Vince shares soared more than 100 percent Thursday after the contemporary brand reported second-quarter results that beat expectations.
Vince is known for its California-inspired laid-back contemporary styling, but there was certainly nothing laid-back about Wall Street’s reaction to the report, as investors propelled the stock up more than 100 percent to $3.57 by midday Thursday.
The brand indicated that it benefited from greater full-price selling, less discounting and healthy levels of product acceptance by consumers during the quarter ended Aug. 2.
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Vince’s net income rose to $12.1 million, or 93 cents per diluted share, and compared with net income of $600,000, or 5 cents, a year earlier.
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Adjusted earnings before income, taxes, depreciation and amortization totaled $6.7 million compared to $2.7 million in the same period last year.
Net sales decreased 1.3 percent to $73.2 million with a 5.1 percent decline in the wholesale segment partially offset by a 5.5 percent increase in direct-to-consumer segment. The decline in wholesaling was primarily due to the shift in timing of fall shipments as a result of uncertainties revolving around tariffs.
“We are very proud of our second-quarter performance, which reflects disciplined execution and strong customer reception to our product offerings especially as we elongated our full-price selling season,” said Brendan Hoffman, chief executive officer, in a statement.
Hoffman said Vince is beginning to reinvest in the business and pursue growth opportunities.
Eric Beder, founder and CEO of Small Cap Consumer Research, wrote in a research note: “We are reiterating our Buy rating and raising our projections for Vince Holding after the company reported solid [second-quarter] results, with slight top-line and material bottom-line upside, as the company’s product offerings were very strong and drove increases in full-price selling, despite disruptions from tariffs that led to delayed shipments.
“Further, initial third-quarter guidance reflected strong demand for the company’s new fall lines and the potential to offset a material portion of the higher tariff impact with a more balanced supply chain and selected price increases,” Beder added. “We believe Vince remains a key fashion winner with the product and customer base to drive higher pricing, continued new store growth and to capture a wider piece of the overall wholesale channel market. As such, we remain upbeat on the potential for further upside as the tariff shocks abates, and we reiterate our Buy rating and $4 price target for Vince.”
For the third quarter, Vince expects net sales to be flat to up 3 percent compared to the prior-year period.