Vince Holding (VNCE) 10 Sep 212021 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to the Vince Q2 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Ms. of President Vice Levy, Investor Relations. Amy ahead. go Please

Officer to Thank second Corp's the today Chief Welcome Officer. Chief conference you good afternoon, call Executive Schwefel, Jack and Vince is David quarter Hosting Stefko, Financial Holding call. everyone. and fiscal results XXXX

Before risks undertakes available on you certain any information Those and obligation on statements remain to could questions actual on me uncertainties statements that call available SEC to statements, which differ the remind constitute are are assume described release discussed uncertainties filings will press long prepared the your results the take that and call. be company's expect. for company call the that time risks may operative forward-looking let will at the should as from time are remarks, we as made no not begin, today's during to that later which management the Investors this update made a After subject company in website. those to the cause in and permits. and company's

Now, to the call turn Jack. I'll over

afternoon you you for Thank and from COVID continued the Amy business afternoon we joining joining our our as thank quarter discussion a pandemic. Great. emerge us the our you, us this for everyone results reflect of thank and this second for Overall, everyone performance. recovery of

and Vince on levels. we men's early brand strategies. We our focused and are performance in pre-pandemic Rebecca momentum assortment our high the see brand of At our Taylor, approach a key continued in to business. sophisticated strength women's turnaround stages the quality remain pleased momentum the driving reflects This are of in

sales revenue of our we Turning in offset our growth wholesale lower by Vince direct-to-consumer brand, to to channel. fiscal the XXXX compared strong delivered performance

category beautifully share growing for for of within the brand that deliver designed market luxury fueled We contemporary as gains four years. we to are seeing have the collections the fabrications last continue demand high-quality

Our and themes home away have esthetic. and on emphasis vacations casual latest a to shifted work lounge collections from wear with current

We dresses or stylish paired printed silk have office. can up seen a strong response blazer be to for for dressed versatile the events with that

knit seek bottoms away We have in from majority versatile home seen more pickup as our direct-to-consumer the customers a styling. in the pre-pandemic of reached stores retail dresses levels. productivity In also business, have our

stores as our view to strategy and important awareness continue of brand We to part an drive customer build engagement.

been New sophisticated has New performance highly our which East perfect store, is casual store aesthetic. our York a showcase particularly Hampton location to encouraging,

we Carolina Creek, open in one results. expectations. out price full Park, Since all have Denver Field, we During early quarter, York Roosevelt end and opened with in Cherry South quarter, strong the New the North with locations store of second operating the second and lines three

all focus openings and channel to our continue this enables term longer We locations, strategy. reach favorable in our remain wholesale consumer the new highly challenged, remains short-term In distribution of us renewable leases. store broaden our of while to part will distribution wholesale,

Nordstrom Annual performance extremely women's and with in are the at Sale. Anniversary We both the pleased men's

a theme We Vince will holidays. Cashmere Nordstrom for a for be launching and collection crafted the Family

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now part to our focus make terms. closely and evaluating work in business of how on revenue mobile we this As analytics, are it harder

is concepts an new two overarching outside holiday test trajectory The from for brand brand Our gifting, current XX% previous talk of Vince increase mobile email this plus are At have and we in destination our nearer program The of thoughtful where on major working the seen we team where a will is cashmere August level, are starting the to notably themes, in already campaign the showing in more months, improved about strategies. brand also on July already particularly the is which we XXXX. logical conversion. ranges. planning a to teams for

As and emphasizing our directly on traffic growth e-commerce plan quality for we we ramp the those to can our strategies areas resume Vince, efforts. the of throughout we year, investments where our return drive marketing into business measure to the continue remainder those

our capabilities. on implement We and also personalization point-of-sale targeted remain marketing systems, will track enable to better which

shift up in store, expansion businesses, omni-channel online the we buy effects pick the from complete spoke we addition, limit our In continue fiscal of international progress. the to and continue and pandemic about our In the year store our the expect which -- end. of to to such to capabilities as prior

London Our U.K. welcoming the store consumers. has by and encouraged stores' we are reopened

