Vince hits low end of Q2 sales expectations, announces results of Rights Offering
Vince reported on Thursday its second quarter results that met the low end of its sales expectations.
The contemporary fashion label said in August that it expected its second quarter sales to be in range of $60 million and $62 million, and the net sales came in at the low end of the expectations at $60.8 million, a 0.2% increase from the previous year.
Wholesale segment sales fell 0.9% to $39.3 million, due to a reduction in international sales, and comparable sales fell 0.8%, but both were offset by a 2.3% increase in direct-to-consumer sales.
Gross profit in the quarter was $25.6 million, or 42.0% of net sales, compared to $27.4 million, or 45.1% of net sales, in the prior year, and operating loss expanded to $8.9 million from a loss of $4.3 million in the previous year.
“We were pleased to see the stabilization in net sales during the second quarter, which showed significant sequential improvement versus our first quarter results,” said CEO Brendan Hoffman.
“As we look ahead, we have taken steps to rationalize our department store distribution and made the strategic decision to enter into limited distribution arrangements for non-licensed products with two department store partners, Nordstrom and Neiman Marcus, beginning in fiscal 2018."
Hoffman said that he expects the partnerships to improve profitability over the long-term, which should sound like good news for shareholders that may have felt nervous about the company’s future this year. Earlier this year, Vince was sent a notice from the NYSE to bring its share price and consecutive 30 trading-day average share price to above $1.00 by November 17, 2017.
Vince has been focused on improving business and paying down its debt. In May, Vince received a Rights Offering Commitment Letter from Sun Capital Partners for $30 million in cash, and in July, the company obtained amended agreements with its lenders to pay down loans.
In addition to releasing its second quarter results, Vince announced that it received subscriptions and oversubscriptions from its existing stockholders for a total of approximately 48.8 million shares of its common stock, raising gross proceeds of approximately $22.0 million. Vince also announced that it expects to close the Rights Offering on or about September 8, 2017 and plans to receive $8.0 million in gross proceeds from Sun Cardinal, LLC.
Following the completion of the Rights Offering, Vince expects to have a total of 116.1 million shares of its common stock outstanding.
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