Vince Holdings said on Tuesday sales dropped 7.6% to $59.2 million in the first quarter, as the U.S. fashion firm cut back promotional activity and its off-price business.

The New York-based company said the decline was driven by a 7.5% decrease in Vince brand sales due to the reduction in promotional activity in the direct-to-consumer channel and the pullback in the off-price business within the wholesale channel.

By channel, wholesale segment sales decreased 6.8% to $30.3 million, while direct-to-consumer segment sales decreased 8.2% to $28.9 million, compared to the first quarter of fiscal 2023.

Net income was $4.4 million or $0.35 per diluted share, compared to a net loss of $0.4 million or $(0.03) per share in the same period last year.

Following the previously announced winding down of its Rebecca Taylor business, completed in Q2 fiscal 2023, the company completed a nominal sale of all outstanding shares of Rebecca Taylor, which prior to the sale was in a net liability position, resulting in a gain of $7.6 million, in the first quarter of fiscal 2024.

“Our first quarter results reflect the strategic actions focused on driving improved full-price performance as we continued to reduce the promotional activity in our direct-to-consumer channel and pullback in our off-price business within our wholesale channel. As expected, these actions had a negative impact to our topline performance but helped to drive strong gross margin expansion despite incurring royalty expenses that we did not have in the prior year period,” said David Stefko, interim chief executive officer.

“In addition, we continued to execute our Transformation Plan, and we believe we are on track to better align our cost structure with our current operating model inclusive of royalty expenses. Through these actions and initiatives we are well positioned to deliver on our objectives for this year and beyond.”

The transformation program, following its majority stake sale to Authentic Brands Group, is expected to result in over $30 million in savings over the next three years, including approximately $10 million of savings in fiscal 2024.

Looking ahead, for the second quarter of fiscal 2024 the company expects total company net sales to be relatively flat to down low single digits compared to $69.4 million in the second quarter of fiscal 2023.

For full year fiscal 2024, the company continues to expect total company net sales to increase in the low-single-digit range compared to $292.9 million in fiscal 2023.