Vince Holding (VNCE) 9 Jun 222022 Q1 Earnings call transcript

Good morning and good afternoon, everyone and welcome to the Vince Q1 2022 Earnings Conference Call. My name is Emily and I will be coordinating the call today. [Operator Instructions] I will now turn the call over to our host, Amy Levy. Please go ahead.

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

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

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

Thank joining a going the a impacting us year-end spoken along ago I'm you, our you quarter you first provide remainder a the this everyone, on the Having with performance. on for you, on our of for few discussion performance, morning brief weeks trends thank update to with Amy and quarter just with year.

line We first results expectations. our with in are our were with pleased which quarter

significant by in-person We with in see shopping. aided this a traffic increase to as continue momentum Vince return in store quarter customers to growth

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distinguishable well channel to by resonate the of we the luxury remains resistance enabling our surpassed with XXXX inflationary is and category, wholesale of with meaningfully was positioned within the of pressures. strongly level. that Vince items challenged, assortment strong exemplified at needs the The us Overall, retail of and everyday initial price sell-through we the wants that superb increases, to brand offset lack customers. partially continue we sophisticated see casual remain to While our strength levels confident a the

quarter, line and the and that for work social response a Nu successful swimwear season. spring/summer we last vince.com. with year, continued This in strong stores saw mid-May, pants with occasion-based Swim is available During and now the collection trends, as we Based and strong on which such aligned items. to collaboration on for with the to versatile with launched blouses select activities, them demand the launched return another styles in

that her we believe increase very wovens categories, continuing growth bottoms, saw which across about contemporary and terrific year. with exceptional double-digit swim was this this of a we excited is share closet to on continue and particularly can category double-digit growth all We of Performance top In of linen our last through partnership. styles. are we increase men's,

our very as is the opportunity. terms we in we men's and swim into expanded a to a Ever Similar we have from of on excited to of team continues Known men's [ph] and a growth the which offering women's, which demands sophistication on select side, customers. men's significant small assortment are the see during meet Our to elevate business by the with the quarter Overall, fabrications growing more available in vince.com. in stores our momentum

urban performance, well. locations at Looking performed extremely store

addition, higher-than-expected Vegas. In our vacation Las resort in Hawaii saw locations traffic we as and such

only is well store been first extended with traffic date. a and weeks reopened and the few Our to performing strong sizes Fifth Avenue store offers which that we ago has

new too stores supply opened further recent the while the we development. into desirable in delays, shopping still this and results, that this provide location ongoing success to and We are for ship chain strong lean about are in-person a excited long-term a despite we Overall, also Seaport optimistic initial Boston highly behavior. is our experiencing And are momentum with to to plan of return location. activities

While store key highly remains are productivity growth our encouraging, part a strategy. e-commerce levels of

to During that the full continue with online quarter. of XX% during versus emphasized accounted quarter, on Further, be online storytelling from for driving ship store more the which e-mails selling we focus promotion sales. price our than proved successful to

wholesale said quarter, half a we throughout the second remain with and of anticipate will the the chain front, year. On last we challenge delays consistent supply what disruptions

we continue of with teams challenges. work to navigate each Our as closely our these partners

demand across the men's conservatism growth lack strong macro of extremely That buys in business partners, Nordstrom pleased is our given are during said, the the in seeing we initial wholesale which with visibility are While has environment. extraordinary we shown at quarter.

