Good afternoon. My name is Chris, and I'll be your conference operator today. At this time, I would like to welcome everyone to Vince Q4 2018 Earnings Conference Call. [Operator Instructions] Amy Levy, Vice President, Investor Relations, you may begin the conference.

Thank you, and good afternoon, everyone. Welcome to Vince Holding Corp.'s Fourth Quarter and Annual Fiscal 2018 Earnings Conference Call. Hosting the call today are Brendan Hoffman, Chief Executive Officer; and Dave Stefko, 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 that 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. In addition, the company is presenting an estimated impact to earnings per share related to certain asset impairment charges as well as the tax receivables agreement adjustment. Certain components included in the calculation of such impact are non-GAAP measures. Discussions of these non-GAAP measures and reconciliations of them to their most comparable GAAP measures are included in today's press release and related schedules, which are available on the Investor section of the company's website at investors.vince.com. After the prepared remarks, management will be available to take your questions for as long as time permits. Now I'll turn the call over to Brendan.

Thank you, Amy, and good afternoon, everyone. 2018 marked a year of great progress for the Vince brand. We streamlined our wholesale business to focus on key partners where we achieved strong growth and market share gain. We opened 6 new stores and closed 2 stores as we optimized and expanded our store base; drove double-digit growth in our e-commerce sales in every quarter; and successfully launched the subscription program Vince UNFOLD. Importantly, our women's collections have met with a highly favorable response in every season of 2018 across both our direct-to-consumer and wholesale channels. We have worked diligently to rejuvenate and stabilize the Vince brand and built a strong foundation to support long-term profitable growth. With this solid platform in place, we have recently engaged a strategic consulting firm to help us develop a multiyear growth strategy, which I look forward to sharing in the coming quarters. That said, we will continue to execute a number of growth initiatives in 2019, which I will discuss following some highlights on our financial results. Looking back to our fourth quarter financial performance, we delivered on our expectations, which enabled us to achieve our annual guidance excluding impairment charges. We grew sales 4.2%. Fiscal 2017 included $1.6 million in incremental sales associated with the 14th week of Q4. Comparable store sales for the 13-week period grew 3.1%, driven by continued strength in our e-commerce business. Adjusted operating income was $3.6 million in the fourth quarter of fiscal 2018 as compared to adjusted operating loss of $1.5 million in the fourth quarter of fiscal 2017. For the year, sales grew 2.3%, including the extra week last year, and adjusted operating income grew $19 million and reached $5.8 million as compared to adjusted operating loss of $13.2 million in fiscal 2017. Similar to other…

Thank you, Brendan. We are pleased to have delivered solid fourth quarter performance, in line with our guidance for the year. Fourth quarter net sales increased 4.2% to $77.8 million, compared to $74.6 million in the same prior year period. The fourth quarter of fiscal 2017 included $1.6 million of incremental sales in our direct-to-consumer segment from an extra 14th week. Our wholesale channel sales were up 4.8% to $40.3 million due to lower sales allowances as compared to the same period last year, partially offset by an expected decline in shipments related to the exit of certain wholesale partners as well as lower off-price channel sales. Our direct-to-consumer segment sales increased 3.6% to $37.5 million in the fourth quarter, while comparable sales, including e-commerce, increased 3.1% on a 13-week basis, reflecting an increase in transactions, partially offset by a lower average unit retail related to product mix. Gross profit in the fourth quarter was $36.7 million or 47.1% of net sales. This compares to $34 million or 45.5% of net sales in the fourth quarter last year. The 160 basis point increase in gross margin rate was due to a favorable impact from year-over-year adjustments to inventory reserves, partially offset by higher upfront discounts in the off-price wholesale channel. Selling, general and administrative expenses in the quarter declined 14.4% to $34.7 million or 44.6% of net sales as compared to $40.5 million or 54.3% of net sales for the fourth quarter of last year. For each Q4 of 2018 and 2017, we recorded noncash asset impairment charges related to certain retail stores of $1.7 million and $5.1 million, respectively. Including these charges, operating income was $2 million for the fourth quarter of 2018 as compared to an operating loss of $6.6 million for the fourth quarter of fiscal 2017.…

[Operator Instructions] Your first question comes from Dana Telsey with Telsey Advisory Group.

Certainly, it's been quite a year at Vince with the progress that you've made on the product. And we've heard from everyone about the first quarter and February and March weakness that has been there. As you think about the product extensions in your existing products, Brendan, what are you most excited about as we head into the balance of this year, both men's and women's? And what are you seeing in wholesale and your own DTC, were there any exclusive products and pricing?

Yes, Dana. Thank you. I'll try to answer all of it, but cover me if I forgot something. Yes, I mean, certainly, we're excited to see other businesses built after a soft February. Really, the business had been strong at department store -- at registers at department stores through the quarter, and they got the goods earlier than we actually did in our own stores for Q1. So we knew the product was going to be well received, and that's certainly come true as the weather has gotten warmer. And I think in terms of product extensions, as we start to dabble in things like home and fragrances and handbags, the brand just lends itself so well to these different product categories, and the customer seems to be responding favorably and giving us permission to enter these categories. So as I mentioned in my remarks, we've retained a strategic consultant to really help us figure out how we'll amplify this and really develop these new product categories into revenue streams and figure out what we do in-house and out-of-house. So we're really very excited with the potential to diversify and really take advantage of the brand equity that we have. While at the same time, I think to answer the last part of your question, we're not losing focus on our core business, which is, of course, women's and men's apparel. And I think the LA team has done a tremendous job really embracing this buy now, wear now moment that the customer is in, and that was a big change and pivot from Vince. But we're really being able to see the customers come in and react to the product and have that immediate gratification across both men's and women's. And I think as we continue to get information and experience in that, it will only allow us to better service the customer. And certainly, opening up some of these new stores in new markets and also expand in current markets is very exciting to expand our reach as well.

And David, as you think about CapEx, how do you think about the buckets of CapEx this year and the allocation?

Most of our CapEx in 2018 and in 2019 also go against our stores, both new stores and then the refreshing of existing locations. And that's a large majority of our CapEx spend.

[Operator Instructions] And this does conclude the Q&A portion of the call. I'll now turn things back over to Brendan Hoffman for any closing remarks.

Thank you, everyone, for participating today, and we look forward to updating you on our Q1 results in June. Thanks very much.

This concludes today's conference call. You may now disconnect.