Brief Overview on Company’s Performance: Vince Holding Corp. (NYSE: VNCE)

On Friday, Shares of Vince Holding Corp. (NYSE: VNCE) declined -0.22% to $13.55. The stock grabbed the investor’s attention and traded 13,989 shares as compared to its average daily volume of 50.73K shares. The stock’s institutional ownership stands at 78.90%.

For the second quarter ended August 4, 2018:

  • Net sales increased 3.8% to $63.10M contrast to $60.80M in the second quarter of fiscal 2017. Wholesale segment sales reduced 3.6% to $37.80M as contrast to the same period last year, as expected, because of the streamlining of the Company’s full-price department store business. Direct-to-consumer segment sales increased 17.2% to $25.30M contrast to the second quarter of fiscal 2017. Comparable sales increased 14.4%, counting e-commerce.
  • Gross profit was $27.70M, or 43.9% of net sales, contrast to gross profit of $25.60M, or 42.0% of net sales in the second quarter of fiscal 2017, a 190 basis point increase. The gross profit rate benefited from lower supply chain costs and the favorable impact of channel mix; partially offset by an unfavorable impact from year-over-year adjustments to inventory reserves.
  • Selling, general, and administrative expenses were $30.10M, or 47.7% of sales, contrast to $34.40M, or 56.6% of sales, in the second quarter of fiscal 2017. The lower SG&A spend for the second quarter of fiscal 2018 was mainly the result of the non-recurrence of investments made last year related to the remediation and optimization of the systems implemented during fiscal 2016, a decrease in severance costs, and a reduction in product development costs.
  • Operating loss was $2.40M, contrast to operating loss of $8.90M for the second quarter of fiscal 2017.
  • Net loss was $3.80M, or $0.33 per share, contrast to a net loss of $10.10M, or $2.05 per share for the second quarter of fiscal 2017. The Company ended the quarter with 58 company-operated stores, a net increase of three stores since the second quarter of fiscal 2017.

Balance Sheet:

The Company ended the second quarter of fiscal 2018 with $5.30M in cash and cash equivalents and $64.40M of borrowings under its debt agreements. The Company reduced borrowings under its debt agreements since the same period last year by $9.10M, mainly because of $160M of payments to the term loan facility; partially offset by a boost in revolving credit facility, used to fund working capital needs.

On August 21, 2018, the Company refinanced its existing term loan facility and revolving credit facility by entering into a new $27.50M senior secured term loan facility and a new $800M senior secured revolving credit facility.

The new revolving credit facility is $10.0M higher than the previous facility and carries a slightly improved interest rate of either  LIBOR plus 1.5% to 2% or the prime rate plus 0.5% to 1%.

Post refinancing the Company had $67.10M of borrowings under its debt agreements and opening availability of $26.70M under its revolving credit facility.

Net inventory at the end of the second quarter of fiscal 2018 was $61.60M contrast to $41.80M at the end of the second quarter of fiscal 2017. The increase in inventory was mainly because of an earlier receipt of inventory for the fall season, the planned product returns from exited wholesale partners, the growth of the replenishment program, and the reinstatement of the Company’s summer collection.

Capital expenditures for the second quarter of fiscal 2018 totaled $0.80M.

Fiscal 2018 Outlook:

For fiscal 2018 the Company anticipates:

  • Net sales to be between $273.0M and $280.0M. This compares to net sales of $272.60M in fiscal 2017.
  • Operating income to be between $3.0M and $7.0M. This compares to stated operating loss of $18.30M in fiscal 2017, which included a $5.10M non-cash asset impairment charge related to property and equipment of certain retail stores.

VNCE has a market value of $164.77M while its EPS was booked as $-1.03 in the last 12 months. The stock has 12.16M shares outstanding. In the profitability analysis, the company has gross profit margin of 45.70% while net profit margin was 25.30%. Beta value of the company was 1.72; beta is used to measure riskiness of the security. Analyst recommendation for this stock stands at 3.00.

Marion Frost

Marion Frost

I am Marion Frost and I have over 16 years experience in the financial services industry giving me a vast understanding of how news affects the financial markets. I am an active day trader spending the majority of my time analyzing earnings reports and watching commodities and derivatives. I have a Masters Degree in Economics from Westminster University with previous roles counting Investment Banking.

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