Vince Holding Corp (NYSE:VNCE) take heat post earnings

Vince Holding Corp (NYSE:VNCE) reported earnings for the three months ended April 2016 on June 07, 2016. The company earned $-0.05 per share on revenue of $67.64M. Analysts had been modeling earning per share of $-0.11 with $55.45M in revenue.

Vince Holding Corp (NYSE:VNCE) reported unaudited results for the first quarter of fiscal 2016 ended April 30, 2016.

For the first quarter ended April 30, 2016:

  • Net sales increased 13.0% to $67.6 million from $59.8 million in the first quarter of fiscal 2015. Wholesale segment sales increased 16.9% to $44.8 million and direct-to-consumer segment sales increased 6.1% to $22.9 million over the first quarter of fiscal 2015. Comparable sales decreased 12.3%, including e-commerce sales, which was in line with expectations, due to the planned reduction in promotional activity and inventory levels.
  • Gross profit was $28.3 million, or 41.8% of net sales. This compares to gross profit of $30.7 million, or 51.4% of net sales, in the first quarter of fiscal 2015. The decrease in gross profit rate was primarily attributable to a change in product mix and continued strategic investments.
  • Selling, general, and administrative expenses were $31.8 million, or 47.0% of sales compared to $25.6 million, or 42.9% of sales, in the first quarter of fiscal 2015. The increase in SG&A dollars for the first quarter of Fiscal 2016 includes continued store and strategic investments made to support the Company’s long term goals.
  • Operating loss was $3.5 million, compared to operating income of $5.1 million for the first quarter of fiscal 2015.
  • Net loss was $1.9 million, or $0.05 per share, compared to net income of $2.5 million, or $0.06 per diluted share, for the first quarter of fiscal 2015.
  • The Company opened three new stores, ending the first quarter with 51 company-operated stores.

2016 Outlook

For fiscal 2016, the Company expects:

  • Total net sales between $290 million and $305 million, including revenues from six new retail stores and comparable sales growth inclusive of ecommerce sales in the flat to low-single digit range. The Company expects sales to decrease in the mid- to high-single digit range for the first half of the year and to be flat or increase in the mid-single digit range in the second half of the year as compared to the same prior year periods;
  • Gross margin of approximately 47%;
  • SG&A to be between $131 million and $133 million;
  • Interest expense of approximately $4 million;
  • Diluted EPS of $0.00 to $0.06. The company expects net loss per share to be in the high-single digit to low-teen’s range in the first half of the year due to higher SG&A growth as the result of continued store and strategic investments in early fiscal 2016 and the annualization of store openings and strategic investments made in fiscal 2015. Note that the EPS guidance reflects a share count of approximately 46.4 million, which includes the impact of 11.8 million shares issued in connection with the rights offering; and
  • Capital expenditures between $10 million and $12 million.

Vince Holding Corp earnings per share showed a decreasing trend of -85.5% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 20%.Analysts project EPS decline over the next 5 years at -11%. It has EPS annual growth over the past 5 fiscal years of 15.3% when sales declined -12.4. It reported 13% sales growth, and -178.3% EPS decline in the last quarter.

The stock is trading at $5.52, up 66.77% from 52-week low of $3.31. The stock trades down -58.15% from its peak of $13 and % below the consensus price target of $7.1. Its volume clocked up at 0.29 million shares which is lower than the average volume of 0.33 million shares. Its market capitalization currently stands at $247.28M.

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