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VH

VINCE HOLDING CORP. (VNCE)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 FY2024 net sales were $75.3M, down 17.5% year over year, while gross margin improved to 45.4% (+580 bps YoY); operating loss narrowed to $1.7M and EPS was $(0.37) .
  • Management delivered on profitability objectives via lower promotions, off-price pullback, and disciplined inventory, despite ABG royalty headwinds of ~430 bps; operating margin improved vs prior year .
  • FY2024 outlook (as of Q4 call): net sales up low-single digits and operating margin flat to up 25 bps vs FY2023 adjusted; subsequent updates in Q2/Q3 revised sales to low-single-digit decline but still raised adjusted margin expectations (+25–50 bps) .
  • Strategic drivers: transformation plan targeting $10M annual savings; Nordstrom expansion to dual-gender in all doors; focus on healthier full-price DTC and men’s bottoms program .

What Went Well and What Went Wrong

What Went Well

  • Strong margin execution: Q4 gross margin 45.4% vs 39.6% YoY (+580 bps) on lower promotions and Rebecca Taylor wind-down; operating loss improved to $1.7M vs $5.5M YoY .
  • Inventory discipline and full-price mix: management emphasized tight buys, healthier full-price DTC, and off-price pullback supporting margin expansion and profitability objectives .
  • Wholesale and men’s momentum: Nordstrom to carry Vince as dual-gender in all doors; elongated men’s sweater season and bottoms opportunity cited for growth .

What Went Wrong

  • Top-line pressure: Q4 Vince brand net sales fell 6.3%; total company down 17.5% driven by wind-down of Rebecca Taylor and wholesale/DTC declines, despite margin improvements .
  • Royalty expense headwinds: ABG licensing royalties reduced Q4 gross margin by ~430 bps; Q1 FY2024 outlook also flagged ~400 bps royalty impact versus prior-year comparables .
  • SG&A deleverage areas: rent/occupancy and transformation-related consulting partially offset cost savings; SG&A was 47.6% of sales in Q4 .

Financial Results

Quarterly performance (oldest → newest)

MetricQ2 FY2024Q3 FY2024Q4 FY2024
Revenue ($USD Millions)$74.2 $80.2 $75.3
Gross Margin %47.4% 50.0% 45.4%
Operating Income (Loss) ($M)$1.1 $5.8 $(1.7)
Operating Margin %1.5% 7.2% (2.2)%
Net Income ($M)$0.6 $4.3 $(4.7)
Diluted EPS ($)$0.05 $0.34 $(0.37)

Year-over-year for Q4

MetricQ4 FY2023Q4 FY2024
Revenue ($USD Millions)$91.3 $75.3
Gross Margin %39.6% 45.4%
Operating Income (Loss) ($M)$(5.5) $(1.7)
Diluted EPS ($)$(0.89) $(0.37)

Segment breakdown – Q4 FY2024

SegmentNet Sales ($USD Millions)Income from Operations ($USD Millions)
Vince Wholesale$30.9 $8.3
Vince Direct-to-Consumer$44.4 $3.6
Rebecca Taylor & Parker$0.0 $0.0
Total$75.3 $11.9 (excl. unallocated corporate)

KPIs

KPIQ4 FY2023Q4 FY2024
Company-operated Vince stores (count)63 63
Net Inventory ($USD Millions)$58.8 $58.8
Total Borrowings ($USD Millions)$44.2 — (not disclosed in Q4 release)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net SalesQ1 FY2024Decline high-single digits vs prior year —Initial view (context for H1 headwinds)
Operating MarginQ1 FY2024Down 400–375 bps vs prior-year adjusted OM, incl. ~400 bps royalty headwind —Initial view
Net SalesFY2024Increase low-single digits vs FY2023 Decrease low-single digits vs FY2023 (updated in Q2; reiterated Q3) Lowered
Operating MarginFY2024Flat to up 25 bps vs FY2023 adjusted Up 25–50 bps vs FY2023 adjusted (updated in Q2; reiterated Q3) Raised
Net SalesQ3 FY2024—Flat to down low-single digits vs prior year New detail
Operating MarginQ3 FY2024—+350 to +450 bps vs prior-year adjusted OM New detail
Net SalesQ4 FY2024—Down mid-single digits to up low-single digits vs prior year New detail
Operating MarginQ4 FY2024—+200 to +300 bps vs prior-year OM of (2.2)% New detail

