Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why Vince Holding Corp. Stock Dropped Today

By Steve Symington - Jul 14, 2015 at 12:06PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Is Vince Holding's drop meaningful? Or just another movement?

What: Shares of Vince Holding Corp. (NYSE: VNCE) were down 16.3% as of 10:30 a.m. Tuesday after the contemporary clothing company announced the impending departure of its CEO.

So what: Referring to a "management reorganization" in a press release Monday after the market close, Vince Holding stated CEO Jill Granoff informed the company of her decision in advance, and will remain CEO for a period to ensure a smooth transition. Relatedly, Vince Holding also announced industry veteran Livia Lee has joined the company as its senior vice president of merchandising, and will report to Ms. Granoff before ultimately succeeding her as CEO. Lee, for her part, has experience with other notable brands including Lacoste, Diesel, Ralph Lauren, Victoria's Secret, and Gap.

In addition, Vince announced chief creative officer Karin Gregersen "has decided to elave the company [...]." Vince does not intend to fill Gregersen's position for the time being.

"While this is a bittersweet decision for me," explained Granoff, "it is the right time for me to pass the reigns to the next leader. Vince is an exceptional brand, and with a strong and seasoned team in place, the Company is well positioned to execute on the opportunities ahead and build on its legacy as one of the preeminent brands in the contemporary space today."

Now what: This isn't Vince Holding's only executive shakeup of late. The news comes less than three weeks after Vince announced then-CFO Lisa Kingler had resigned from the company, which itself helped spur at least one analyst downgrade from Bank of America from "Buy" to "Neutral." The same day, analysts at Piper Jaffray reiterated a "neutral" rating. Similarly this morning, Vince Holding stock suffered another downgrade from analysts at William Blair from "outperform" to "market perform."

It's hard to blame them; though Vince Holding did edge out analysts' estimates on the bottom line by a penny per share last quarter, revenue growth has remained elusive as sales fell 2.3% year over year. And for the current fiscal year, Wall Street expects Vince Holding revenue to climb a modest 1.1% In the end -- and even with shares of Vince Holding trading at a seemingly enticing 10 times both trailing 12-month earnings and next year's expectations, I can't get on board with the stock until the company proves it can retain a solid management team and resume profitable growth.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Vince Holding Corp. Stock Quote
Vince Holding Corp.
$10.19 (0.20%) $0.02
Bank of America Corporation Stock Quote
Bank of America Corporation
$44.15 (0.64%) $0.28
Ralph Lauren Corporation Stock Quote
Ralph Lauren Corporation
$122.56 (5.50%) $6.39
The Gap, Inc. Stock Quote
The Gap, Inc.
$17.34 (3.71%) $0.62

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/06/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.