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wonderful, ability continues expand in to strategy our presence I our to remain globally. While highly our confident international

and campaign more lifestyle on expanding influencer excellent of Cateron. targets see with our To with the XX We Taylor, This which clients. attractive in skewed social to website. director We XXXX brand digital, her and for brand Steven opportunity have will towards providing underpin item Turning we XXnd which wider Instagram, on already categories across an with which will niche the support needs. as execute marketing an Redefined, believe messaging to focused an at strategy, collection, Rebecca a opening themed success from seasons expanded the introduce a will We to new themes, Rebecca social collection unique colorful driving price be own a what media, fall brand Stephen with events such works assortment collection, reflect fall with center I our relaunch Spring strategic will the we of styles, market initiative, go funnel creative focused in Extending relaunch a the and tees an similar the hosting of around small be potential on the blouses price which and the distinct continue drove we pleased brand of Romanticism employing Vince. which important points of Spring top to as to to build collection feminine an on no this leader share. full brand achieved were and paid the content address with the clear our out plan generation selling. will combined emphasis to assortment Facebook, represented friends we as us XXXX, with

During we Field, opened Roosevelt and the of location New with initial encouraging price the second quarter, stores one we outlet opened three the since second results end and quarter, full York.

enhancing in still are our early assortment, in are our of the brand and we the channel distribution. we early merchandise with messaging, our While redefining optimizing optimistic progress stages turnaround, this

issues would the call I turning experiencing. chain are the address Before over we to supply Dave, to like

port see certain shut challenges down to brought While with shipments COVID, continue we freight ongoing temporarily due we and congestion higher have to the pressures. in cost early, in factories production

are I conclusion, in operate of continue brands diversifying stop will measures to In some we distinct will channel offset that, while maintaining we business will impact the With at these to shortly. for the our in of growth. the advancing long-term. the the Dave. take turn profitable discipline pressure fashion our speak We to we it to while long-term short-term on sourcing looking remain steps focused help to how Dave the over taking currently mitigate strategies

Thanks Jack.

strategies. the of a to quarter. quarter in we the business is to We progress to Total during the $XX the of increase second our million are notable increased compared XXXX. to This the see pleased for XX.X% in as improvement our recovery first the net to $XX.X second accelerated fiscal quarter million continue on sales in quarter XXX.X% company second pace

brand, increased prior year million the period. $XX.X same compared $XX.X in quarter second sales Vince For the consolidated to XXX.X% million net to

urban non-urban reflecting including quarters. Our markets, our events $XX direct-to-consumer million traffic in trends improved which quarter, been increased trends, in prior had market in sales the lagging segment to second XXX.X%

position of in also e-commerce Parker business as segment greater million wholesale rate segment, $XX.X combined to the our XXX%. double-digits compared to remain outperform contemporary luxury year. market segment this period Taylor the share Rebecca the XXX.X% net to within category. Vince last to within increased peers our this as stores. and continues We our sales In increased our with same confident a than increased at compared second as Importantly, quarter sales growing XXXX, net

we're million $XX.X have $XX.X XX% shared operations quarter Vince we last At was assortment the XX% gross of to margin in expenses of profit This and past, As Gross with increase brands. on million Rebecca Taylor adjustments or was we the intangible and our as payroll dollars promotions $XX.X expense, Income administrative the have lower of year. second our SG&A of in early in in product tax, reserves, in million quarter a for quarter and net redefine XX.X% increase net channel. sales same direct-to-consumer million to million Taylor, marketing of investments, depth of deferred $X.X we was the expense of compared Operating and in and crisis, the distribution, year. for compares year-over-year paused million last as consulting second last the quarter to will was costs. our compared not rate benefit stages our million of XX.X% quarter million business to the brand. we higher of to Rebecca tax $XX the and other our of sales channel non-cash. inventory mix, of reduce development loss and second the each year focus general, of result This $X.X Parker our the and created XXXX refining expense in for and compensation the of Selling, net a the the Note sales. frequency the income quarter current benefit non-cash due new reduced and fiscal COVID the quarter This compared for for turnaround book to primarily in of period the recognizing or increased year. the to as period have goodwill for expense the resources second tax of result primarily of was by amortization tax second second see third-party higher was $XX.X tax indefinite for purposes. or or the but and first $X.X sales, half assets of net that be tax to in a quarter strategy the expect live

year, For $XX.X $X.X continue share non-cash million the of million per quarter a $X.XX million. we share liability loss this the tax net loss for to second to Net per $X.X quarter a deferred year. compared loss last full was in to or or expect loss $X.XX the approximate second

our a now position Moving sheet. the X, end Subsequent approximately prior revolving quarter, our This term million reducing a under balance credit under $XX.X covenants. senior of to associated quarter restated debt into increasing on million. loan $XX facility the credit We of our by $XX.X step ended facility, concurrently $XX as new enhances credit totaled entered liquidity and loan with revolving Borrowings the availability well reflects to of agreements as million secured facility. further our which the replacing We entered the terms we credit facility. facility, the amended term into new million. availability our of September

