Vince expects Q1 2025 sales dip as Q4 finishes strongly

Luxury apparel and accessories brand Vince (VNCE) has reported net sales of $293.45m for the fiscal 2024 (FY24), up 0.2% from $292.89m the fiscal 2023 (FY23).

This growth was driven by company's wholesale channel, which experienced a 10.5% surge in sales, totalling $165.35m, while the direct-to-customer channel saw a 10.4% decline.

Gross profit of Vince for the firm stood at $145.18m, representing 49.5% of net sales, an increase from the prior year's $133.29m, or 45.5% in FY23.

The enhancement in gross margin was attributed to a roughly 330 basis point improvement due to reduced promotional activities and discounting, along with approximately 320 basis points owing to decreased product costs and freight expenses.

However, these were partially counterbalanced by about 150 basis points in royalty expenditures linked to the Licensing Agreement.

The company’s selling, general, and administrative expenses climbed to $138.12m in FY24 from $134.48m in FY23, largely due to higher compensation costs and increased rent and occupancy expenses resulting from lease modifications initiated in fiscal 2023.

Vince recorded an operating loss of $17.18, a significant shift from the operating income of $31.62m reported in the previous year.

Net loss for the fiscal year stood at $19.0m, equating to a loss per share of $1.51.

In the fourth quarter alone, Vince's net sales rose by 6.2% to $79.95m compared to $75.31m in the same quarter of fiscal 2023.

Gross profit for the quarter also increased to $40.08m from the fourth quarter's gross profit of $34.17m in fiscal 2023.

VNCE CEO Brendan Hoffman said: "Since returning to the CEO role earlier this year, my initial observations of the company have been reinforced. I've been impressed by the resilience and depth of our leadership team and by the progress that has been made in strengthening the foundation and overall business model.

“The stronger than expected end to the year is also a testament to the team, the quality product offerings that they have delivered that have continued to resonate with customers, as well as improvements in operational efficiencies from our transformation initiatives.”

Looking ahead to the first quarter of fiscal 2025, Vince anticipates a roughly 5% decrease in net sales and an approximate 500 basis point drop in adjusted operating margin compared to the previous year, not accounting for any significant impact from new tariff policies within the quarter.

Due to uncertainties regarding current tariff policies' potential effects and duration, the company is not providing full-year fiscal 2025 guidance.