Vince Holding Corp.

Hello everyone and thank you for your patience. The Vince Q1 2022 earnings conference call will be beginning shortly. Thank you. Good morning or good afternoon everyone and welcome to the VINCE Q1 2022 earnings conference call. My name is Emily and I will be coordinating the call today. At the end of today's presentation, there will be the opportunity to ask any questions you may have by pressing start followed by one on your telephone keypads. I will now turn the call over to our host, Amy Levy. Please go ahead.

Thank you, and good morning, everyone. Welcome to Vince Holding Corp's first quarter fiscal 2022 results conference call. Hosting the call today is Jack Schwefel, Chief Executive Officer, and Dave Stesko, Chief Financial Officer. Before we begin, let me remind you that certain statements made on this call may constitute forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ from those that the company expects. Those risks and uncertainties are described in today's press release and in the company's SEC filing, which are available on the company's website. Investors should not assume that statements made during the call will remain operative at a later time and the company undertakes no obligation to update any information discussed on the call. After the prepared remarks, management will be available to take your questions for as long as time permits. Now, I'll turn the call over to Jack.

Thank you, Amy, and thank you, everyone, for joining us this morning for a discussion on our first quarter performance. Having just spoken with you a few weeks ago on our year-end performance, I'm going to provide you with a brief update on the quarter along with trends impacting the remainder of the year. We are pleased with our first quarter results, which were in line with our expectations. We continue to see momentum in Vince with growth this quarter aided by a significant increase in store traffic as customers return to in-person shopping. Additionally, Rebecca Taylor remains on the right path, and we continue to believe this brand can capitalize on meaningful white space. Beginning with a review of our performance at Vince. During the quarter, direct-to-consumer sales exceeded 2019 results led by strength in our e-commerce as well as double-digit growth in our retail stores. While the wholesale channel remains challenged, we meaningfully surpassed 2019 levels, and we continue to see strong sell-through at the retail level. The strength of the brand was exemplified by the lack of distinguishable resistance to our initial price increases, enabling us to partially offset inflationary pressures. Overall, we remain confident that Vince is well-positioned within the everyday luxury category with a superb assortment of sophisticated casual items that strongly resonate with the needs and wants of our customers. During the quarter, we saw a strong response to styles that aligned with the continued trend in return-to-work and social activities, such as pants and blouses, with strong demand for versatile and occasion-based items. Based on the successful swimwear collaboration with NuSwim last year, we launched another collection with them for the spring-summer season. This line, which launched in mid-May, is now available in select stores and on Vince.com. We continue to believe that swim is a category through which we can increase our share of our closet, and we are very excited about this continuing of this partnership. In men's, we saw exceptional growth with double-digit increase on top of double-digit growth last year. Performance was terrific across all categories, particularly linen bottoms, wovens, and contemporary styles. Our team continues to elevate the men's assortment in terms of a more sophistication and fabrications to meet the growing demands of our customers. Similar to women's, on the men's side, we have expanded into swim with a small offering from Outer Known during the quarter, which is available in select stores and on Vince.com. Overall, we are very excited by the momentum in our men's business. which we see as a significant growth opportunity. Looking at store performance, urban locations performed extremely well. In addition, we saw higher than expected traffic in our resort vacation locations, such as Hawaii and Las Vegas. Our Fifth Avenue store, which we reopened a few weeks ago, and is the first and only store that offers extended sizes, has been performing well with strong traffic to date. We are also excited for the recent opened Boston Seaport location, and while still too new to provide initial results, this is a highly desirable location and we are optimistic about the long-term success of this development. Overall, despite ongoing supply chain delays, our stores are experiencing strong momentum with the return to in-person activities, and we plan to lean further into that shift in shopping behavior. While store productivity levels are highly encouraging, e-commerce remains key part of our growth strategy. During the quarter, shift from store accounted for more than 25% of our online sales. Further, we continue to focus on driving full price selling online with emails that emphasize storytelling versus promotion, which