Vince Holding Corp. Q3 FY2025 earnings call

• Healthy sales growth across all channels with acceptance of strategic price increases. - E-commerce enhanced with site refresh, AI video, dropship; saw triple-digit site traffic growth and volume increase in dropship launch. - Opened 2 new stores in Nashville and Sacramento; Marylebone store in London continues to exceed expectations. - Wholesale business grew solidly, with holiday collection launch and partnership with Nordstrom. - Strong start to holiday quarter with record Black Friday/Cyber Monday sales in DTC.

Total company net sales for the third quarter increased 6.2% to $85.1 million compared to $80.2 million in Q3 2024. Wholesale channel increased 6.7% and DTC segment increased 5.5%. Gross profit in Q3 was $41.9 million or 49.2% of net sales, down from $40.1 million or 50% in Q3 2024 due to tariffs and freight costs but partially offset by lower discounting and higher pricing. SG&A expenses were $36.5 million or 42.8% of net sales, up from $34.3 million or 42.8% in Q3 2024 due to compensation, benefits, and marketing reinvestment. Operating income was $5.4 million vs $5.8 million in Q3 2024. Net income was $2.7 million vs $4.3 million in Q3 2024.

• Q4 outlook: Total net sales expected to increase ~3%-7% with DTC growth outpacing total; adjusted operating income as % of net sales flat to 2%; adjusted EBITDA as % of net sales 2%-4%. Takes into account ~$4M-$5M incremental tariff costs. - Full year: Net sales growth ~2%-3%; adjusted operating income as % of net sales 2%-3%; adjusted EBITDA as % of net sales 4%-5% despite ~$8M-$9M incremental tariff costs.

• Tariffs impacting gross margin with costs ramping into Q4. - Freight costs increasing due to sourcing shifts and timing. - Supply chain management challenges in navigating tariff environment and maintaining quality.

Q: Talk about licensed product rollout, especially in 2026 and beyond.

A: Dropship launch with Caleres shoes was spectacular; potential to expand other categories on e-commerce and utilize in stores.

Q: Thought process behind new store openings and future store plans.

A: Pleased with Nashville and Sacramento stores; monitoring e-commerce impact; 60 stores now, may add/remove a couple more; looking at Europe for profitable stores.

Q: Bottlenecks or limitations affecting sales, inventory position.

A: Dropship opportunity helps with inventory assortment; inventories in good position.

Q: Revenue growth driven by price vs product volume.

A: Units held steady even with higher price changes, customer trading up; women's units held strong.

Q: Divergence between wholesale and DTC channels in Q4.

A: E-commerce was big driver, but wholesale also strong; working with Saks Global through transformation.

Q: Trends in freight costs and contracts.

A: Freight costs increasing due to sourcing shifts and timing, not just contract pricing.