Vince Holding Corp.

Good afternoon. Thank you for attending the VINC second quarter 2024 earnings conference call. My name is Victoria, and I'll be your moderator today. All lines will be muted during the presentation portion of the call with opportunity for questions and answers at the end. If you'd like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to your host, Akiko Okuma. Thank you. You may proceed, Akiko.

Thank you, and good afternoon, everyone. Welcome to Vince Holding Corp's second quarter fiscal 2024 results conference call. Hosting the call today is Dave Stesco, Interim Chief Executive Officer, and John Suspansky, 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 filings, 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. In addition, in today's discussion, the company is presenting its financial results in conformity with GAAP and on an adjusted basis. The adjusted results that the company presents today are non-GAAP measures. Discussions of these non-GAAP measures and information on reconciliations of them to their most comparable GAAP measures are included in today's press release and related schedules, which are available in the investor section of the company's website at investors.vince.com. Now I'll turn the call over to Dave.

Thank you, Akiko, and thank you, everyone, for joining us this afternoon. I will begin with a review of highlights from our second quarter performance before turning the call over to John to discuss our financial results and outlook in more detail. Overall, we are pleased with our second quarter results. We delivered sales growth of nearly 7% and adjusted operating margin of 1.5%, driven by 80 basis points of gross margin expansion and ongoing disciplined expense management. These results exceeded our guidance as we benefited from the timing of wholesale orders which shipped earlier than expected. That said, excluding the benefit from these earlier shipments, our underlying wholesale business was solid and performed in line with our expectations as we have now normalized our off-price business and are seeing strong demand across our key partners. The strength of our wholesale business helped to offset softer performance in our direct-to-consumer business, which continued to be impacted by our pullback in promotional activity across our store and e-commerce channels, as well as a lower mix of markdown units due to tight inventory management and fewer stores compared to the prior year. This was particularly felt in the latter part of the quarter, which is a typical sale period across retail. and customers are less inclined to pay full price for product, especially ahead of the fall season. So despite seeing healthier traffic trends in the quarter, our focus on maintaining a strong full price assortment weighed on conversion during the period. However, taking into account these dynamics, we are pleased to continue to drive a year-over-year mid-single-digit growth rate in our full price customer file in the quarter. During the quarter, we saw strength across both our women's and men's businesses. In women's, customers gravitated toward our sweaters and our knit tops and bottoms. In addition, our men's customer continued to respond well to our linen program, as well as our knit t-shirts as he shopped with a much more buy now, wear now mindset. We are looking forward to continuing to expand our men's business, and in the fall season, we are excited for our newly launched enhanced bottoms program, which highlights an elevated product offering a broader range of fits with superior Italian fabrics at a competitive retail price. This was the first quarter for events where we had men's in all Nordstrom doors. We are excited by the good response to both our men's and women's products during the annual anniversary sale, which drove record results for us this year. Once again, Vince was mentioned by Nordstrom on its latest earnings call as one of its strong brands in women's apparel this past quarter. Nordstrom continues to be a strong partner and together we're working closely on initiatives to enhance the Vince experience in their stores. Along with our relationship with Nordstrom, we are continuing to see solid demand across other key wholesale partners and are pleased to be in a healthier inventory position to better fulfill demand and capitalize on replenishment orders in season. As we enter the fall season, we lean into key franchise categories for events that we have highlighted in our future heritage campaign, which was recently highlighted in Women's Wear Daily and Forbes. The campaign features leathers and cashmere, as well as suede, tweed, and plaid patterns. Through this campaign, we are continuing to invest into more top of funnel marketing as we look to amplify our brand awareness. In addition to our brand marketing investments, as we head into the second half of the year, we are working to drive customer acquisition via new traffic driving and targeted audience campaigns. We have plans to continue to enhance our customer acquisition efforts through initiatives focused on increasing lifetime value across our customer base, especially across our top 10% of customers who represent nearly 40% of demand across full price direct to consumer. The teams are finalizing the plans this month with respect to this initiative, so we're well positioned to launch ahead of the holiday quarter. As we have moved into fall, we're also seeing a greater engagement with our customer across key marketing channels. Our fall launch teaser was our top performing social media post for August. Our email highlighting our fall lookbook outperformed last year's message and our fall direct mail significantly outperformed last year's mailing as the fall collection is resonating with customers. As we look ahead beyond this fall, we continue to see a long runway for growth for events through ongoing customer acquisition, growth of our men's business, new store openings, and international expansion. With respect to our international business, we're seeing solid sales growth from our first London store and are evaluating potential opportunities to expand in that region over time. We continue to see opportunities within Europe to expand our presence, but we will be taking a more measured approach to the rest of the world as we are navigating a dynamic environment, particularly in China. We have recently made the decision, along with our operating partner, to pause our operations in China and focus on efforts in regions that have greater productivity and profitability opportunity at the moment. This decision does not have a material impact on our financial results or outlook, and we expect the two test stores will be closed before the end of the fiscal year. Our focus today is to position Vince for long term sustainable growth, and we believe through the actions and strategies we are executing, we are delivering on this objective. A key element to this progress is our transformation plan. And through our team's efforts at the end of the second quarter, we are ahead of our mid-year fiscal 2024 target. In addition to our work, we're also maintaining a strong relationship with Authentic through our strategic partnership in ABG Vents. ABG Vents recently launched its Peerless Men's Suiting Collection under the Vents label in select wholesale partners and expects to launch its Centric Brands collection of handbags, belts, and small leather goods under the Vince label beginning in 2025. In closing, we are pleased with our first half results and the progress we are making across our businesses. While we have seen some improvement in trends in our direct consumer channel into September, we believe it is prudent to update our sales guidance for the year to reflect a more cautious top line outlook given the increasingly uncertain environment with respect to consumer spending and the potential impact from the shorter holiday shopping season as well as the upcoming November election. That said, our wholesale business continues to remain on track with our expectations and we are very pleased to raise our profitability outlook despite the change in our overall top line expectations. I want to thank all of our teams as they continue to execute and deliver on our objectives while maintaining a strong focus on strengthening our relationships with our customers and wholesale partners. We have strong confidence in the future for Vince and are committed to continuing to position Vince for long-term success. Our board recently approved a stock repurchase program, and as John will review, we intend to continue to be disciplined stewards of capital with a strong focus on investing in our business, executing on our operating model and delivering value to all our stakeholders. I'll now turn it over to John to discuss our financial results and outlook in more detail. John?