Hello everyone. Thank you for joining us and welcome to Vince's first quarter 2026 earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Akiko Okuma, Chief Administrative Officer. Please go ahead.

Thank you and good morning everyone. Welcome to Vince Holding Corp's First Quarter Fiscal 2026 Results Conference Call. Hosting the call today is Brendan Hoffman, Chief Executive Officer, and Yuji Okamura, Chief Financial Officer. Before we begin, let me remind you that certain statements made on this call may constitute forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ from those that the company expects. Those risks and uncertainties are described in today's press release and in the company's SEC filings, which are available on the company's website. Investors should not assume the statements made during the call will remain operative at a later time, and the company undertakes no obligation to update any information discussed on the call. In addition, in today's discussion, the company is presenting its financial results in conformity with GAAP and on an adjusted basis. The adjusted results that the company presents today are non-GAAP measures. Discussions of these non-GAAP measures and information on reconciliations of them to their most comparable GAAP measures are included in today's press release and related schedules, which are available in the Investor section of the company's website at investors.vince.com. Now I'll turn the call over to Brendan.

Good morning, everyone. Thank you for joining us today to discuss Vince Holdencoe's first quarter fiscal 2026 results. The momentum we built throughout fiscal 2025 has accelerated into the new year, and we are executing our strategic priorities with precision and confidence. I'm pleased to report that Vince delivered a first quarter performance with net sales up 10.5% compared to the prior year, reflecting strength across both of our channels. Direct-to-consumer sales grew 15.6%, and wholesale increased 5.9%. Our direct-to-consumer segment continues to be a standout performer. From store remodels to enhanced e-commerce capabilities, from expanded marketing support to the launch of drop-shaped capabilities, we are creating more touch points and more compelling reasons for customers to engage with Fence. Q1 delivered outstanding performance in full-price customer acquisition, driving double-digit growth in both newly reactivated customers, Proof that our brand is resonating and our strategy is working. Our wholesale business is equally robust with after-register sales up low double digits with U.S. major accounts and relationships with key partners strengthening and benefiting from their broader resurgence in contemporary. Customers see real value in our product, appreciating the quality of the design and the effortless style of design since. In women's, our strongest category was woven tops, including solid blouses, prints, and new cotton woven programs. We also saw strength in pants for the expansion of our core pants fabrications and additional color options in novelty prints. Dresses gained momentum at the end of Q1, driven by knit dresses and elevated event dressing in printed silks. In men's, we continue to see significant growth across all channels, driven by novelty textured knits and polos. We're also seeing increases across all linen categories and sets. Head-to-toe dressing is elevated at our average transaction values, with expanded offerings driving higher bottom sales penetration. Our men's business remains a significant growth opportunity. We're on a clear path towards 30% penetration over time. We are leaning into high-potential areas, particularly in our direct-to-consumer channel. In e-commerce, our dropship business is expanding our reach without inventory risk. While still a small portion of the business, we recently launched handbags, belts, and accessories in Q2 in addition to shoes, adding another dimension to our offering. In our store business, we are continuing targeted remodels and strategically looking to reposition in existing markets and lifestyle centers where traffic and productivity trends are strongest. This summer, we will amplify store traffic through activations in key markets. Looking ahead, I'm more confident than I've ever been in this business, and we are pleased to be raising our full-year outlook. Look, over the last 12 months, we have fundamentally raised the bar for this, establishing a new baseline for growth. We're executing with discipline, our brand is resonating, and our customers are responding. This performance has extended into the second quarter, with sales trends running above the low double-digit quarter to date. As UG will discuss, we're balancing the strong performance of put-in planning. With half the quarter remaining and macroeconomic volatility persisting, for maintaining a disciplined approach to our Q2 and fiscal year outlook. In summary, we're operating from a position of tremendous strength, on pace to deliver strong growth for the year. We remain excited for the opportunities we continue to see to maximize Vince Hobson Corp. as a platform, and I want to thank the team for their continued hard work. I look forward to updating you on our continued progress. Now I'll turn it over to you, G, to walk through the financials in more detail.