From At Additionally, where first the since about XXXX, Bloomingdales, strategy looks last quarter remain our are perspective, a been brand have product as disciplined men's at we way regarding quarter continued elevate we've we particularly fabulous excited this we collection. to we throughout approach that to the Taylor. Rebecca continue the Vince have present a both of the Neiman and funnel and execute outlined partnership. showing of is Vince the confident brand at on the

this year's new social emphasizes last which launched a Following Spring colors. and media campaign we silhouettes called Awakening the spring success holiday campaigns, of

As of will the relevant campaigns while highlight we to showcasing assets, clear head also media brand. lifestyle that continue and brand we into quality the fall, social launch

Additionally, on conversion. drive Taylor Vince we focused and to order will social, remain our awareness increase to both Rebecca influencer advancing key strategy in which on be and a

generate influencers well as drive a approach with influencers revenue. those who strategy, balancing to this brand engagement We can to awareness have layered as implemented

driving encouraged very activities into are digital We these of see that to stores. our many are traffic already

future video of the right of quarter, were we is opportunity and started its channels. also marketing, relates learning as which we early given excited we includes to particularly Though stages are During This this focus authenticity. to now, social very on the it TikTok we about to ability there. first more assets, believe testing on showcase

price shown third-party Encouragingly, Turning both international. international wholesale websites. to sales, in full our business and in growth has

As responding newness and particular Madrid double quarter. assortment. our Australia We the sales, opened the customers spring shop-in-shop positively in during which the digits are retail strength during one both and Corte grew first in We color Korea in of saw to quarter. Inglés El of

in of and are an to extremely performance Overall, quarter Looking back ahead, demonstrate initial in of year. excited in open the brand of ahead third contemporary Vince luxury category. the about the the the continues launch to we we plan in Shanghai the and half the location to online the strength opportunities

Taylor. to Turning Rebecca

to find are spring grow our occasion-based and spring with brand is sweet dresses, This for are sleeve In continue seeing specific across market to the categories strengthening and as brand. to wholesale, plans summer gains. strides opportunities success months on consumer items drive our travel styles we the blouses, continue share we The cardigans spot with and to a We as increase. we relationships assortment particularly skirts. with resonating in all ruffle make but seek

the expand it positioning. around testing we brand we particularly sits consumers resonates works strongly what our brand and brands. with doesn't, when what As and The higher-end learning more with brand, are

subsets lean that others of certain and assortment demand. into better consumer the will We also are see performing than

and have stores. which full a we eight stores, are of reminder, XX currently Rebecca of Taylor As XX outlet priced which are

Far building show increased rate the to XX% marketing quarter. travel as of the to utilize upon investments cache brand engagement El concept to everyday Near during influencers approximately drive occasion results and we last continues are particularly around talk a the The introduced quarter. increased continue global our Rebecca's discussed and sequentially dressing. world, customer in season, micro Corte highlighting new performance we about Our product spring/summer of sales Through the [ph] We which series social Inglés, influencers, direction and the called influencers that global brand acquisition. the

similar a will as in ahead, enhanced continue drove merchandising our redefine to messaging. what success Looking we advance we and strategic plan to assortment our brand execute

very Dattilo over handing over best to years Dave, the Matt his work want CIO wish for him his hard on and Before of all five Vince the to as [ph] we retirement. it thank I

are business warehouse management with to e-commerce and will excited turn initiatives and execute data it who relationships our as be welcome CIO, X. us effective us will July over Heather very acumen Dave. vendor to new help We industries With I strategies. like experiences on strong our her will extensive We Wilberger, joining believe that,

Thanks, Jack.

foundation As fiscal increased XX.X% we $XX.X million control, the we we company macro to strong navigate continue built. remain have first focused headwind million first for of key to strategic our unprecedented compared our the XXXX. the in are to $XX.X Total through quarter sales capitalize quarter net challenges the on beyond driving initiatives to on that

