Recovery Mode
Overall, the general view is that Vince is finally back on the growth path, after a long-drawn slump that earlier pushed it to the brink of an operational overhaul. The reasonable valuation and brand power show the company would maintain the momentum during the remainder of the year and beyond.
Meanwhile, initial estimates indicate that the bottom-line will remain under pressure from the high costs. A potential drag on profitability could be a concern for investors and pose a hindrance to the stock’s recovery.
Q2 Results
For the second quarter, Vince reported earnings of $0.08 per share, compared to a loss last year, even as sales increased 13% annually to $71 million. The results also came in above Wall Street’s prediction.
Acquisition
Last month, Vince purchased women’s apparel brands Rebecca Taylor and Parker. The acquired brands, which recorded a combined net sales of about $84 million during the twelve months ended February 2019, are sold at high-end department stores across the world. The transaction is expected to be dilutive to Vince’s earnings this year.
Vince shares have long been trading below their long-term average, after falling to a historic low a few years ago. The stock entered the recovery path this year, with its value nearly doubling after the last earnings report.