second quarter of fiscal 2026
Filed Sep 10, 2026Net Sales Increased 11.7% to $81.8 Million vs. 2Q25 Raises Full Year Fiscal 2026 Guidance
Net sales increased 11.7%, both wholesale and direct-to-consumer grew by double digits, adjusted operating income and adjusted EBITDA increased materially, and the Company raised full-year fiscal 2026 guidance for the Vince Business.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $81.8M | – | increased 11.7% |
| Cost of products soldGAAP | $31.95M | – | – |
| Gross profitGAAP | $49.8M | – | – |
| Gross marginGAAP | 60.9% of net sales | – | – |
| Gross margin excluding the benefit of the tariff refundother | 48.2% | – | – |
| Selling, general, and administrative expensesGAAP | $36.3M | – | – |
| Selling, general, and administrative expenses as a percentage of salesGAAP | 44.3% of sales | – | – |
| Income from operationsGAAP | $13.6M | – | – |
| Income from operations as a percentage of net salesGAAP | 16.6% | – | – |
| Adjusted income from operationsnon-GAAP | $16.4M | – | – |
| Income before income taxes and equity in net income of equity method investmentGAAP | $13.34M | – | – |
| Income tax expenseGAAP | $3.1M | – | – |
| Equity in net income of equity method investmentGAAP | $ 398 | – | – |
| Net incomeGAAP | $10.6M | – | – |
| Diluted earnings per shareGAAP | $0.80 per diluted share | – | – |
| Adjusted net incomenon-GAAP | $13.5M | – | – |
| Adjusted diluted earnings per sharenon-GAAP | $1.02 per diluted share | – | – |
| Adjusted EBITDAnon-GAAP | $18M | – | – |
| Six-month net salesGAAP | $145.8M | – | – |
| Six-month gross profitGAAP | $82.23M | – | – |
| Six-month gross marginGAAP | 56.4% | – | – |
| Six-month income from operationsGAAP | $10.91M | – | – |
| Six-month net incomeGAAP | $8.50M | – | – |
| Six-month diluted earnings per shareGAAP | $ 0.65 | – | – |
| Six-month adjusted EBITDAnon-GAAP | $16.86M | – | – |
| Company-operated Vince storesother | 53 company-operated Vince stores | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Vince WholesaleThe year-over-year increase was driven by a 10.4% increase in the wholesale segment. | $49.4M | – | increased 10.4% |
| Vince Direct-to-consumerThe year-over-year increase was driven by a 13.7% increase in the direct-to-consumer segment. | $32.4M | – | increased 13.7% |
third quarter of fiscal 2026 and fiscal 2026 for the Vince Business; outlook does not include the OVO Business outlook
- RevenueThird quarter of fiscal 2026: Net sales to increase approximately 5% to 8% compared to the prior year period. Fiscal 2026: Net sales to increase approximately 8% to 10% compared to the prior year.
- NoteThird quarter of fiscal 2026: Adjusted operating income as a percentage of net sales to be approximately 7.5% to 8.5%.
- NoteThird quarter of fiscal 2026: Adjusted EBITDA as a percentage of net sales to be approximately 8.5% to 9.5%.
- NoteFiscal 2026: Adjusted operating income as a percentage of net sales to be approximately 7.5% to 8.0%.
- NoteFiscal 2026: Adjusted EBITDA as a percentage of net sales to be approximately 9.0% to 9.5%.
Capital returns
- During the quarter ended August 1, 2026, the Company did not make any offerings or sales of shares of common stock under the Virtu At-the-Market Offering.
- At August 1, 2026, $0.9 million was available under the Virtu At-the-Market Offering.
- VNCE acquired a 5% equity interest in the OVO IP holding entity for $6 million.
What drove it
- Total Company net sales increased 11.7%, driven by a 13.7% increase in direct-to-consumer and a 10.4% increase in wholesale.
- Gross margin included a favorable impact of $10.4 million related to the IEEPA tariff refund.
- Higher product costing contributed negatively by approximately 160 basis points and higher freight costs contributed negatively by approximately 130 basis points.
- Wholesale segment income from operations included $7.2 million of IEEPA tariff refunds and direct-to-consumer segment income from operations included $3.2 million of IEEPA tariff refunds.
- SG&A reflected anniversarying last year's $5.6 million ERC benefit and $2.9 million of OVO transaction costs.
Concerns
- The reported gross margin rate benefited from $10.4 million related to the IEEPA tariff refund; gross margin excluding that benefit was 48.2%.
- The Company cited higher product costing and higher freight costs as unfavorable gross-margin factors.
- Adjusted results include the benefit from tariff refunds in the second quarter of fiscal 2026.
