Vince, the laid back, California-inspired contemporary brand, saw a significant boost in sales in the third quarter and continues to see selling momentum in the fourth quarter so far.
Net sales for the quarter ended Nov. 1 increased 6.2 percent to $85.1 million, from $80.2 million in the year-ago quarter. That easily beat expectations of flat to up 3 percent.
Wholesaling increased 6.7 percent and direct-to-consumer sales gained 5.5 percent. Vince operates 46 stores and 14 outlets.
The business was lifted by store renovations, website improvements, and solid product acceptance despite price increases due to new tariffs.
Profit expectations were also exceeded.
Gross profit was $41.9 million, or 49.2 percent of net sales, compared to $40.1 million, or 50 percent of net sales in the year-ago period. The decrease in the gross margin rate was primarily due to higher tariffs and freight costs, which were partially offset by some lower product costs, higher pricing and lower discounting.
Operating income reached $5.4 million, compared to income from operations of $5.8 million in the same period last year. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $6.5 million compared to $7.4 million in the same period last year.
Net income was $2.7 million, or $0.21 per diluted share, versus net income of $4.3 million, or $0.34 per diluted share, in the same period last year. Last quarter’s net was brought down by tariffs, greater income tax, and severances.
“We had a terrific quarter. All channels did really well,” Brendan Hoffman, chief executive officer, told WWD.
The third quarter, Hoffman said, “was really our first time seeing how price changes were going to be received by the customer.” He said Vince prices, at retail, were up about six or seven percent overall. The price increases, he said, were done “very strategically, with a little bit more in women’s based on where the product is sourced from. We saw very little, if any, unit decline. So that really drove business, and that’s continued into the holiday. In talking to our wholesale customers, they still feel really good about the value Vince represents.”
Hoffman said Vince generated a record amount of sales over Black Friday and Cyber Monday. “We’re really enthusiastic about the way the consumer is interacting with our product right now. We had good momentum coming into November, and that has continued.”
Asked what were the best sellers, Hoffman replied, “Sweaters are always terrific for us. Our funnel neck cashmere we’ve always been known for.” He also cited strength in outerwear, leather and men’s. “We’re really seeing it across the board.”
From the Vince holiday 2025 campaign.
The impact of tariffs in the current fourth quarter will be “similar to what we saw in Q3,” Hoffman said. “To the extent we know where the tariffs have landed, we feel like we’ve moved around sourcing in an efficient way. We’ve taken into account the tariff changes and priced accordingly. What we saw in Q3 is a good reflection of what we’ll see going forward.”
Hoffman said stores in Greenwich and Stamford, Conn.; Palo Alto, Calif., and a few others recently renovated are “seeing nice lifts.”
He also cited the website was “refreshed. It’s just more elevated from how it looked in the past, and I think more reflective of the product.”
Vince also added drop ship technology. “It’s a big thing. Where we license out categories, and in this case, specifically shoes, we can now take advantage of the inventory that our partner holds. And so we were able to add on the entire Vince shoe assortment where Caleres is our licensee which not only gave the customer a lot broader selection than they previously had at Vince, but also allowed us to be better stocked on sizes and colors. The drop ship technology gives the consumer a much wider range of choices.”
For the first half of 2026, other licensed categories are being fast tracked into drop shipping. That would be tailored clothing with Peerless, and handbags and accessories with Centric. “It really is quite exciting for what it could mean to give a lift to our direct-to-consumer business by taking advantage of these other categories.”
“We are extremely proud of our third quarter performance delivering healthy sales growth across all channels while exceeding expectations for both top and bottom line results,” Hoffman said in his prepared statement Tuesday. “Our direct-to-consumer segment is showing broad-based strength benefitting from enhancements we have made to the customer experience. This includes store renovations earlier this year as well as an e-commerce site refresh, increased marketing support, and the launch of drop-ship capabilities expanding the breadth and depth of our online assortment in the third quarter. This momentum has continued into the fourth quarter with a record holiday sales weekend in direct-to-consumer. As we look ahead, I’m more confident than ever in our trajectory as we successfully balance disciplined execution with strategic reinvestment to position the Vince Holding platform for long-term profitable growth.”
For the fourth quarter, Vince expects net sales to increase approximately 3 percent to 7 percent compared to the prior year period. Adjusted operating income as a percentage of net sales will be flat to 2 percent, and adjusted EBITDA as a percentage of net sales is seen ranging from 2 percent to 4 percent. The guidance for the fourth quarter assumes $4 million to $5 million in incremental tariff costs, which the company expects to continue to partially offset through mitigation strategies.
For fiscal 2025, the company expects net sales to increase approximately 2 percent to 3 percent; adjusted operating income as a percentage of net sales to be approximately 2 percent to 3 percent, and adjusted EBITDA as a percentage of net sales to be approximately 4 percent to 5 percent.
