VINCE HOLDING CORP.

Previous wording

Net sales for the three months ended May 3, 2025 were $57,933, decreasing $1,238, or 2.1%, versus $59,171 for the three months ended May 4, 2024.

Current wording

Net sales for the three months ended August 2, 2025 were $73,241, decreasing $928, or 1.3%, versus $74,169 for the three months ended August 3, 2024.

Previous wording

Gross profit decreased 2.5% to $29,163 for the three months ended May 3, 2025 from $29,913 in the prior year first quarter. As a percentage of sales, gross margin was 50.3%, compared with 50.6% in the prior year first quarter. The total gross margin rate decrease was primarily driven by the following factors:

Current wording

Gross profit increased 5.1% to $36,938 for the three months ended August 2, 2025 from $35,131 in the prior year second quarter. As a percentage of sales, gross margin was 50.4%, compared with 47.4% in the prior year second quarter. The total gross margin rate increase was primarily driven by the following factors:

Previous wording

The unfavorable impact from higher freight and duty costs of approximately 260 basis points;

Current wording

The unfavorable impact from higher tariffs of approximately 170 basis points; and

Previous wording

The unfavorable impact of higher distribution and handling costs of approximately 60 basis points; partially offset by

Current wording

The unfavorable impact of increased freight costs of approximately 100 basis points.

Previous wording

Selling, general and administrative ("SG&A") expenses for the three months ended May 3, 2025 were $33,601, increasing $1,658, or 5.2%, versus $31,943 for the three months ended May 4, 2024. SG&A expenses as a percentage of sales were 58.0% and 54.0% for the three months ended May 3, 2025 and May 4, 2024, respectively. The change in SG&A expenses compared to the prior fiscal year period was primarily due to:

Current wording

Selling, general and administrative ("SG&A") expenses for the three months ended August 2, 2025 were $25,787, decreasing $8,214, or 24.2%, versus $34,001 for the three months ended August 3, 2024. SG&A expenses as a percentage of sales were 35.2% and 45.8% for the three months ended August 2, 2025 and August 3, 2024, respectively. The decrease in SG&A expenses compared to the prior fiscal year period was due primarily to approximately $7,200 of decreased compensation and benefits, due mainly to the ERC benefit of $5,613 which was recorded as an offset to compensation expense, and also a decrease in severance costs. Professional service fees also decreased by approximately $490 from the prior fiscal year period.

Previous wording

Interest expense, net decreased $790, or 48.0%, to $856 in the three months ended May 3, 2025 from $1,646 in the three months ended May 4, 2024, primarily due to lower levels of debt under the Third Lien credit facility.

Current wording

Interest expense, net decreased $798, or 48.5%, to $849 in the three months ended August 2, 2025 from $1,647 in the three months ended August 3, 2024, primarily due to lower levels of debt under the Third Lien credit facility.

Previous wording

Equity in net income (loss) of equity method investment for the three months ended May 3, 2025 and May 4, 2024 was income of $491 and a loss of $465, respectively, and consists of the Company's proportionate share of ABG Vince's net income (loss).

Current wording

Equity in net income (loss) of equity method investment for the three months ended August 2, 2025 and August 3, 2024 was $256 and $292, respectively, and consists of the Company's proportionate share of ABG Vince's net income (loss).

Previous wording

Vince Direct-to-consumer segment—consists of the Company's operations to distribute Vince brand products directly to the consumer through its Vince branded full-price specialty retail stores, outlet stores, and e-commerce platform, and its subscription service Vince Unfold.

Current wording

Vince Direct-to-consumer segment—consists of the Company's operations to distribute Vince brand products directly to the consumer through its Vince branded full-price specialty retail stores, outlet stores, and e-commerce platform.

Previous wording

Net sales from our Vince Direct-to-consumer segment decreased $1,271, or 4.4%, to $27,643 in the three months ended May 3, 2025 from $28,914 in the three months ended May 4, 2024. Comparable sales, including e-commerce, increased $700, or 2.8%, driven primarily by an increase in e-commerce traffic. Non-comparable sales, including Vince Unfold, declined $1,971. Since May 4, 2024, four net stores have closed bringing our total retail store count to 58 (consisting of 44 full price stores and 14 outlet stores) as of May 3, 2025, compared to 62 (consisting of 47 full price stores and 15 outlet stores) as of May 4, 2024.

Current wording

Net sales from our Vince Direct-to-consumer segment increased $1,494, or 5.5%, to $28,479 in the three months ended August 2, 2025 from $26,985 in the three months ended August 3, 2024. Comparable sales, including e-commerce, increased $1,950 or 8.1%, due to an increase in both e-commerce and retail stores volume. Non-comparable sales, including Vince Unfold, which was exited in the first quarter of fiscal 2025, declined $456. Since August 3, 2024, three net stores have closed bringing our total retail store count to 58 (consisting of 44 full price stores and 14 outlet stores) as of August 2, 2025, compared to 61 (consisting of 47 full price stores and 14 outlet stores) as of August 3, 2024.