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

e-commerce payroll increase to offset net year, was compared for retail partially fiscal other first period as was sales. the or a was gross margin the year. insurance rate first first or Our $X.X quarter of Taylor million in primarily of last $XX.X consulting expense product compared point million sales last costs. is administrative of retail million and XX.X% general as last double-digit in in and quarter the as levels, sales and net quarter for quarter by by as sales to million to same of not increased year. the the in SG&A $X.X The tax million net due overhead to growth million channel in product to levels. loss benefit XX.X% favorable $X sales the and Wholesale $XX.X year. first the compares and million nonrecurring net or XXXX primarily XX.X% in was In sales last last $XX.X Gross exceeded year. and million of a to was we of quarter the result Vince our expenses income well our $XX.X compared first XXXX. the quarter for anticipate loss recovery the Income to quarter increased higher $XX.X XX.X% the for XXXX same of and dollars in same first realized and expense, as and net growth leveraging basis Selling, first as The locations. XX.X% well Operating marketing compared business sales $X.X led combined XXXX distribution quarter $XX.X in in This tax compared a as higher XX.X% of as period costs, stores. segment direct-to-consumer current investments in in in and quarter higher loss The XXX growth costs. of segment, quarter profit pretax net Parker Rebecca Rebecca driven third-party ordinary will period million increased Taylor increased in exceeded first fiscal sales other sales mix, be compensation first This the or increase was to from by the of to year. freight XX.X%

realize addition, indefinite $X.X tax the for Net In by period per per deferred tax book share result $X.XX expect quarter tax $X.X first amortization the the in and goodwill of million intangible $XX.X for first purposes. year. loss noncash $X.XX net expense not compared million of to the a assets a of noncash loss for we of current expense quarter share or income but last created loss or million loss or to -- was $X.XX lived

the million. million under totaled with facility. credit sheet. of our agreements revolving $XX.X ended to $XX.X our the Borrowings availability balance now debt under quarter Moving We

as the reflects million to quarter end Moving material product as raw in the the to inventory first increased related The inflation of as $XX.X compared in last the pre-fall product to costs increase and million year. to inventory. comparison of the at quarter first product, replenishment Net inventory investment higher level of at a $XX.X prior year. end higher well in a was transportation

to Looking given the we're the guidance of providing second not quarter, specific lack chain and ahead at the this macro environment, related to visibility the time. supply

outlook of which our spoke to However, help mentioned regarding of some call QX I in the transportation mitigate for On I we would to early impact have steps continued you like May, inflation, some of product to we and cost and context year. provide our taken several earlier. remainder the the

to meaningfully We expect compared the to quarter at these levels the higher factors year. contribute prior the inventory end to of second

second net to the total levels. quarter, we remain pre-COVID expect For company above sales

the off-price margin channel higher to chain experience DTC cost to in gross mix, in inflation expect due we the specifically supply and pressure sales However, unfavorable higher channel, continued potentially channel. promotions meaningful

have back costs the expect and some improve price Looking margin at mix. half gross an increased the chain supply we trends as to channel of we of the rebalanced our benefit see increases, year, from lap

to with capital investments similar continue our drive focus we on expenditures, to to expect For we as digital below XXXX net a allowances XXXX fiscal be more continue digital XXXX, of tenant to and transformation.

in will key This concludes continue business. we first regarding ahead, to to on our executing growth Looking strategies comments our drive quarter. focus our my

Operator? now will your take We questions.

[Operator Our Dana first Instructions] Telsey from with Advisory Telsey question comes Group.

Nice I can you environment product acceptance this and follow-up for have talked like differ when online about seeing tell little in-store? does you And women's? bit well. us categories are. and there, constructively are What a differ of to navigating men's a product see between the it Jack, versus different you And then how about you does it Dave. performing

question. good Dana, Sure.

linen even lot though, specifically on by were year. of side is It that seeing other things In seeing year. men's very, of stronger Linen wovens, a lot pull-on of woven Along be to of of They we're terms also our mean of They is categories, spring. lot a this were pull-on return product. what some work the fabrications like we're very with strong. pants that, strong this pants last and a

seeing not of in casual we're So that's the week differential the at of -- women's working a online, days. skirts addressing a side other down dresses, we we're that few strength as Very, terms model. customer styles strength lot in similar a clearly where a know versus as it's also The there very stressing hybrid seeing well, well. stores similar, in days quite in on in all. breakdown we're seeing but of is on this more

you when then quarter? much days mentioned are takes second how what the given margin price it And levels SG&A inflation you what and margin, do to more at spring/summer you the for -- about type fall of the on buckets, going off-price the expect increases price as about you beyond forward business, puts And think you're taking, and on thinking if about you gross think whether and it. about think increases what and and How SG&A end any merchandise. be QX? Got you gross of about inventory now