of credit and reflects now the result now to of credit levels, the of matures the a rate XX-Q, loan provided other third margin Furthermore, facility, an which we've reduced also amendment the in loan the and our credit and XXXX. The facility loan entered new our applicable amended credit credit revolving we revolving facility, new third XXXX with term lien term is cost our credit has More into facility terms pre-pandemic in also current As which detail capital. amendment term facility to facility lien facility. our reducing credit filed been in new mature SEC. to

quarter to end Moving the at compared the $XX.X of year. to million as at was second second of the inventory, net last end quarter, million inventory $XX.X the

order an As wholesale store of fiscal reminder, XXXX a channel the experienced to we second seasonal quarter temporary inventory levels and due in increase in the in cancellations closures.

seasonal the As with taken addition challenges congestion prior a to actions many industry, inventory costs. shutdowns, inventory of the compensation. delayed we product, have newness result better feel shipments, and we freight other our through and a including experiencing our we comfortable in reflect healthier higher factory in the in Like of work current balance supply chain, to levels port are

moving with and to on periods actions splitting these working Despite as quarter not also partners we shipments as daily delays product as air to Though monitoring product as We're impact from should a a our potential for in basis are We arriving see price delays an season. necessary. shipments the well in style-by-style recent and continue as manner our get react mitigate situation customers timely the continue to to we'll and face to spread our monitor a in products, higher short-term. of and expect formal not quarters, certain time. to product we visibility pressure continued early due the variant, related to to guidance decision airfreight Delta Nevertheless, in the this to to the cost to COVID-XX, impact costs. delays, allow reacting including believe appropriate help product to risk. mitigate markdown product accordingly, especially select we to be will result full our necessary of at the result extended will low which of did second the of we selling, during the recent uncertainty providing given Similar

we allowances XXXX, continue to of net capital be plan tenant to expenditures fiscal that For below XXXX. of

well expenditure omni-channel. become IT investments openings, fully Our new our specifically store capital to efforts related include plans as as, to

registration registration finally, prospectus effective other be for will corporate statement opportunistically. leases the things, ATM declared X including stock, in a statement short-term to be SEC. for by program. an over the pursue have common We not The we two general that And we to to practice shelf a we that last for, filed among shelf corporate shares future has please yet note As attractive with used registration shelf today a it purposes. been could of the supplement million continue preliminary have good believe done terms years, new

about of Looking the fiscal we balance environment, continued year. and this optimistic considering remain the COVID ahead

While there these our including chain are steps selling are continued in proactively we to taking challenges, being flexible pressures, supply manage strategies.

to concludes challenges the So, our remains pressure the liquidity business. enhance This with while This, these of may strength in cost by have our in business intact. to execute debt, chain the invest result comments actions these supply respond taken restructuring our underlying second to along near-term, us my we continuing challenges our strategies regarding and in position quarter. macro to

take We Operator? will now questions. your

from line Instructions] [Operator the Group. question from you. Advisory Thank Dana Telsey of Telsey comes First

open. is line Your

the the levels the business way you can see Any brand, just side, on each about Good profile this margin seeing particularly exceeding afternoon the the stores? how operating at XQ impressive. is? How and follow-ups. and do? of in basically nice income million, to very the $X.X couple Vince When think break frankly, a Thank and are the quarter, progress. And everyone DTC you e-commerce topline then DTC you the-commerce apart did there? you. the What And XXXX

Nice business stores our is From have hi. a stores what's XXXX encouraging XXXX as business, returned while many the hear results, said that the is from still business returned our Dana outperforming comps. comping driver -- we been levels. of the perspective, last his remarks you. the e-comm e-comm business e-comm store obviously. to on to The year's is e-comm main significant Yes. in was And

the we're promotional we all gone we margin quarter. first last that through perspective, had you and from as like the that perspective. in away level encouraged year recall, still carry a many of from then selling we've So, And promotionality some from

promotional So, in also. be we less were QX able to

there's that's The sounds grow progressing there? you like do how both are you it then see on with levels, opportunity seeing -- the it. well. sales in margins Thank in the and Nordstrom Bloomingdale's sounds does you. you're what it in seeing going like to there? get to What wholesale back side, pre-pandemic of that Got And And relationship. terms

is Hi Dana, this Jack.

