On December 9, Vince Holding Corp., the parent company of the U.S. contemporary brand Vince, announced its financial results for the third quarter ended November 1, 2025. The quarter saw balanced growth across both the wholesale and direct-to-consumer (DTC) channels, with net sales rising 6.2% year over year to $85.1 million, marking a steady top-line expansion.
DTC Leads Broad-Based Revenue Growth
The primary driver of growth this quarter was the company’s strategically strengthened DTC channel. Wholesale revenue increased 6.7%, while DTC revenue rose 5.5%, with both segments posting solid gains.
Vince’s ongoing investments—store renovations, a refreshed e-commerce platform, expanded marketing, and the introduction of drop-ship capabilities—enhanced the customer experience and broadened product availability online, further accelerating DTC growth.
CEO Brendan Hoffman commented: “We are extremely proud of our third quarter performance, delivering healthy sales growth across all channels while exceeding expectations for both top and bottom line results. Our direct-to-consumer segment is showing broad-based strength benefiting from enhancements we have made to the customer experience.”
The momentum carried into the holiday season, with the DTC channel recording the highest holiday weekend sales in the brand’s history.
DTC Profit Nearly Doubles as Segment Profitability Improves
Profitability also strengthened meaningfully. Total segment operating income rose from $18.8 million to $19.6 million, with DTC profit nearly doubling year over year.
- Wholesale: $18.43 million (up from $18.22 million)
- DTC: $1.18 million (up from $0.61 million)
The sharp improvement in DTC profitability signals that the company’s direct-to-consumer strategy is beginning to deliver tangible financial results.
However, increased corporate expenses—including marketing, design, IT, and administrative costs—resulted in total operating income of $5.4 million, down slightly from $5.76 million in the prior-year period.
Net Income Declines as Tariffs and Freight Costs Pressure Margins
Net income declined to $2.7 million (or $0.21 per diluted share) from $4.3 million a year earlier, primarily due to external cost pressures. Higher tariffs reduced gross margin by approximately 260 basis points, while increased freight costs accounted for another 100 basis-point decline.
Even so, margin-supportive initiatives—pricing adjustments, cost improvements, and reduced discounting—continued to make progress, reflecting Vince’s efforts to strengthen its long-term profit structure.
Full-Year Outlook: Stable Growth Despite Tariff Headwinds
For the fourth quarter of fiscal 2025, the company expects net sales to increase 3% to 7% year over year. Adjusted operating margin is projected to be 0% to 2%, while adjusted EBITDA margin is expected to come in at 2% to 4%, indicating growth while maintaining a stable level of profitability.
However, the company also anticipates $40 million to $50 million in additional tariff-related costs during the fourth quarter, and this impact has already been factored into the latest guidance.
For the full fiscal year 2025, Vince forecasts net sales growth of 2% to 3% year over year, an adjusted operating margin of 2% to 3%, and an adjusted EBITDA margin of 4% to 5%, pointing to a steady growth outlook.
Leveraging ABG Partnership for Long-Term Brand Value
In 2023, Vince entered into a strategic transaction with Authentic Brands Group (ABG), transferring ownership of the Vince intellectual property to ABG. At the same time, Vince secured a long-term licensing agreement—renewable every 10 years—to continue operating its wholesale, retail, and e-commerce businesses.
By leveraging ABG’s global brand management expertise, Vince aims to further strengthen brand equity and drive sustainable long-term growth in the years ahead.
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