Vince Holding Corp. (VNCE) reported second-quarter fiscal 2026 results that significantly exceeded Wall Street expectations, with adjusted earnings per share reaching $1.02 compared to a consensus estimate of $0.16. That represented a 537.5% surprise over estimates, up from $0.38 a year earlier.
Total net sales climbed 11.7% to $81.8 million from $73.2 million, topping forecasts of $76.89 million. Direct-to-consumer sales rose 13.7%, supported by both store and e-commerce channels, while wholesale revenue increased 10.4% year over year.
Gross profit expanded to $49.8 million, or 60.9% of sales, from $36.9 million, or 50.4%, a year earlier. The company noted the figure included $10.4 million in tariff refunds. Excluding that benefit, gross margin fell 290 basis points due to higher product and freight input costs.
Adjusted EBITDA reached $18 million, up from $6.7 million excluding Employee Retention Credit benefits. Adjusted operating income came in at $16.4 million versus $5.5 million in the prior-year period.
Selling, general and administrative expenses rose to $36.3 million, or 44.3% of sales, from $25.8 million, or 35.2%. The increase reflected $2.9 million in transaction costs tied to the OVO acquisition and tougher comparisons to a prior year that had benefited from a $5.6 million payroll tax credit.
Vince also reported long-term debt of $12.3 million at quarter-end, with net interest expense declining to $0.7 million on lower revolving credit facility balances. Net inventory stood at $73.4 million, down from $76.7 million a year earlier, partly driven by $2.6 million in IEEPA tariff refunds. The company's market capitalization was $81.97 million, trading at a P/E ratio of 9.06.
In a major strategic move, Vince completed its acquisition of a stake in OVO intellectual property on August 27, 2026. Authentic Brands Group acquired a majority stake in OVO's IP, while co-founder Drake retained a 44% stake. Vince holds a 5% IP ownership position alongside a long-term license agreement to manufacture and sell OVO-branded products.
OVO ended calendar year 2025 with approximately $50 million in net sales. Management expects the deal to be earnings-neutral in fiscal 2026 and accretive beginning in fiscal 2027. The company outlined plans to grow OVO into a $100 million-plus revenue business by fiscal 2030, targeting low double-digit adjusted EBITDA margins.
Expansion plans call for increasing OVO's retail footprint from 12 stores to roughly 20 by 2030, primarily in the U.S. A U.S. wholesale launch is targeted for summer or the second half of 2027, with approximately three new U.S. OVO stores expected in fiscal 2027 alongside enhanced e-commerce capabilities. Upon announcement, the transaction generated over 500,000 impressions across owned and external social channels, reaching more than 40 million followers combined.
For the remainder of fiscal 2026, Vince guided for full-year core business net sales growth of 8% to 10% and adjusted operating income margins of 7.5% to 8% of sales. Adjusted EBITDA margins are projected at 9% to 9.5%. Third-quarter guidance calls for net sales growth of 5% to 8% year over year, or 11% to 14% on a two-year basis, with adjusted operating income margins of 7.5% to 8.5% and adjusted EBITDA margins of 8.5% to 9.5%.
Shares traded down 0.78% in premarket action to $6.33, following a previous close of $6.38. The stock has ranged between $1.95 and $8.20 over the past 52 weeks.