Dana, thanks. did and we're said price increases season. But call, we've you our asked. the costing. put you increases of in I look spring can the cover trailing what we when for And as at all in build last

have the specifically of when growing in look -- throughout to which an material side transportation the side, the late also. we year But increase We kind in peak hit at quarter. seen transportation saw especially fourth you on there's definitely its all the

slightly So we've seen some it to stabilize and decline degree.

that but year, As perspective more recognized still anticipating we in costs get on of into the back fall half that are then of pricing we a product we have to also, from the product air can future of seasons was we we'll it reactive mix And water that its half increasing perspective. the not be elevated a on the we because the your year need able be other to port the both Shanghai and where but freight in percentage seeing, and we'll goes versus we air see levels had inventory in from have back the what are of better congestion anticipating versus product. we're is And has about question was levels. while issues. The that --

because are We not in items that we the of some inventory half volume goods. sales we've an last opportunity that -- investment we for missed made in replenishment enough seeing have We back year in felt QX there. did

things. have pre-spring as sweaters opportunity congestions our a bigger more this We've we and think inventory go that an investment port fight spring through to And then, in at freight we've we lightweight seasons. looking and year. that we're will as higher the sustainability the made of So kind will drive also which and

been or doors that with forward? that the And in this may and are you or think then that that it are And you there out whether canceling planning we've do it's orders going mentioned wholesale wholesale Saks your falling of up it. when seeing you what are and Got you hearing are because be. or -- Bloomingdale's, in marketplace, too? opening expansion, does dealing you're you accounts how How whatever orders, to

we've that just take one. seasons Look, I the to seems continue. that of I'll some conservatism and last couple over Yes think seen

partners. all some good partnership very heard We very of with with relationships them. I've collaboration. pleased things wholesale of have get And four but the We we're the our and same big with

we've aware You're come Saks. do that recently decided business, to we to agreement with an

the But and a So that's to ways right climate with again. We where collaborate we that very, we're victories talking now. -- goes. about this mitigate a excited very to I share on it's other good And new department figure weekly them our relationship three see I to the basis think relationship and feel out searches.

it. just Taylor, occasion reopening, hear the on dresses in are the we Got Rebecca terms and wear? what And seeing about that of then strength you given

it assortment we where Absolutely. year, innings early in brand still really figuring this more Yes. And the our out than year success. did it candidly. last reflects the had that here We're some even

figure still on we're still large don't Rebecca, things events. we and We But working work we remind Vince. want have categories, them figuring other different large couple you that other side get to victories can't be very out. a with very that out have have categories on and some as well that mentioned I with this really we're a just -- start And and ourselves some some and And collection overemphasize too are we how figuring collection until start in the to the to we're to to that them. building business we out of

experienced? very you international but about well. and Yes. reopening hearing been What then the a doing have business you we've And small have international

ride international wood, on solid, had our we've with business. steady knock actually We Yes. very a

Inglés Australia Korea strong. very department fact added grow We're pandemic. been Spain. Spain it. has the another they've with El well. about has we just where store We shockingly as the Corte continue just been been strong given in to with excited

Shanghai and with go we this Looking forward that where with seeing opening China to in fall year. next

we're we like So we're no, Europe and would we bullish what we're in seeing I very business. on say in what We see our like -- especially international Asia.

I back conclude. turn will now call the Jack to to

with forward as We and a issues earnings and you, robust be summer Thank be be to your of as and this opportunities concludes activity. are -- a Thank with Thank you. call. our we'll operator. to clearly our XXXX this September seized. QX micro business for well today look you There earnings time in and macroeconomic and really to back macro selling dealt concludes political QX

Thank you, call everyone, our now may and disconnect for conference concludes joining us today. This your you lines.