proved to be successful during the quarter. On the wholesale front, consistent with what we said last quarter, we anticipate supply chain disruptions and delays will remain a challenge throughout the second half of the year. Our teams continue to closely work with each of our partners as we navigate these challenges. While demand is strong across wholesale partners, we are seeing conservatism in initial buys given the lack of visibility in the macro environment. That said, we are extremely pleased with our men's business at Nordstrom's, which has shown extraordinary growth during the quarter. Additionally, our men's product at Neiman's looks fabulous as we continue to elevate the collection. At Bloomingdale's, where we have been present since the first quarter of 2021, we are particularly excited about the way that Vince Brand is showing and remain confident of this partnership. From a brand perspective, we have continued to execute on the strategy that we've outlined last quarter regarding a disciplined approach throughout the funnel at both Vince and Rebecca Taylor. Following the success of last year's holiday social media campaigns, we launched a campaign this spring called Spring Awakening. which emphasizes new silhouettes and colors. As we head into fall, we will continue to launch clear social media campaigns that highlight relevant brand assets while also showcasing the quality and lifestyle of the brand. Additionally, on social, we remain focused on advancing our influencer strategy, which will be a key to both Vince and Rebecca Taylor in order to increase awareness and drive conversion. We have implemented a layered approach to this strategy, balancing engagement with influencers to drive brand awareness, as well as those influences who can generate revenue. We are very encouraged to see that many of these digital activities are already driving traffic into our stores. During the first quarter, we also started to focus more on video assets, particularly as it relates to social channels. This includes testing and learning on TikTok, which we believe is the future of marketing given its ability to showcase authenticity. Though we were early in stages right now, we are very excited about this opportunity there. Turning to international, encouragingly, our international business has shown growth in full-price sales, both in wholesale and third-party websites, as customers are responding positively to the newness and color of our spring assortment. We saw particular strength in Korea and Australia retail sales, both of which grew double digits during the quarter. We opened one shop-in-shop in El Corte Angles in Madrid during the first quarter, Looking ahead, we plan to open an initial location in Shanghai in the third quarter and to launch online in the back half of the year. Overall, the performance at Vince continues to demonstrate the strength of the brand, and we are extremely excited about the opportunities ahead in the contemporary luxury category. Turning to Rebecca Teller, we continue to find opportunities to grow the brand. The spring assortment with occasion-based items is resonating with our consumer as travel plans increase. The spring and summer months are a sweet spot for the brand, and we are seeing success on specific styles across all categories, but particularly with ruffle sleeve blouses, dresses, cardigans, and skirts. In wholesale, we continue to make strides in strengthening our relationships as we seek to drive market share gains. As we expand the brand, we are learning and testing what works and what doesn't, particularly around brand positioning. The brand resonates with our consumers more strongly when it sits with higher end brands. We also see certain subsets of the assortment are performing better than others and will lean into that consumer demand. As a reminder, we currently have 18 Rebecca Taylor stores, 10 of which are full priced and 8 of which are outlet stores. Our increased marketing investments continue to show results as our social engagement rate sequentially increased approximately 42% during the quarter. The brand continues to utilize micro-influencers, particularly performance influencers, to drive product sales and customer acquisition. Through the spring-summer season, we are building upon the concept of travel around the world that we discussed last quarter. We introduced a series called Near and Far in which global influencers talk about the new direction of the brand, highlighting Rebecca's global cache and everyday occasion dressing. Looking ahead, we will continue to execute a similar strategic plan to what drove success in Vince as we redefined our merchandising assortment and enhanced our brand messaging. Before handing it over to Dave, I want to thank Matt Dottillo for all his hard work over the five years as CIO of Vince, and we wish him the very best on his retirement. We are very excited to welcome Heather Wilberger, who will be joining us as our new CIO, effective July 5th. We believe her strong business acumen and experiences with e-commerce-like industries, data warehouse initiatives, and extensive vendor management relationships will help us execute on our strategies. With that, I will turn it over to Dave.