Vince Holding (NYSE: VNCE) reported Q3 EPS of $0.73, $0.07 better than the analyst estimate of $0.66. Revenue for the quarter came in at $86.4 million versus the consensus estimate of $90.5 million.

Highlights for the third quarter ended November 2, 2019:

• Net sales increased 3.4% to $86.4 million.
• Direct-to-Consumer comparable sales grew 9.5%.
• Gross margin rate increased 150 basis points to 50.4%.
• Income from operations was $9.1 million compared to $9.0 million in the same period last year. Excluding costs associated with the acquisition of Rebecca Taylor and Parker, adjusted income from operations was $9.8 million.
• Net income improved $1.2 million to $8.0 million or $0.67 per diluted share. Excluding costs associated with the acquisition of Rebecca Taylor and Parker, adjusted net income was $8.7 million or $0.73 per diluted share. This compares to $6.8 million or $0.57 per diluted share in the same period last year.

Brendan Hoffman, Chief Executive Officer, commented, “Our strong performance in the third quarter further demonstrates the continued momentum in the Vince brand. The growth in our direct-to-consumer business was led by our eCommerce channel and we remain pleased with the performance of our retail stores. In our wholesale channel, we continue to see evidence of market share gains and are excited to have expanded floor space in key doors. As we look ahead, we remain focused on advancing our strategic initiatives, which include growing our direct-to-consumer business through the expansion of our store base globally, driving market share gains within the wholesale channel, testing new product categories, and refining our marketing efforts to drive traffic and conversion.

We are also very excited about the recently announced acquisition of Rebecca Taylor and Parker, which enabled us to form a global contemporary fashion group. We believe that the successful strategic initiatives employed by Vince will allow us to significantly grow these two brands on a global scale. We are well positioned to be leaders in the global contemporary space, which will allow us to drive long-term profitable and sustainable growth.”

Fiscal 2019 Outlook

Mr. Hoffman continued, “We are very pleased with the strong momentum in the Vince brand and will continue to advance our strategic growth strategies. As part of this, we have increased strategic investments planned for the fourth quarter of fiscal 2019 to support our long-term growth objectives. In addition, we are going through the necessary steps to complete the required SEC financial filings related to the acquisition of Rebecca Taylor and Parker and we will provide updated full year guidance to reflect the acquisition once this process is complete. Excluding the incremental strategic investments and the impact of tariff cost increases post September 1, 2019, our outlook for the Vince brand in 2019 is consistent with our previous guidance.”

The Company now plans to provide updated guidance for fiscal 2019 to reflect the acquisition of the Rebecca Taylor and Parker businesses by the end of January of 2020. Due to the significance of the in-process accounting procedures relating to the acquisition of Rebecca Taylor and Parker and any potential adjustments therefrom, updating our guidance on a GAAP basis and reconciling the Vince stand-alone guidance provided above will require additional time. Since the acquisition is a transaction between commonly controlled entities, GAAP requires the retrospective combination of the entities for all periods presented as if the combination had been in effect since the inception of common control. Accordingly, the acquisition will reflect historical balance sheet data for Rebecca Taylor and Parker businesses instead of reflecting the fair market value of their assets and liabilities at the time of acquisition. As stated in the press release announcing this transaction, the Company expects the acquisition to be dilutive to fiscal 2019 earnings.

For earnings history and earnings-related data on Vince Holding (VNCE) click here.