Net sales amounted to $73.2m for Q2 of fiscal 2024, down from $74.2m in the same period last year.
The decline resulted from a 5.1% decrease in wholesale revenue, which was somewhat mitigated by a 5.5% rise in direct-to-consumer sales.
The wholesale segment's downturn was mainly due to altered timing of fall product shipments, influenced by earlier uncertainties surrounding tariff policies.
Vince chief executive officer Brendan Hoffman said: "We are very proud of our second quarter performance which reflects disciplined execution and strong customer reception to our product offerings especially as we elongated our full-price selling season. As we remain mindful of the dynamic macro environment, our ability to navigate today's challenges while preserving product quality and customer loyalty remains our utmost priority.”
Vince’s overall Q2 FY25 performance
Vince reported a net income of $12.06m, a significant increase from $0.56m in the prior year's quarter.
Its earnings per diluted share were reported at $0.93 for Q2 FY25, up from $0.05 in Q2 FY24.
The company's operating income rose to $11.15m from $1.13m year-over-year.
Gross profit for the quarter stood at $36.94m, an improvement from $35.13m or 47.4% of net sales in Q2 FY24.
Vince's gross margin improvement in the second quarter was largely due to a 340 basis point (bps) gain from reduced product costs and increased prices, along with a 210 basis point benefit from less discounting.
These positive factors were somewhat offset by a 170bps cost associated with elevated tariffs and an additional 100 basis point increase stemming from higher freight expenses.
Selling, general, and administrative expenses decreased to $25.8m or 35.2% of sales from $34.0m or 45.8% of sales in the previous year's quarter.
By the end of Q2 FY25, Vince operated 58 stores, reflecting a net reduction of three stores since Q2 FY24.
Vince's Q3 and FY outlook
Looking ahead to Q3 FY25, Vince anticipates net sales to remain relatively steady or increase by up to 3%.
Adjusted operating income and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) as percentages of net sales are expected to range between 1% to 4% and 2% to 5%, respectively.
The guidance provided takes into account an anticipated increase in tariff costs between $4m and $5m, said the company.
Vince anticipates it will be able to offset about half of these additional expenses through a combination of shifting the country of origin for some products, negotiating with vendors, and implementing targeted price hikes where strategic.
Given the uncertainty related to the potential impact and duration of current tariff policy, Vince is not providing guidance for the full year fiscal 2025.
