Vince Holding Corp. — Second Quarter 2026 Earnings Summary

Financial Performance

• Total net sales increased 11.7% year-over-year to $81.8 million for the quarter ended August 1, 2026, compared to $73.2 million in the prior year period.
• Gross profit was $49.8 million (60.9% of net sales), up from $36.9 million (50.4% of net sales) in the prior year; this includes a $10.4 million favorable impact from IEEPA tariff refunds.
• Gross margin excluding the tariff refund benefit was 48.2%, offset by approximately 160 basis points from higher product costing and 130 basis points from higher freight costs.
• Selling, general, and administrative (SG&A) expenses were $36.3 million (44.3% of sales), compared to $25.8 million (35.2% of sales) in the prior year, driven by the expiration of a $5.6 million Employee Retention Credit (ERC) benefit and $2.9 million in OVO transaction costs.
• Income from operations was $13.6 million compared to $11.2 million in the prior year.
• Adjusted income from operations was $16.4 million compared to $5.5 million in the prior year.
• Net income was $10.6 million ($0.80 per diluted share) compared to $12.1 million ($0.93 per diluted share) in the prior year.
• Adjusted net income was $13.5 million ($1.02 per diluted share) compared to $4.9 million ($0.38 per diluted share) in the prior year.
• Adjusted EBITDA was $18.0 million compared to $6.7 million in the prior year.
• Total borrowings under debt agreements were $12.3 million, with $63.6 million of excess availability under the revolving credit facility.
• Net inventory decreased to $73.4 million from $76.7 million in the prior year, including approximately $2.6 million of IEEPA refunds.

Guidance and Future Outlook

• The Company raised its full-year fiscal 2026 guidance for the Vince Business.
• For Q3 fiscal 2026, the Company expects net sales to increase approximately 5% to 8% year-over-year.
• For Q3 fiscal 2026, the Company expects adjusted operating income to be approximately 7.5% to 8.5% of net sales.
• For Q3 fiscal 2026, the Company expects adjusted EBITDA to be approximately 8.5% to 9.5% of net sales.
• For full-year fiscal 2026, the Company expects net sales to increase approximately 8% to 10% year-over-year.
• For full-year fiscal 2026, the Company expects adjusted operating income to be approximately 7.5% to 8.0% of net sales.
• For full-year fiscal 2026, the Company expects adjusted EBITDA to be approximately 9.0% to 9.5% of net sales.
• The Company targets growing OVO sales to over $100 million and delivering adjusted EBITDA margins in the low double-digit percentage range by fiscal 2030.

Business Segments and Product Lines

• Direct-to-consumer segment sales increased 13.7% to $32.4 million.
• Wholesale segment sales increased 10.4% to $49.4 million.
• The Company completed the acquisition of the operating business of October's Very Own (OVO), a lifestyle brand that delivered nearly $50 million in sales in calendar year 2025.
• The Company acquired a 5% equity interest in OVO's IP holding entity for $6 million.
• The Company ended the quarter with 53 company-operated Vince stores.
• OVO operates 12 flagship retail stores worldwide and its e-commerce site.

Market and Competitive Landscape

• The OVO acquisition allows the Company to enter the streetwear market with a brand possessing deep cultural roots.
• The Company plans to expand OVO's retail presence and launch wholesale distribution through longstanding relationships.
• The Company is leveraging its operating discipline and infrastructure to support OVO's next phase of growth.

Risks and Challenges

• Forward-looking statements involve risks including changes to trade policies and tariffs, general economic conditions, and liquidity needs.
• Risks include the ability to maintain wholesale partners, forecast customer demand, and operate retail stores successfully.
• The Company faces risks related to the integration and growth of the OVO business and realizing anticipated benefits of the transaction.
• Other risks include supply chain reliance, raw material price fluctuations, cybersecurity issues, and compliance with ESG practices.

Management Commentary and Tone

• CEO Brendan Hoffman stated the Company delivered strong results with excellent growth across both direct-to-consumer and wholesale channels.
• Management expressed confidence in raising full-year guidance due to recent momentum.
• Management characterized the completion of the OVO acquisition as a pivotal moment for the Company.
• Management highlighted the opportunity to bring operating discipline and infrastructure to OVO to drive long-term value creation.

Other Key Points

• The Company completed the acquisition of OVO's operating business for a nominal cash purchase.
• The Company did not make any offerings or sales of shares under the Virtu At-the-Market Offering during the quarter; $0.9 million remains available.
• Unallocated corporate expenses included approximately $2.9 million in legal and consulting fees related to the OVO transaction.
• The prior year's SG&A included a $5.6 million benefit from the Employee Retention Credit program which is no longer applicable.
• The Company reported a material weakness in internal control over financial reporting as a risk factor.