Vera Bradley, Inc. (Nasdaq: VRA) today announced its financial
results for the third quarter ended October 29, 2022.
In this release, Vera Bradley, Inc. or “the
Company” refers to the entire enterprise and includes both the Vera
Bradley and Pura Vida brands. Vera Bradley on a stand-alone basis
refers to the Vera Bradley brand.
Third Quarter Comments
Rob Wallstrom, outgoing Chief Executive Officer of
the Company, commented, “We are pleased with our year-over-year
improvement in third quarter non-GAAP EPS, largely driven by
implementation of our targeted expense reductions. Total Company
third quarter revenues of $124.0 million were modestly above
overall expectations, and we began to experience some stabilization
in our gross margin rate as supply chain challenges moderated and
strategic price increases helped offset increased raw material and
freight costs.
“As in past quarters, we are continuing to
experience bifurcation in the spending of our customer base. Vera
Bradley’s Direct Full-Price Channel customers with higher household
incomes remained more engaged and continued to spend more than
customers with lower household incomes, especially in our Vera
Bradley Factory Channel, where inflationary pressures impacted
traffic and discretionary spending. However, our Vera Bradley
Indirect Channel experienced its third consecutive quarter of
year-over-year growth.”
“We opened two additional Pura Vida Full-Price
retail stores in the quarter, and they are performing ahead of our
expectations,” Wallstrom continued. “As with many
direct-to-consumer companies, we have seen a shift from a
pure-digital-play model to an integrated multi-channel platform.
Our four Full-Price retail stores are not only profitable but have
driven improved ecommerce traffic and revenue in their trade areas.
However, overall Pura Vida revenues continued to be negatively
impacted by the shift in social and digital media effectiveness and
rising digital media costs, and we experienced a decline in sales
to wholesale accounts.”
Jackie Ardrey Named President and
CEO
Jackie Ardrey joined the Company as President and
CEO effective November 1, 2022, replacing retiring President and
CEO Wallstrom. Wallstrom will continue to work closely with Ardrey
through the end of December 2022 to ensure a smooth transition.
Ardrey also replaced Wallstrom on the Company’s Board of
Directors.
Ardrey is an accomplished, results-oriented leader
with over 25 years of experience in multi-channel retail
enterprises. Between 2018 and October 2022, she held the post of
President at home furnishings and seasonal décor catalog and online
retailer Grandin Road, part of the Qurate Retail Group. Previously,
Ardrey was CEO of Trading Company Holdings and Senior Vice
President of Merchandising and Supply Chain for iconic omnichannel
gourmet food and gifting brand Harry and David. Prior to that, she
spent 14 years at multi-channel high-end children’s retailer Hanna
Andersson in various roles of increasing responsibility, including
Senior Vice President of Merchandising, Design, and Wholesale.
“Although I have just been with the Company a few
short weeks, I am convinced that both our Vera Bradley and Pura
Vida brands have untapped potential in the marketplace,” Ardrey
commented. “While I expect the macro environment to remain
unpredictable, our teams are focused, and our cash position and
balance sheet remain solid. I look forward to working closely with
our leadership teams to develop and execute solid growth plans;
leverage our many opportunities, especially in merchandising and
marketing; and deliver consistent, sustainable growth and value to
our stakeholders over the long term.”
Summary of Financial Performance for the
Third Quarter
Consolidated net revenues totaled $124.0 million
compared to $134.7 million in the prior year third quarter ended
October 30, 2021.
For the current year third quarter, Vera Bradley,
Inc.’s consolidated net income totaled $5.2 million, or $0.17 per
diluted share. These results included $1.1 million of net after tax
charges, comprised of $0.6 million of consulting and professional
fees primarily associated with cost savings initiatives and the CEO
search, $0.4 million for the amortization of definite-lived
intangible assets, and $0.3 million of severance and stock-based
retirement compensation charges, partially offset by a benefit of
$0.2 million for the reversal of certain purchase order
cancellation fees. On a non-GAAP basis, Vera Bradley, Inc.’s
consolidated third quarter net income totaled $6.3 million, or
$0.20 per diluted share.
For the prior year third quarter, Vera Bradley,
Inc.’s consolidated net income totaled $5.8 million, or $0.17 per
diluted share. These results included $0.4 million of net after tax
charges related to intangible asset amortization. On a non-GAAP
basis, Vera Bradley, Inc.’s consolidated third quarter net income
totaled $6.2 million, or $0.18 per diluted share.
Summary of Financial Performance for the
Nine Months
Consolidated net revenues totaled $352.9 million
for the current year nine months ended October 29, 2022, compared
to $390.9 million in the prior year nine month period ended October
30, 2021.
