Vince Holding reported unaudited results for the second quarter of fiscal 2016 ended July 30, 2016.
Article continues below
Net sales decreased 24.1% to $60.7 million from $80.0 million in the second quarter of fiscal 2015.
Wholesale segment net sales decreased 32.1% to $39.6 million due to the planned reduction in full-price orders related to the transition of product under the new design team.
Direct-to-consumer segment net sales decreased 2.8% to $21.1 million compared to the second quarter of fiscal 2015. Comparable sales decreased 18.7%, including e-commerce sales, as a result of declines in the number of transactions, which reflected the planned reduction in inventory levels associated with the product transition.
Gross profit was $27.4 million, or 45.1% of net sales. This compares to gross profit of $20.8 million, or 26.0% of net sales, in the second quarter of fiscal 2015, which includes a $14.4 million charge associated with the write-down of excess inventory and aged product to expected net realizable value.
Excluding the inventory write-down, gross profit in the second quarter of 2015 was $35.2 million, or 44.0% of net sales.
Excluding the write-down in the prior year quarter, the increase in gross profit rate for the second quarter of 2016 reflected the favorable impact from lower year-over-year adjustments to inventory reserves, partially offset by an increase in the rate of sales allowances on lower net sales.
Selling, general, and administrative expenses were $31.6 million, or 52.1% of sales. This compares to $27.3 million, or 34.2% of sales, in the second quarter of fiscal 2015, which included $2.9 million of net management transition costs related to executive severance and related costs.
Excluding these costs, selling, general and administrative costs in the second quarter of 2015 were $24.5 million or 30.6% of net sales.
The increase in SG&A dollars for the second quarter of fiscal 2016 includes costs associated with 10 additional stores, incentive compensation costs and continued strategic investments to support the company’s long term goals.
Operating loss was $4.3 million, compared to operating loss of $6.5 million for the second quarter of fiscal 2015. Excluding the inventory write-down and net management transition costs, operating income for the second quarter of fiscal 2015 was $10.8 million.
Net loss was $2.0 million, or $0.04 per share, compared to net loss of $5.0 million, or $0.14 per share, for the second quarter of fiscal 2015. Excluding the inventory write-down and net management transition costs, net income for the second quarter of fiscal 2015 was $5.2 million, or $0.14 per share.
Vince Holding opened one new store, ending the second quarter with 52 company-operated stores. ■