- The outlook excludes the OVO Business, while the Company incurred approximately $2.9 million of legal and consulting fees in connection with the OVO transaction.
- The forward-looking statements identify the Company's ability to successfully integrate, operate and grow the OVO business and realize the anticipated benefits of the OVO Transaction as a risk.
What to watch
- Vince Business net-sales growth against third-quarter guidance of approximately 5% to 8%.
- Adjusted operating income margin against third-quarter guidance of approximately 7.5% to 8.5%.
- Adjusted EBITDA margin against third-quarter guidance of approximately 8.5% to 9.5%.
- The gross-margin effect of product costing and freight costs after the IEEPA tariff refund benefit.
- OVO integration and the Company's stated opportunity to grow OVO sales to over $100 million and deliver Adjusted EBITDA margins in the low double digit percentage range by fiscal 2030.
Balance sheet and cash flow
- Cash and cash equivalents were $ 1,009 at August 1, 2026.
- Total borrowings under the Company's debt agreements totaled $12.3 million.
- The Company had $63.6 million of excess availability under its revolving credit facility.
- Net inventory was $73.4 million compared to $76.7 million at the end of the second quarter of fiscal 2025.
- The year-over-year decrease in inventory includes approximately $2.6 million of IEEPA refunds.
- Long-term debt was $ 12,250 at August 1, 2026, compared to $ 19,462 at January 31, 2026 and $ 31,096 at August 2, 2025.
Analysis
Vince reported broad-based second-quarter sales growth. Total Company net sales increased 11.7% to $81.8 million from $73.2 million, with wholesale sales up 10.4% to $49.4 million and direct-to-consumer sales up 13.7% to $32.4 million. The Company ended the quarter with 53 company-operated Vince stores. For the first six months, net sales were $ 145,823 compared with $ 131,174 in the prior-year period.
Reported gross profit was $49.8 million and gross margin was 60.9%, compared with $36.9 million and 50.4% in the prior-year quarter. The principal factor was a $10.4 million favorable IEEPA tariff refund. Excluding that benefit, gross margin was 48.2%, which the Company said was in line with expectations. Higher product costing and higher freight costs were unfavorable factors of approximately 160 basis points and approximately 130 basis points, respectively.
GAAP income from operations rose to $13.6 million from $11.2 million, while adjusted income from operations rose to $16.4 million from $5.5 million. Adjusted EBITDA increased to $18.0 million from $6.7 million. GAAP net income declined to $10.6 million, or $0.80 per diluted share, from $12.1 million, or $0.93 per diluted share, reflecting a $3.1 million income tax expense versus $0.1 million a year earlier. SG&A increased to $36.3 million from $25.8 million, primarily due to anniversarying the prior-year $5.6 million ERC benefit and $2.9 million of OVO transaction costs.
Liquidity metrics included $12.3 million of total borrowings, $63.6 million of excess availability under the revolving credit facility, and net inventory of $73.4 million, down from $76.7 million a year earlier. The Company completed the OVO operating-business acquisition on August 27, 2026, made a nominal cash purchase for the operating business, and acquired a 5% equity interest in the OVO IP holding entity for $6 million. The Company did not sell shares through its Virtu At-the-Market Offering during the quarter.
The Company raised its fiscal 2026 outlook for the Vince Business and now expects net sales to increase approximately 8% to 10%, adjusted operating income margin of approximately 7.5% to 8.0%, and adjusted EBITDA margin of approximately 9.0% to 9.5%. Third-quarter guidance calls for net-sales growth of approximately 5% to 8%, adjusted operating income margin of approximately 7.5% to 8.5%, and adjusted EBITDA margin of approximately 8.5% to 9.5%. The outlook includes the benefit of tariff refunds resulting from the Supreme Court's decision on IEEPA tariffs, but excludes the OVO Business.
Management, verbatim
We delivered strong results this quarter, with excellent growth across both our direct-to-consumer and wholesale channels, and this momentum gives us confidence to raise our full-year guidance.
Brendan Hoffman, Chief Executive Officer of VNCE
The acquisition provides a significant growth runway and we see meaningful opportunities to expand OVO's retail presence and launch wholesale distribution through longstanding relationships, positioning the combined platform for substantial long-term value creation.
Brendan Hoffman, Chief Executive Officer of VNCE
Not in the filing
stated, not guessed- Operating cash flow
- Free cash flow
- Capital expenditures
- Share repurchases
- Dividends
- Prior-quarter comparisons for reported operating metrics
- Prior outlook for comparison
- Forward guidance for gross margin
- Forward guidance for operating expenses
- Forward guidance for tax rate
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.