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| Statement |
|---|
| As we enter the fourth quarter, we are pleased with the progress we are making across our organization and excited for the momentum we are driving |
| It is exciting to see the progress we have made to date, and I believe we have a long runway ahead of us to continue to build on this momentum |
| Year-to-date, we delivered improved profitability over the prior year period despite incurring incremental costs we did not experience in the prior year, given our operating changes with the partnership with authentic, and we have continued to drive momentum across the organization |
| As we look ahead, we will continue to capitalize on the opportunity we see in growing our men's business as a percentage of our total assortment and total sales performance |
| In addition, we expect to continue to drive year-over-year margin expansion supported by freight tailwinds as well as our disciplined approach to inventory and expense management |
| From a margin perspective, we delivered 120 basis points of operating margin expansion for the quarter supported by lower freight expense and lower promotional activity and despite incurring approximately $4 million of royalty expenses that we did not incur in fiscal '22 |
| In direct-to-consumer, we continued to see outperformance in our stores compared to e-commerce but as Jack discussed, we are seeing nice improvement in AOV and engagement on our site |
| As Jack discussed, we are pleased to have delivered third quarter results that reflect a sequential improvement from the second quarter from both the top and bottom line perspective, despite the ongoing macro environment and increased royalty expenses that we did not incur last year |
| While stores have continued to relatively outperform e-commerce from a top line perspective, we are seeing stronger AOV growth on our sites supported by a more effective digital marketing and enhanced focus on in-season engagement |
| I continue to be very proud of our teams and the progress we are making against our strategies and objectives to position Vince for long-term success |
| While we are not providing formal earnings guidance at this time, as Jack noted, we have entered the fourth quarter with solid momentum, and expect to deliver another quarter of sequential top line improvement compared to Q3 driven by the 53rd week as well as ongoing execution across our channels |
| Our third quarter performance exceeded our previously reported preliminary results, and we are pleased to see the sequential improvement across both of our channels compared to the second quarter |
| With more information about our customers, we are in a better position to more effectively drive engagement and therefore, performance especially with our most loyal customers |
| That said, we continue to be pleased with our men's business and saw a particular strength in our pre-fall assortment highlighted by our linen, knit and woven products |
| We have seen a solid start to the quarter and look forward to delivering the experience and assortment our customers are looking for this holiday season as highlighted in our recent heirloom campaign |
| We are pleased overall with the reception to both our pre-fall and fall assortment which was highlighted in our Vince Heroes and Gray Matters marketing campaigns |
| Favorable year-over-year adjustments to inventory reserves, lower freight costs and lower promotional activity |
| We will also improve in-season promotional and markdown pricing management across the DTC channels to move more effective margin-accretive authors |
| As we discussed last quarter, we are beginning to realize the benefits from the investments we have made in our enhanced e-commerce capabilities in CDP platform |
| This is our first freestanding store in China and is the second highest volume shopping center in Mainland China |
| The gifting pages on vince.com have delivered an increase of average order value of 50% compared to the site average, and conversion from these pages is double the site average |
| Under Heather's leadership, we expect to deliver savings through streamlining our manufacturing and production operations, reducing our promotional activity while optimizing the breadth and depth of markdowns as well as enhancing efficiencies within store operations, corporate overhead and third-party spend |
| As we previously announced, we have plans in place through our transformation program to deliver over $30 million in cost savings over the next 3 years which will help to offset the changes in our cost structure given the royalty fees we now incur with our partnership with Authentic Brands Group |
| We will also drive more data-driven pricing and assortment decisions and gradually expand AUR through surgical price increases and optimizing our SKU count while increasing the penetration of our higher-priced assortment |
| The majority of savings will come through expanding gross profit dollars as we reduce our cost of goods sold through implementing more transparent costing with our vendors using advanced analytics and examining our manufacturing footprint |
| And while longer term, we continue to see opportunities to selectively grow our U.S |
| Looking ahead, we remain focused on continuing to position Vince for long-term profitable growth while delivering value for all our stakeholders |
| We are excited for the latest new opening as we continue to expand our presence in the region following our Shanghai opening last year and our distribution with Lane Crawford and NETA-PORTER China site, Fengmal [ph] |
| We are currently assessing opportunities to expand our usage of the CDP platform to increase loyalty and the lifetime value of our customers |
| In addition to our enhancements on our site and focus on gifting, we also leveraged our CDP platform to drive more targeted and enhanced digital and social engagement |
| Statement |
|---|
| Our top line performance was impacted by macro-related headwinds and the strategic decision to pull back on our off-price business within our wholesale channel |
| Vince brand sales declined 6.2% compared to the prior year period |
| Total company net sales for the third quarter decreased 14.7% to $84.1 million compared to $98.6 million in the third quarter of fiscal 2022 |
| The year-over-year decline was driven by a 100% decrease in Rebecca Taylor and Parker combined net sales due to the previously announced wind down of the Rebecca Taylor business, which is complete |
| We continue to expect inventory levels to remain below the prior year reflecting the comparisons to last year as well as the actions we have taken to move through units and our more conservative buys for our current season inventory |
| The Vince brand net sales decrease was driven by year-over-year declines in both our wholesale and direct-to-consumer segments, but reflects a sequential improvement from the second quarter |
| While weather did impact customer buying behavior, which has trended more to buy now wear now mentality, especially with our men's business |
| With respect to our men's business, as I mentioned, we have seen our men's customers gravitate towards a more buy now, wear now behavior and, therefore, a bit more susceptible to weather impacts in the quarter |
| Operating income for the third quarter was $2.8 million compared to an operating loss of $9.4 million in the same period last year |
| Net income for the third quarter was $1 million or $0.08 per diluted share compared to a net loss of $5.2 million or a $0.43 loss per share in the third quarter last year |
| With respect to profitability for the Vince brand, we reported operating profit flat to last year despite lower sales given the current macroeconomic environment and the strategic decision to pull back on the off-price wholesale business |
| The decrease in SG&A dollars was primarily driven by the wind down of the Rebecca Taylor business, resulting in $8.7 million net expense favorability in the third quarter of fiscal 2023 as well as lower expenses related to product development |
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