Previous wording

Our Vince Direct-to-consumer segment had a loss from operations of $800 in the three months ended May 3, 2025 compared to a loss from operations of $64 in the three months ended May 4, 2024. The change was primarily driven by an increase in SG&A expenses, primarily occupancy, marketing, and expenses related to remodels and relocations.

Current wording

Our Vince Direct-to-consumer segment had income from operations of $211 in the three months ended August 2, 2025 compared to a loss from operations of $1,398 in the three months ended August 3, 2024. The increase was primarily driven by an increase in net sales and an improved gross margin.

Previous wording

The favorable impact of lower product costing and higher pricing of approximately 330 basis points; and

Current wording

The favorable impact from lower product costing and higher pricing which contributed positively by approximately 330 basis points;

Previous wording

Gain on sale of subsidiary for the three months ended May 4, 2024 was $7,634 related to the sale of Rebecca Taylor. See Note 2 "Recent Transactions" to the Condensed Consolidated Financial Statements in this Quarterly Report for further information.

Current wording

Gain on sale of subsidiaryfor the six months ended August 3, 2024 was $7,634 related to the sale of Rebecca Taylor. See Note 2 "Recent Transactions" to the Condensed Consolidated Financial Statements in this Quarterly Report for further information.

Previous wording

Provision (benefit) for income taxes for the three months ended May 3, 2025 was $0, as the Company has year-to-date ordinary pre-tax losses for the interim period and is anticipating annual ordinary pre-tax income for the fiscal year. The Company has determined that it is more likely than not that the tax benefit of the year-to-date ordinary pre-tax loss will not be realized in the current or future years. As such, the Company did not record any tax expense for the three months ended May 3, 2025, as tax provisions for interim periods should not be recognized until the Company has year-to-date ordinary pre-tax income.

Current wording

For the six months ended August 2, 2025, the Company has year-to-date ordinary pre-tax losses for the interim period and is anticipating annual ordinary pre-tax income for the fiscal year. The Company has determined that it is more likely than not that the tax benefit of the year-to-date ordinary pre-tax loss will not be realized in the current or future years and as such, tax provisions for the interim periods should not be recognized until the Company has year-to-date ordinary pre-tax income.

Previous wording

The benefit for income taxes was $887 for the three months ended May 4, 2024, which was primarily driven by $1,681 of discrete tax benefit primarily recognized from the reversal of a portion of the non-cash deferred tax liability related to the Company's equity method investment, which a portion can now be used as a source of income to support the realization of certain deferred tax assets related to the Company's net operating losses. This was partially offset by tax expense of $794 due to the impact of applying the Company’s estimated effective tax rate for the fiscal year to the three-month pre-tax loss excluding discrete items.

Current wording

The benefit for income taxes was $1,681 for the six months ended August 3, 2024. The benefit represents the discrete tax benefit recorded during the first quarter of fiscal 2024 primarily recognized from the reversal of a portion of the non-cash deferred tax liability related to the Company's equity method investment, which a portion can now be used as a source of income to support the realization of certain deferred tax assets related to the Company's net operating losses.

Previous wording

(1) Activity for the Rebecca Taylor and Parker reconciling item for the three months ended May 4, 2024 primarily consists of the gain recognized on the sale of Rebecca Taylor.

Current wording

(1) Activity for the Rebecca Taylor and Parker reconciling item for the six months ended August 3, 2024 primarily consists of the gain recognized on the sale of Rebecca Taylor.

Previous wording

Income from operations from our Vince Wholesale segment decreased $787, or 7.7%, to $9,397 in the three months ended May 3, 2025 from $10,184 in the three months ended May 4, 2024, primarily driven by a decrease in gross margin.

Current wording

Income from operations from our Vince Wholesale segment decreased $392, or 1.5%, to $26,455 in the six months ended August 2, 2025 from $26,847 in the six months ended August 3, 2024, primarily driven by a decrease in net sales, partially offset by improved gross margin.

Previous wording

Net cash used in operating activities during the three months ended May 3, 2025 was $11,817, which consisted of a net loss of $4,803, impacted by non-cash items of $2,601 and cash used in working capital of $9,615. Net cash used in working capital resulted from cash outflows due to a decrease in accounts payable and accrued expenses of $11,560, due primarily to timing of payments, cash outflows in prepaid expenses and other current assets, due primarily to prepaid royalty payments, and an increase in inventories, partially offset by cash inflows from receivables of $9,873 mainly attributable to timing of collections.

Current wording

Net cash used in operating activities during the six months ended August 2, 2025 was $7,615, which consisted of net income of $7,257, impacted by non-cash items of $3,811 and cash used in working capital of $18,683. Net cash used in working capital primarily resulted from cash outflows of $17,521 due to an increase in inventories related to the timing of inventory receipts and increased costs due primarily to the impact of tariffs, and cash outflows in accounts payable and accrued expenses due to mainly to inventory purchases, partially offset by a decrease in receivables due to timing of collections.

