US' Vince Holding reports 6.8% sales growth in Q2 2024

Gross profit rose to $35.1 million, representing 47.4 per cent of net sales, compared to 46.6 per cent last year, benefitting from lower product and freight costs. However, income from operations dropped significantly to $1.1 million, down from $32.9 million in 2023, which had included a one-time $32 million gain from the sale of Vince intellectual property.

Vince continues to face challenges in its direct-to-consumer segment, which saw a net reduction of five stores since the same quarter last year. The company remains cautious in its outlook for the remainder of 2024, anticipating flat to low single-digit declines in net sales for the third quarter. However, the wholesale channel is expected to maintain its strong performance.

For the full year, Vince projects a slight decrease in total company net sales and an improvement in operating margins, as it navigates an uncertain economic environment with a focus on profitability and a full-price business model.

David Stefko, interim chief executive officer of Vince said: “We are pleased with our second quarter results driven by strong performance in our wholesale channel, ongoing focus on full price selling and disciplined expense management of our core operating cost structure which helped to partially offset the expected headwinds from ongoing royalty expenses as well as the re-establishment of our incentive compensation programme. The strength in our wholesale channel was driven in part by our ability to fulfil demand earlier than expected and helped to offset softer performance in our direct-to-consumer channel which was impacted by store closures and our strategic decision to continue to pull back on promotional activity.

“As we look ahead to the remainder of the year, while we are taking a more prudent approach to our outlook for direct-to-consumer sales as we continue to execute our strategy amidst an increasingly uncertain macroeconomic backdrop, our outlook for our wholesale channel remains unchanged and our increased expectations for profitability underscore our commitment to operating a stronger full price business model.”

ALCHEMPro News Desk (KD)