For the current year nine months, Vera Bradley,
Inc.’s consolidated net loss totaled ($31.6) million, or ($1.00)
per diluted share. These results included $34.2 million of net
after tax charges, comprised of $18.2 million of Pura Vida goodwill
and intangible asset impairment charges, $5.0 million of severance
and stock-based retirement compensation retirement charges and
other employee costs, $4.7 million of inventory adjustments
associated with the exit of certain technology products and the
write-off of excess mask inventory, $3.0 million of consulting and
professional fees primarily associated with cost savings
initiatives and the CEO search, $1.3 million of intangible asset
amortization, $1.0 million of store and right-of-use asset
impairment charges, $0.7 million of purchase order cancellation
fees for spring 2023 goods, and $0.3 million of goodMRKT exit
costs. On a non-GAAP basis, Vera Bradley, Inc.’s consolidated net
income for the nine months totaled $2.6 million, or $0.08 per
diluted share.
For the prior year nine months, Vera Bradley,
Inc’s consolidated net income totaled $12.7 million, or $0.37 per
diluted share. These results included $1.3 million of net after tax
charges related to intangible asset amortization. On a non-GAAP
basis, Vera Bradley, Inc.’s consolidated net income totaled $14.0
million, or $0.41 per diluted share, for the nine months.
Non-GAAP Numbers
The current year non-GAAP third quarter income
statement numbers referenced below exclude the previously outlined
consulting and professional fees primarily associated with cost
savings initiatives and the CEO search, amortization of
definite-lived intangible assets, severance and stock-based
retirement compensation charges, and a benefit for the reversal of
certain purchase order cancellation fees. The current year non-GAAP
income statement numbers for the nine months referenced below
exclude the previously outlined goodwill and intangible asset
impairment charges, severance and stock-based retirement
compensation retirement charges and other employee costs, inventory
adjustments, consulting and professional fees, intangible asset
amortization, store and right-of-use asset impairment charges,
purchase order cancellation fees, and goodMRKT exit costs.
The prior year non-GAAP third quarter and
nine-month income statement numbers referenced below exclude the
previously outlined intangible asset amortization.
Third Quarter Details
Current year third quarter Vera Bradley Direct
segment revenues totaled $80.1 million, a 7.6% decrease from $86.6
million in the prior year third quarter. Comparable sales decreased
9.6% in the third quarter. The Company permanently closed 12
full-line stores and opened 5 factory outlet stores in the last
twelve months.
Vera Bradley Indirect segment revenues totaled
$22.3 million, a 6.7% increase over $20.9 million in the prior year
third quarter, reflecting an increase in certain key account
orders, partially offset by a decline in specialty account
orders.
Pura Vida segment revenues totaled $21.7 million,
a 20.3% decrease from $27.2 million in the prior year.
Third quarter consolidated gross profit totaled
$65.9 million, or 53.1% of net revenues, compared to $72.3 million,
or 53.6% of net revenues, in the prior year. On a non-GAAP basis,
current year gross profit totaled $65.6 million, or 52.9% of net
revenues. The current year gross profit rate was negatively
affected by higher inbound and outbound freight expense, deleverage
of overhead costs, and channel mix changes, partially offset by
price increases.
Third quarter consolidated SG&A expense
totaled $60.1 million, or 48.4% of net revenues, compared to $64.5
million, or 47.8% of net revenues, in the prior year. On a non-GAAP
basis, consolidated SG&A expense totaled $57.6 million, or
46.4% of net revenues for the current year third quarter, compared
to $63.7 million, or 47.3% of net revenues, in the prior year. As
expected, Vera Bradley’s SG&A current year expenses were lower
than the prior year primarily due to cost reduction initiatives and
a reduction in variable-related expenses due to the lower sales
volume.
The Company’s third quarter consolidated operating
income totaled $6.0 million, or 4.8% of net revenues, compared to
$8.0 million, or 5.9% of net revenues, in the prior year third
quarter. On a non-GAAP basis, the Company’s current year
consolidated operating income totaled $8.2 million, or 6.6% of net
revenues, compared to $8.7 million, or 6.5%, of net revenues, in
the prior year.
By segment:
- Vera Bradley Direct operating income was $17.1 million, or
21.3% of Direct net revenues, for the third quarter, compared to
$17.8 million, or 20.6% of Direct net revenues, in the prior year.
On a non-GAAP basis, current year Direct operating income totaled
$16.8 million, or 21.0% of Direct revenues.
