Vince Q2 sales drop, diversifies sourcing to reduce tariff exposure

Vince Holding Corp., a global contemporary retailer, reported its financial results for the second quarter, which ended on August 2, 2025. Despite a slight overall decrease in net sales, the company's direct-to-consumer segment showed strong growth, and its gross margin saw an improvement. Despite the macroeconomic uncertainty, the company's stock rose by 10.67 percent in the aftermarket session to 1.66 dollars, reflecting investor confidence.

Total net sales for the quarter were 73.2 million dollars, a 1.3 percent decrease versus the same period last year due to a 5.1 percent drop in the wholesale segment, a result of shifting the timing of fall shipments. However, this was largely offset by a 5.5 percent increase in the direct-to-consumer segment. Gross profit for the quarter was 36.9 million dollars, representing gross margin of 50.4 percent, an increase from 47.4 percent in the second quarter of 2024.

Cautious yet optimistic outlook

Looking to the third quarter, Vince expects net sales to be flat or increase by up to 3 percent compared to the prior year. The company is not providing a full-year outlook due to ongoing uncertainty related to global tariff policies. During the earnings call, analysts inquired about the potential for elongating selling seasons and the company’s pricing strategy. Vince’s management emphasised their focus on tariff mitigation and clarified store expansion plans, indicating a cautious yet optimistic outlook for the upcoming quarters.

Vince Holding Corp. executives, including CEO Brendan Hoffman and CFO Yuji Okumura, highlighted the company’s proactive strategies for dealing with tariff challenges. Okumura noted that an increase in inventory carrying value was partially due to tariffs and the strategic decision to ship goods earlier to avoid potential reciprocal tariff extensions. The company expects to mitigate about 50 percent of an anticipated 4 to 5 million dollars in incremental tariff costs through changes in country of origin, vendor negotiations, and selective price increases.

Hoffman confirmed that the company has been aggressively reducing its reliance on a single sourcing country, with a goal of capping exposure at 25 percent for any one country. This strategy is expected to be fully in place by the holiday season and into the spring. Hoffman noted that the company has never sourced from India, so it is not impacted by the high tariffs there.

No new stores planned for the year ahead

As of the end of the second quarter, Vince had 58 company-operated stores, a net decrease of three stores since the same time last year. The company recently opened a new location in Nashville, with another in Sacramento scheduled to open in October. There are no other store openings planned for the remainder of the year.

The company also continues to operate under its exclusive, long-term licensing agreement with Authentic Brands Group, a partnership that began in May 2023.