiscal 2025, expect sales to decline approximately 5% compared to prior year, driven by timing of wholesale shipments and store activity. Adjusted operating margin is expected to decline approximately 500 basis points compared to the prior year period, largely due to lower sales, increased marketing spend, and expenses related to store relocations and remodels.

• Uncertainty of tariff policies which could impact consumer behavior. Potential SKU reduction due to efforts to avoid China tariffs and adjust sourcing. Impact of macro environment on consumer behavior and store sales performance.

Q: Congratulations on coming back, Brendan. When you look at new products, new expansions and store count, how should we think about it?

A: Excited about category evolution, credit to Authentic Brands Group. Enthusiastic about potential store expansions in U.S. (Sacramento, Nashville) and London.

Q: Can you quantify how much of the revenue shift in wholesale there was into the fourth quarter?

A: Yuji responded that the shift in fourth quarter wasn't material compared to Q1 '25.

Q: Has the tariff issue changed any of your plans for product introductions or current products?

A: Tariff issue is a work in progress, team is moving production to other parts of Asia, there will be some SKU reduction.

Q: One of your strategies was to decrease cost, was to shift from air freight to ship freight. Has that strategy changed?

A: Mostly both air and boat, will continue to assess as situation evolves.