Vince Holding | The Collapse Continues

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Vince Holding Corp.  (NYSE: VNCE)

 

Vince Holding Corp. (VNCE), a contemporary fashion brand company yesterday reported second quarter fiscal 2015 results. The company reported $0.14 earnings per share which missed consensus estimates of $0.23 by $0.09.

 

Vince Holding Corp.  Earnings and Outlook

Net sales decreased 10.4% to $80.0 million from $89.3 million in the second quarter of fiscal 2014.

Operating loss was $(6.5) million, compared to operating income of $19.9 million for the second quarter of fiscal 2014.  Net loss was $(5.0) million, or $(0.14) per diluted share, compared to net income of $10.5 million, or $0.27 per diluted share, for the second quarter of fiscal 2014. PR Newswire

 

Vince Holding Corp. CEO’s Comments

Mark Brody, Interim Chief Executive Officer of Vince, commented,

Our second quarter financial performance reflects further weakness in sales trends in our wholesale channel with lower than expected sell-through and customer reorders, which in turn led to a significant increase in inventory levels. As a result, we elected to write down current year product to estimated net realizable value. In addition, our off-price customers reported high levels of inventory. In order for us to move forward with our strategy to reduce sales to off-price retailers and to enhance our brand positioning, we made the decision to dispose of the vast majority of prior year product.Based on our recent performance and outlook for continued weakness in the wholesale channel, particularly in the off-price business, and a recent softening in the direct-to-consumer channel, we are reducing our guidance for Fiscal 2015. While our recent performance was disappointing, we are taking corrective actions to protect and enhance the strength of the Vince brand.  Looking ahead, we are focused foremost on making exceptional products with the styles and fits that align with our customers’ expectations.  We are also taking steps to enhance our product assortment and improve operational performance, including tighter inventory and procurement practices which will also help lead to a more carefully managed distribution in the off-price channel. At the same time, we will continue to move forward with our multiple growth strategies including growing our direct to consumer business through both store openings and expansion of the e-commerce channel and expanding our international presence in existing and new markets.”  PR Newswire

VNCE Technical Analysis

VNCE gapped down in price today to $6.02 down from yesterday’s close of $9.27 which is a 35% decrease in price based on bad earnings news. Taking a look at the daily chart we can see that we are in unchartered territory as the stock is sitting at all time lows.  Dating back to Nov 8 of last year when the stock traded at $37.42 the stock has been on a steep decline. During this run there were three times the stock lost more than 15% in one trading day. The first time happened back on Dec 1 when it traded at $36.52 and closed on Dec 2 at $29.48 which was a 19% decrease in price. The second occasion occurred on March 18 when the stock traded at $21.39 and closed the next day at $17.89 which was a 16% decrease. The third time was on June 4 when the stock traded at $15.28 and closed the next day at $12.27 which was a 20% decrease in price. On all three occasions the stock continued its overall downward trend.  With today’s unfavorable news I see no reason for the downward trend not to continue.  The pre market lows reached $5.63 so it did rebound $0.39 at the open. For trading purposes my entry point short would be $6.00 looking for a move down to the pre market lows of $5.63. My stop loss would be the pre market high of $6.25 fearing anything above that and the stock will start to fill in the gap down.

 

Company Profile  

Vince Holding Corp. designs, merchandises, and sells various contemporary fashion brand products in the United States and internationally. It operates through two segments, Wholesale and Direct-To-Consumer. The company offers a range of women’s products, such as cashmere sweaters, silk blouses, leather and suede leggings and jackets, dresses, denims, tanks, T-shirts, pants, handbags, and outerwear; and men’s products comprising T-shirts, knit and woven tops, sweaters, denim, pants, blazers, outerwear, and leather jackets. It also provides women’s and men’s footwear, and children’s apparel products. The company sells its products directly to consumers through its branded specialty retail stores and outlet stores, as well as through Vince.com, an e-commerce platform; and to department stores and specialty stores. As of June 4, 2015, it operated 32 retail stores and 10 outlet stores, as well as VINCE.com, an e-commerce site; and sold its products to consumers at approximately 2,500 distribution locations in 42 countries. The company was formerly known as Apparel Holding Corp. and changed its name to Vince Holding Corp. in November 2013. Vince Holding Corp. was founded in 2002 and is headquartered in New York, New York.  Yahoo Finance

 

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