Thank you, Brendan, and good morning, everyone. I'll walk you through our first quarter results and provide some additional color on our outlook for the second quarter and full year fiscal 2026. Total company net sales for the first quarter increased 10.5% to $64 million compared to $57.9 million in the first quarter of fiscal 2025. With respect to channel performance, our direct consumer segment grew 15.6%, driven by strong performances across both our e-commerce business and stores, and our wholesale segment increased 5.9% year-over-year. Gross profit in the first quarter was $32.4 million, or 50.6% of net sales. This compares to $29.2 million, or 50.3% of net sales in the first quarter of last year. The increase in gross margin rate was primarily driven by approximately 130 basis points due to favorable impact from higher pricing and 100 basis points due to favorable impact from lower discounting, largely offset by unfavorable impact of higher tariffs. Selling general and administrative expenses in the quarter were $35 million or 54.7% of net sales as compared to $33.6 million or 58% of net sales for the first quarter of last year. The increase in SG&A dollars was primarily driven by higher benefit costs as well as higher marketing and advertising costs. Loss from operations for the first quarter was $2.6 million compared to loss from operations of $4.4 million in the same period last year. This represents a $1.8 million improvement year over year, reflecting both top-line growth and operating leverage. Net interest expense for the quarter decreased to $0.6 million compared to $0.9 million in the prior year. The decrease was primarily due to lower levels of debt under the revolving credit facility. At the end of the first quarter of fiscal 2026, our long-term debt balance was $29.1 million. Income tax benefit was $0.4 million compared to zero income tax benefit in the same period last year. The benefit is due to the impact of applying company's estimated annual effective tax rate to the year-to-date owner pre-tax loss. Net loss for the first quarter was $2.1 million or loss per share of $0.16 compared to net loss of $4.8 million or loss per share of $0.37 for the first quarter of last year. Adjusted EBITDA was negative $1.1 million for the first quarter compared to negative $3 million in the prior year, representing an improvement on $1.9 million. Turning to the balance sheet, net inventory was $70.8 million at the end of first quarter as compared to $62.3 million at the end of first quarter last year. The year-over-year increase was primarily driven approximately 4.5 million higher inventory carrying value due to tariffs now turning to our outlook as Brendan discussed we are thrilled to see the momentum carry into the start of the second quarter and our outlook considers the strong growth we are driving as well as dynamic macro environment for the second quarter we expect net sales for the period to increase approximately 10 percent to 12 percent compared to the prior year period. We expect adjusting operating income as a percentage of net sales to be approximately 6.5 percent to 7 percent and adjusted EBDA's percentage of net sales to be approximately 8 percent to 8.5 percent. Given the momentum we have seen in the business and continue to expect to see, we are raising our full year outlook. For fiscal 2026, we now expect net sales to increase approximately seven percent to eight percent compared to fiscal 2025. We expect adjusted operating income as a percentage of net sales to be approximately four percent to four point five percent and adjusted EBDI as a percentage of net sales to be approximately five point five percent to six percent. Our outlook now contemplates the net impact of higher input costs and lower reciprocal tariff rates based on what we know today and while we received a portion of tariff refund given the uncertainty on timing and ultimate amount of any reimbursement we are not factoring currency funds into our guidance in summary with fees without utility performance and the trajectory of the business we're managing the external environment effectively and with our strong balance sheet with ample liquidity we are continuing to invest in initiatives that drive long-term growth and we're well positioned to execute against our plans With that, I'll turn it back to the operator to open the line for questions.

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question, and if you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. As a reminder, if you would like to ask a question, please press star one to raise your hand. Your first question comes from the line of Michael Kopinski from Noble Capital Markets.

Thank you, and first of all, congratulations on your quarter. I was just wondering, to what extent do you believe the current acceleration of revenue is being driven by, you know, favorable category trends versus company-specific execution, and how sustainable do you think that advantage is over the coming years?

Yeah, thanks, Michael. Well, you know, as I said in my remarks, I definitely think the contemporary segment is having a moment now with some tailwinds, but I feel even more confident that Vince is at the top of the list. I mean, we speak to our wholesale partners and we see where we rank. We see the increases we're getting. So I think a lot of it is our execution, the great product that continues to flow through. I mentioned that the consistency of the team that's now been together largely for seven years is a big factor, and they just keep evolving and elevating the product, and then the team behind it, you know, finds ways to expand it commercially. So I think it's a combination of both things, and as I said, we haven't seen any slowdown right now.

Gotcha. And then with your debt at $29 million, $31 million excess revolver availability, how do you think about balance sheet priorities as profitability improves here?

Well, you know, we have a revolver that we're very comfortable right now with the availability, and, you know, it's in better shape than it probably has been in a long time or maybe ever. And we still have a little bit of long-term debt that Sun Capital holds, of pick interest that, you know, we're in discussion to figure out how to handle, but it's less than $10 million at this point. So greatly reduced from where it was 16, 18 months ago. So, you know, we feel given the strength of the business and the balance sheet, you know, we're in a position to play some offense here and make some investments in business and, as I mentioned, also look for ways to use our platform to extend beyond Vince if the opportunity presents itself.

Gotcha. That's all I have for now. Thanks, Michael.

