Vince Holding Corp, a leading global contemporary group (“Vince” or the “Company”) recently reported its financial results for the second quarter 2021 which ended on July 31, 2021. In the press release, the Company is presenting its historical financial results in conformity with U.S. generally accepted accounting principles (“GAAP”) as well as on an “adjusted” basis. Adjusted results presented in this press release are non-GAAP financial measures.
During the second quarter which ended on July 31, 2021,
- Net sales increased 112.5% to $78.7 million as compared to $37.0 million in the same period last year reflecting a 108.5% increase in Vince brand sales and a 139.4% increase in Rebecca Taylor and Parker.
- Gross margin rate was 45.0% compared to 36.0% in the same period last year.
- Income from operations was $2.6 million compared to a loss from operations of $14.0 million in the same period last year.
- Net loss was $0.6 million or $0.05 per share compared to a net loss of $15.1 million or $1.28 per share in the same period last year.
Jack Schwefel, Chief Executive Officer, commented, “We are pleased with our performance in the quarter, particularly with the Vince brand approaching pre-pandemic levels driven by strength in our direct-to-consumer business. The brand continues to resonate with both women and men with sophisticated, high-quality assortments. Going forward, we will continue to focus on accelerating direct-to-consumer as well as our growth strategies of building out our ecommerce capabilities, strengthening brand awareness through marketing, and accelerating growth in men’s. At Rebecca Taylor, we remain encouraged by the long-term potential we see for this brand as we continue to leverage the same strategies that made the Vince brand turnaround so successful.”
During the 2nd quarter;
- Total Company net sales increased 112.5% to $78.7 million compared to $37.0 million in the second quarter of fiscal 2020.
- Gross profit was $35.4 million, or 45.0% of net sales, compared to gross profit of $13.3 million, or 36.0% of net sales, in the second quarter of fiscal 2020. The increase in the gross margin rate was primarily due to channel mix, lower year-over-year adjustments to inventory reserves, and lower promotional activity in the direct-to-consumer channel.
- Selling, general, and administrative expenses, were $32.7 million, or 41.6% of sales, compared to $27.3 million, or 73.9% of sales, in the second quarter of fiscal 2020. The increase in SG&A dollars was primarily the result of higher payroll and compensation expense, increased investments in marketing as well as higher consulting and other third-party costs.
- Income from operations was $2.6 million compared to a loss from operations of $14.0 million in the same period last year.
- Income tax expense was $1.3 million as a result of the non-cash deferred tax expense created by the current period amortization of indefinite-lived goodwill and intangible assets for tax but not for book purposes
- Net loss was $0.6 million or $0.05 per share compared to a net loss of $15.1 million or $1.28 per share in the same period last year.
- The Company ended the quarter with 78 company-operated Vince and Rebecca Taylor stores, a net increase of 10 stores since the second quarter of fiscal 2020.
At the end of the second quarter of fiscal 2021, total borrowings under the Company’s debt agreements totalled $87.3 million and the Company had $34.4 million of excess availability under its revolving credit facility.
