Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Vince Holding Corp (NYSE:VNCE) were down more than 16% as of 1:20 p.m. Thursday after the contemporary clothing specialist announced mixed fourth-quarter results and disappointing forward guidance.
So what: Quarterly revenue climbed 7.9% year over year to $94.7 million, helped by a 39.7% increase in direct-to-consumer sales to $25.8 million, and hurt by a 0.6% decline from its wholesale segment to $68.9 million. Comparable-store sales also rose 8.7% over the same period, and 15.5% including e-commerce sales. That translated to a 21.7% increase in adjusted earnings per diluted share to $0.28. Analysts, on average, were expecting lower earnings of $0.26 per share on higher sales of $99 million.
Now what: For all of fiscal 2015, however, Vince expects revenue of $360 million to $370 million, helped by sales from eight to 10 new retail stores and comparable-store sales growth (including e-commerce) in the low double-digit range. Earnings per diluted share should be $1.00 to $1.05, or roughly 10% growth at the mid-point compared to $0.93 per share last fiscal year. Wall Street was more optimistic going in, with consensus estimates calling for full-year earnings of $1.15 per share on sales of $399.1 million.
Vince Holding CEO Jill Granoff added, "While we are resetting our near-term growth plans in domestic wholesale for the long-term health of our brand, we have many growth opportunities in our domestic wholesale business and will continue to focus on strategically driving our productivity within existing doors while maintaining our brand's luxury profile."
That's fair enough. But given its modest growth and with the stock currently trading around 18 times this year's expected earnings, I'm not intrigued enough with Vince Holding's share price to jump at the opportunity. For now, I'm perfectly content keeping an eye on Vince Holding stock from the sidelines to see how well it executes against its stated goals in the coming quarters.