Your next question comes from the line of Eric Beter from SEC Research. Please go ahead.

Good morning.

Hey, Eric.

So can we get an update on SACS, where that stands, and how that fit into the guidance for the quarter of the year?

Yeah, well, you know, we're certainly in a much better place with SACS Global, which is Saks, Neumanns, and Bergdorf for us when we were a year ago. You know, we continue to manage it very closely with their senior management team. But we came into the year planning it very conservatively and planning it down from last year. I think we mentioned last year it was about 7% of our business. So, you know, certainly much smaller than our other wholesale accounts at this point. But we've been pleasantly surprised with the strength of the business there. And so we're seeing orders increase, and, you know, they've been good partners in terms of going through this bankruptcy process. I read what you read, that they're coming close to emerging. And, you know, a healthy SACS Global, even though it's slightly reduced in terms of footprint from what was a year and a half ago, is terrific for Vince and good for the industry. So that presents some upside for us as we look in the back half of the year and into 2027.

Right. When you look at, you know, renovations to stores, A, how many should we be thinking about this year, maybe next, and B, what kind of the financial impact from those kind of, I don't know, payback, or what kind of metrics do you see when you upgrade a store?

Yeah, well, you know, last year we did quite a few renovations at the beginning of the year, and in many cases it's to kind of retrofit the age stores that we don't really need cash wraps and big registers in the stores. So it opens up the stores. I know you've seen Greenwich and seen it firsthand and gotten great payback where we've done, did the renovations last year in Greenwich and Stamford, California, and Mercer Street, just to name a few. This year, over the summer, we have plans to upgrade Abikinney out in California in Scottsdale. But we're not going to close the stores. The stores are just doing too much business at this point to want to shut them down for a period like we did last year. So working with our team and the centers, you know, we found ways to be able to do it off hours where we can not lose the momentum we're building. So I think I'm curious to see how that goes and how we're able to execute as we think about renovations in 2027 and beyond, if we're able to do it with less disruption of the business, given the momentum that will further incentivize us to make those investments.

Okay. When you look at the dropship, I see you expanded it out. You know, help us out here. You know, how does those – how does the dropship help change kind of the ability for stores and for your ability to drive higher returns?

Yeah, well, I think, you know, it certainly is a tool for the stores, but it's more directly impacting e-commerce. And I think that anything we can do to expand the offering to the consumer beyond just, you know, what's traditionally been an apparel and shoe-based company provides the consumer more choice and more reason to spend time on the site or in the store. And, you know, I know it increases our units per transaction as they have further opportunities. So we continue to be thrilled with shoes, which was what we launched six months ago. Now we've added these other categories just recently, and we're tracking to where we hope to be, if not a little bit more, in terms of the annual projection. And, you know, it's a meaningful number in terms of just continuing to grow the business. And so we have our store manager conference next month, and that's one of the topics is how do we better utilize dropship that's online in our stores. and the stores are keen to do that. So we continue to get great support from Authentic Brands Group, our partners there, as they look to further expand categories. And I think it's pleasantly surprised us how accretive that's been, both as we said in things like Dropship, but also in brand awareness. And so they're looking to do or have signed up licenses in categories like home and kids and swim. And, you know, we're very active in terms of partnering with them to make sure it fits into the Vint aesthetics and design. And creative team is very involved. So it's been a really energizing and beneficial relationship for both sides.

And one last one, suiting. We saw that this summer you guys switched over some linen suiting. That went really well. So how should you be thinking about that in terms of expanding men's suiting in more stores this year after testing it last year?

Yeah, well, again, that's through Peerless, you know, one of the ABG licenses. I happen to have come business with them for 30 years at this point, so I know them quite well, and they're the leaders in the field. And I've been really impressed with how they've elevated their product from what I've dealt with them in the past. and the customers definitely reacting to it, as you mentioned, from last summer. And that's part of what we're thinking about is how do we better incorporate that into the stores. You know, the stores were not originally set up for all these additional categories, and as you know, floor space is precious. But that's where balancing the ability to drop ship with having some merchandise on site is kind of the next phase of figuring out the way to optimize this. and we're experimenting with things like alterations. So things that we didn't really have to think about before are nice opportunities that, you know, we're kind of in the process of experimenting and solving.

Great. Congratulations, and good luck for the rest of the year.

Thanks, Eric.

At this time, there are no further questions. I will now turn the call back to Brendan Hoffman, CEO, for closing remarks.

Great. Well, thank you, everyone, for your continued interest in Vince, and we look forward to updating you again in September for our Q2 earnings call. Thanks again.

This concludes today's call. Thank you all for attending. You may now disconnect.