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 FY2024)Trend
Customer data/technologyUsing customer data platform; top-of-funnel marketing and targeted acquisition plans; strengthening VIC cohort Store associates given more consistent info; focus on CLV, loyalty and acquisition Building capability; execution ongoing
Supply chain/inventoryEarlier-than-expected wholesale shipments boosted Q2; normalized off-price; disciplined inventory Tight inventory buys; disciplined approach; wholesale/DTC inventories managed for profitability Continued discipline
Tariffs/macroCautious outlook due to uncertain consumer; international wholesale reorders impacted by strong USD; China operations paused No explicit tariff discussion in Q4 call; caution into Q1 on promotions and off-price Macro caution persists
Product performanceMen’s linen/knits, women’s sweaters; expansion of men’s bottoms; strong Nordstrom results Men’s assortment strength (elongated sweater season); opportunities in bottoms; Nordstrom dual-gender all doors Men’s growth expanding
Licensing/royaltiesABG royalties a margin headwind (Q2: ~180 bps); transformation savings ahead of plan Royalty headwind ~430 bps in Q4; transformation plan underpinning margin expansion Offsetting via transformation

Management Commentary

  • “We are pleased to have delivered on our profitability objectives… evidenced by the strong operating margin expansion… despite incurring royalty fees that we did not incur in the prior year period.”
  • “Nordstrom is planning to expand our men's presence and Vince will be a dual-gender brand in all Nordstrom doors for the coming fall season.”
  • “Gross profit in the fourth quarter was $34.2 million or 45.4% of net sales… approximately 790 bps related to lower promotional activity… partially offset by ~430 bps of royalty expenses.”
  • “Given… royalty fees now incurred… for Q1 fiscal 2024, we expect total net sales to decline in the high single-digit range… operating margin to decline 400 to 375 bps versus the prior year adjusted operating margin.”
  • “We expect total net sales to grow in the low single digits… operating margin to be flat to up 25 bps vs fiscal 2023 adjusted operating margin.”

Q&A Highlights

  • The Q4 FY2024 transcript published primarily prepared remarks; management addressed Q1 and FY2024 outlook, margin drivers, inventory discipline, promotional stance, and men’s expansion within prepared commentary .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 FY2024 EPS and revenue was unavailable due to system limits, so a beat/miss assessment vs Street cannot be provided at this time (S&P Global data unavailable).

Key Takeaways for Investors

  • Margin execution is the core narrative: significant gross margin expansion driven by lower promotions and cost efficiencies, partially offset by licensing royalty headwinds; operating loss narrowed materially vs prior year .
  • Top-line trajectory remains mixed: Q4 revenue declined YoY due to brand/business wind-down and disciplined promotions, but wholesale momentum and men’s growth provide offsets .
  • Transformation plan is delivering and remains central to 2024 profitability (+$10M savings targeted); supports margin resilience against royalties .
  • Channel mix evolving: healthier full-price DTC focus and normalized off-price should sustain margin quality; wholesale partnerships (Nordstrom) are expanding space and men’s presence .
  • Guidance path moved from low-single-digit growth to low-single-digit decline in FY2024 sales but raised adjusted operating margin expectations (+25–50 bps), signaling prioritization of quality over volume .
  • Near-term watch items: promotional cadence, off-price pullback, and inventory buys into key fall/winter season; early shipments can swing quarter-to-quarter comparisons .
  • Actionable: focus on catalysts like sustained margin expansion and men’s/DTC initiatives; monitor royalty impact across comps, and wholesale reorder cadence into Q1/Q2 given macro caution .