Vince Holding Corp. Q4 FY2025 earnings call

• Brendan Hoffman emphasized the strong operating results in the fourth quarter, with direct-to-consumer sales up ~10% and overall sales up nearly 5% with profitability outpacing guidance. Noted the headwind from Saks Global but confidence in the new leadership team. • Highlighted efforts to mitigate tariff pressures by diversifying sourcing, strategic pricing, and maintaining product quality. • For fiscal 2026, plans include investing in customer experience in direct-to-consumer, scaling men's business, expanding international presence (e.g., potential Paris flagship), and leveraging the platform to support additional brands. • Partnerships with ABG and wholesale partners like Nordstrom and Bloomingdale's for brand events and storytelling.

For the fourth quarter, total company net sales increased 4.7% to $83.7 million compared to $80 million in the fourth quarter of fiscal 2024. The direct-to-consumer segment saw a 10.4% increase, driven by strong e-commerce and store performances, while the wholesale channel declined 1.2% mainly due to pausing shipments to Saks Global. Gross profit in the fourth quarter was $41.1 million, which is 49.1% of net sales, compared to $40.1 million or 50.1% of net sales in the same period last year. Selling, general and administrative expenses in the quarter were $44 million, 52.6% of net sales, up from $37.8 million, 47.2% of net sales last year. For the full year, net sales grew by over 2% and adjusted EBITDA grew by about 8% despite $8 million of incremental tariff costs. Men's business ended the year representing approximately 24% of total sales with opportunity to expand to 30% penetration. The second London store exceeded expectations, and the company is exploring additional flagship opportunities in Paris.

• First quarter expected net sales growth of approximately 8.5% to 10.5%, adjusted operating loss as a percentage of net sales of approximately negative 3.5% to negative 4.5%, and adjusted EBITDA as a percentage of net sales of approximately negative 1.5% to negative 2.5%. • Full year fiscal 2026 expected net sales growth of approximately 3% to 6%, adjusted operating income as a percentage of net sales of approximately 3.5% to 4%, and adjusted EBITDA as a percentage of net sales of approximately 5% to 5.5%.

Q: Talk about how stores will tweak to showcase new categories in 2026.

A: Continuing to experiment with store setups, like pulling out legacy cash wraps to showcase product mixing, and using drop ship categories such as handbags, suitings, accessories in stores to provide interest.

Q: Thoughts on domestic and international stores post-tariffs.

A: Bullish on U.S. stores with potential to add a few stores and rationalize existing ones; internationally, looking at Paris as the next flagship after the successful London store.

Q: How should we think about wholesale evolution?

A: Nordstrom and Bloomingdale's are driving the wholesale business, and hopeful for Saks Global to get back on track.

Q: Seeing mall traffic trend.

A: Seeing a positive trend with strong performance in stores driven by traffic, conversion, and absorbed price increases.

Q: Where is the most untapped operating leverage and internal bottlenecks?

A: Opportunity to recapture gross margin accretion as macro issues subside, expect SG&A leverage with growth, and leverage the platform in partnerships.