Vince Holding Corp. reported a first quarter net sales decrease of 7.6 percent to 59.2 million dollars driven by a 7.5 percent decrease in Vince brand sales and the pullback in the off-price business within the wholesale channel.

The company said in a release that gross margin improved 440 basis points, gross profit rose to 29.9 million dollars or 50.6 percent of net sales, net income was 4.4 million dollars or 35 cents per diluted share, while adjusted net loss was 3.3 million dollars or 26 cents per share.

Commenting on the trading update, David Stefko, the company’s interim CEO said: "Our first quarter results reflect the strategic actions focused on driving improved full-price performance as we continued to reduce the promotional activity in our direct-to-consumer channel and pullback in our off-price business within our wholesale channel.”

“As expected, these actions had a negative impact on our topline performance but helped to drive strong gross margin expansion despite incurring royalty expenses that we did not have in the prior year period," added Stefko.

Vince brand Q1 revenues decline by 7.5 percent

The company added that the Vince brand net sales decreased 7.5 percent to 59.2 million dollars with wholesale segment sales down 6.8 percent to 30.3 million dollars and direct-to-consumer segment sales decreasing 8.2 percent to 28.9 million dollars.

The company ended the quarter with 62 company-operated Vince stores, a decrease of five stores since the first quarter of FY23.

On September 12, 2022, the company announced the decision to wind down its Rebecca Taylor business to focus its resources on the Vince brand. The wind down of the Rebecca Taylor business was completed in the second quarter of fiscal 2023.

On October 31, 2023, the company announced its transformation program focused on driving enhanced profitability through an improved gross margin profile and an optimised expense structure. The transformation program is expected to result in over 30 million dollars in savings over the next three years, including approximately 10 million dollars of savings in fiscal 2024.

Vince forecasts low-single-digit rise in FY24 net sales

For the second quarter, the company expects net sales to be relatively flat to down low single digits, and operating margin to decline approximately 500 to 750 basis points.

For full year fiscal 2024, the company continues to expect total net sales to increase in the low-single-digit range compared to 292.9 million dollars in fiscal 2023.

Vince Holding continues to expect full year operating margin to be flat to up 25 basis points compared to total company adjusted operating margin of 1.4 percent in the previous year.