Hi.

both the the we're there with than side good very stores. the our management, side on wholesale particularly very room wholesale. DTC XXXX. forward. wholesale think the from to because We as about we think doors by very, continue in of We're to now see partners on significant on a it's and significantly We business see there's couple had a of wholesale Remember to encouraged men's go the per that control and We're numbers, smaller the potential of room less are and upside, lots been still inventory the volume excited they well. that there's that and in just business especially in a in that, place grow think XXXX

on And in UNFOLD, -- Rented, July, then progressing? that's how summer, middle of your think you the I there, and seeing you're in it. what launch and think the Borrow, services I or any extended update Borrow, rental Got

think I And and what results historic wanted with see were we that meant. really Well, the we're that men's to sure. good jump not enough in

I I that Rent in perform to small the small The the this about time, but do. same Borrow such future. yet, honestly, are brand so never the will It's really at women will in way want of think, we new talk if results we'll period point. men see a and is pieces

to And think coming the -- point you airfreight? your there How in airfreight, it? margins the and any basis at hit to We're from do from the of production airfreight. comes much Vietnam? chain, Got XX then how hearing from type when from everyone look about you XX investment what it. of And supply hit on is

twofold. it's Well,

one the of supply I'll reassuring terms back in the off, how the in were I where our that take chain air on year. able of appropriate entered to called than securing most. of than First be is to it I early the far And earlier that's going really we half are think steps -- business to as issues me guys say the out things of quickly

out it’s come insignificant react jump of love question. and that’s a So. your of than I able were Less so, did. I'll quickly deliveries Dave from fact Its call let our the second the Vietnam, as minor our we that in that as we on problem. -- a half X% total. to of

Yes.

historically pressure, depending cost say On the the on XX% from the -- our aired fair we in Dana, to I a of range already season. have majority XX% product a would

us. So, air was a natural for

It the you expect that half but would to shutdowns. airing port are we factory costs the is of talked year, of that material incurred, impact. we about of Now, potential in the the in the kind a year, to first something respond we for into congestions second more wasn't there on the half range incremental the in

inventory Got inventory year, of it. And do for Dave? the out the of balance playing how quarter, $XX.X see dollars you this million for the

-- their of they're for stores we we It's probably all much the mean because how more have part know. -- are obviously, little -- it's buys, so of been I timing. bought it tighter, it's managing, department you a as sautés

If you replenishing, moving focused they're more the necessarily they they're sell-through, have in have through on good what store. not

were reaction some year We last to worked accomplish it out hoped we There inventory able than is to offered reaction it year we that. COVID, as year there's to the in better feel would had way held it at the hoping year. we that. channel through last to on as margins from this we move last to it grows, off-price So, were

wholesalers see just buying to what are but the so And much so to chain based how affected is we supply product, timing, but reporting in willing by on with our feel all when going quarterly pressures. receive appropriately, the we're the not we're be you also and dealing

be looking is marketing the holiday And in you what to increasing, should head as marketing that it. Got for we dollars season? are half half shifting back the to the the or front we from investment

push don't on is return we it on moment-to-moment and mean, to what it a along. do obviously, coming the did With it think test and in the spend do see you all levers where the to you be starting turn I see on then return of can that off things up world we're Adrian's basis in, way, look some or back if you can -- we is the where and I and that really the disciplined amplification is we ad thought you we way Yes, investment that a going the today, there. on those coming at of and very that

that So, also expect do but real-time. incrementally -- we that sales significant We and we would, higher there's in above to spend we're doing where to as think that we well. spend upside thought with

on it. loss of that Got then million you've you what Rebecca the that time, $X.XX there Taylor, what loss were the And in is seeing had drivers best lowest and -- the some quite are brand? in

it's a collection towards where happen where Look with next the to really we're with to and with half the into and sober really in this brand. huge second expanded go go and fact early drive want after digital and to harder start to been. ever that see them drive them starting And encouraged being year. opportunity go from velocities more were the really We're the that a even to brand we we'll to way customers doesn't that fall recreating this that to was we -- unit before in findings. We're than ever this excited have look to to more overnight the we really,

Thank you.

this at conference back showing Jack to turn Jack? I'm no time. for the like now to would question you. any closing I further Thank remarks. And

all today. great you call time the and you, operator. look thank our for early to your Thank afternoon. time for December release and -- earnings do we We next have next you a our Thank all

conference. you. Thank all presenters. you, Thank joining. Thank and gentlemen, this you concludes for Ladies today's

You can all disconnect.