Previous wording

Net cash used in operating activities during the three months ended May 4, 2024 was $3,878, which consisted of net income of $4,380, impacted by non-cash items of $(5,731) consisting primarily of the gain on sale of subsidiary, and cash used in working capital of $2,527. Net cash used in working capital primarily resulted from cash outflows in prepaid expenses and other current assets of $1,952, primarily due to prepaid royalty expenses, an increase in receivables driven by the timing of sales, and cash outflows in accounts payable and accrued expenses of $871, primarily due to the timing of payments to vendors, partially offset by a reduction in inventory of $2,100.

Current wording

Net cash used in operating activities during the six months ended August 3, 2024 was $7,072, which consisted of net income of $4,949, impacted by non-cash items of $(2,793) consisting primarily of the gain on sale of subsidiary, and cash used in working capital of $9,228. Net cash used in working capital primarily resulted from cash outflows due to an increase in receivables driven by the timing of sales, an increase in inventories due to seasonal cadence, and cash outflows in prepaid expenses and other current assets, primarily due to prepaid royalty expenses, partially offset by an increase in accounts payable and accrued expenses, primarily due to seasonal increases in inventory.

Previous wording

Net cash used in investing activities of $1,424 during the three months ended May 3, 2025 and $740 during the three months ended May 4, 2024 represents capital expenditures primarily related to retail store buildouts, including leasehold improvements and store fixtures.

Current wording

Net cash used in investing activities of $3,530 and $1,421 during the six months ended August 2, 2025 and August 3, 2024, respectively, represents capital expenditures primarily related to retail store buildouts, including leasehold improvements and store fixtures.

Previous wording

Net cash provided by financing activities was $15,219 during the three months ended May 3, 2025, primarily consisting of $15,350 of net borrowings under the Company's revolving credit facilities.

Current wording

Net cash provided by financing activities was $11,319 during the six months ended August 2, 2025, primarily consisting of $11,450 of net borrowings under the Company's revolving credit facilities.

Previous wording

Net cash provided by financing activities was $5,003 during the three months ended May 4, 2024, primarily consisting of $5,000 of net borrowings under the Company's revolving credit facilities.

Current wording

Net cash provided by financing activities was $8,081 during the six months ended August 3, 2024, primarily consisting of $8,130 of net borrowings under the Company's revolving credit facilities.

Previous wording

The Company incurred $0 and $8 of financing costs during the three months ended May 3, 2025 and May 4, 2024, respectively. In fiscal 2024, the Company incurred $466 (of which $458 were incurred in connection with the P180 Acquisition) of financing costs. In accordance with ASC Topic 470, "Debt", these financing costs were recorded as deferred debt issuance costs (which is presented within Other assets on the Consolidated Balance Sheets) and are amortized over the term of the 2023 Revolving Credit Facility.

Current wording

No financing costs were incurred during the three and six months ended August 2, 2025. The Company incurred $0 and $8 of financing costs during the three and six months ended August 3, 2024, respectively. In fiscal 2024, the Company incurred $466 (of which $458 were incurred in connection with the P180 Acquisition) of financing costs. In accordance with ASC Topic 470, "Debt", these financing costs were recorded as deferred debt issuance costs (which is presented within Other assets on the Consolidated Balance Sheets) and are amortized over the term of the 2023 Revolving Credit Facility.

Previous wording

As of May 3, 2025, the Company was in compliance with applicable covenants. As of May 3, 2025, $20,410 was available under the 2023 Revolving Credit Facility, net of the Loan Cap, and there were $26,763 of borrowings outstanding and $6,161 of letters of credit outstanding under the 2023 Revolving Credit Facility. The weighted average interest rate for borrowings outstanding under the 2023 Revolving Credit Facility as of May 3, 2025 was 7.0%.

Current wording

As of August 2, 2025, the Company was in compliance with applicable covenants. As of August 2, 2025, $42,607 was available under the 2023 Revolving Credit Facility, net of the Loan Cap, and there were $22,862 of borrowings outstanding and $6,161 of letters of credit outstanding under the 2023 Revolving Credit Facility. The weighted average interest rate for borrowings outstanding under the 2023 Revolving Credit Facility as of August 2, 2025 was 6.9%.

Previous wording

All obligations under the Third Lien Credit Facility are guaranteed by the Company, Vince Intermediate and the Company's existing material domestic restricted subsidiaries as well as any future material domestic restricted subsidiaries and are secured on a junior basis relative to the 2023 Revolving Credit Facility by a lien on substantially all of the assets of the Company, Vince Intermediate, V Opco and the Company's existing material domestic restricted subsidiaries as well as any future material domestic restricted subsidiaries.

Current wording

All obligations under the Third Lien Credit Facility are guaranteed by the Company, Vince Intermediate and the Company's existing material domestic restricted subsidiaries as well as any future material domestic restricted subsidiaries and are secured on a junior basis relative to the 2023 Revolving Credit Facility by a lien on substantially all of the assets of the Company, Vince