- Vera Bradley Indirect operating income was $9.0 million, or
40.4% of Indirect net revenues, for the third quarter, compared to
$7.3 million, or 35.1% of Indirect net revenues, in the prior year.
On a non-GAAP basis, current year Indirect operating income totaled
$9.0 million, or 40.2% of Indirect net revenues.
- Pura Vida’s operating loss was ($1.4) million, or (6.2%) of
Pura Vida net revenues, in the current year, compared to operating
income of $1.8 million, or 6.6% of Pura Vida net revenues, in the
prior year. On a non-GAAP basis, Pura Vida’s operating loss was
($0.1) million, or (0.3%) of Pura Vida net revenues, compared to
operating income of $2.6 million, or 9.4% of Pura Vida net
revenues, in the prior year.
Details for the Nine Months
Vera Bradley Direct segment revenues for the
current year nine-month period totaled $228.7 million, an 8.7%
decrease from $250.5 million in the prior year. Comparable sales
declined 11.6% for the nine months.
Vera Bradley Indirect segment revenues for the
nine months totaled $56.6 million, a 6.8% increase over $53.0
million in the prior year, reflecting an increase in certain key
account orders, partially offset by a decline in specialty account
orders.
Pura Vida segment revenues for the nine months
totaled $67.5 million, a 22.7% decrease from $87.4 million in the
prior year.
Consolidated gross profit for the nine months
totaled $178.9 million, or 50.7% of net revenues, compared to
$211.8 million, or 54.2% of net revenues, in the prior year. On a
non-GAAP basis, current year gross profit totaled $185.9 million,
or 52.7% of net revenues. The current year gross profit rate was
negatively affected by higher inbound and outbound freight expense,
deleverage of overhead costs, and channel mix changes, partially
offset by price increases.
For the nine months, consolidated SG&A expense
totaled $195.0 million, or 55.3% of net revenues, compared to
$194.1 million, or 49.7% of net revenues, in the prior year. On a
non-GAAP basis, current year consolidated SG&A expense totaled
$181.0 million, or 51.3% of net revenues, compared to $191.8
million, or 49.1% of net revenues, in the prior year. As expected,
Vera Bradley’s non-GAAP SG&A current year expenses were lower
than the prior year primarily due to cost reduction initiatives and
a reduction in variable-related expenses due to the lower sales
volume.
For the nine months, the Company’s consolidated
operating loss totaled ($45.1) million, or (12.8%) of net revenues,
compared to consolidated operating income of $18.6 million, or 4.8%
of net revenues, in the prior year nine-month period. On a non-GAAP
basis, the Company’s current year consolidated operating income was
$5.3 million, or 1.5% or net revenues, compared to $20.9 million,
or 5.4% of net revenues, in the prior year.
By segment:
- Vera Bradley Direct operating income was $32.6 million, or
14.3% of net revenues, compared to $51.9 million, or 20.7% of
Direct net revenues, in the prior year. On a non-GAAP basis,
current year Direct operating income was $38.6 million, or 16.9% of
Direct net revenues.
- Vera Bradley Indirect operating income was $18.4 million, or
32.5% of Indirect net revenues, compared to $17.4 million, or 32.8%
of Indirect net revenues, in the prior year. On a non-GAAP basis,
current year Indirect operating income totaled $19.4 million, or
34.2% of Indirect net revenues.
- Pura Vida’s operating loss was ($28.8) million, or (42.7%) of
Pura Vida net revenues, for the current year, compared to operating
income of $7.5 million, or 8.6% of Pura Vida net revenues, in the
prior year. On a non-GAAP basis, Pura Vida’s operating income was
$4.3 million, or 6.4% of Pura Vida net revenues, for the current
year, compared to $9.8 million, or 11.3% of Pura Vida net revenues,
for the prior year.
Balance Sheet
Net capital spending for the third quarter and
nine months totaled $2.6 million and $7.0 million,
respectively.
Cash, cash equivalents, and investments as of
October 29, 2022 totaled $25.2 million compared to $75.3 million at
the end of last year’s third quarter. The Company had no borrowings
on its $75 million ABL credit facility at quarter end.
Total quarter-end inventory was $178.3 million,
compared to $148.3 million at the end of the third quarter last
year. Total current year inventory was higher than the prior year
primarily due to approximately $17 million in incremental logistics
costs burdening overall inventory as well as incremental Vera
Bradley Factory inventory related to lower than expected
revenues.
During the third quarter, the Company repurchased
approximately $0.8 million of its common stock (approximately 0.2
million shares at an average price of $3.56), bringing year-to-date
purchases through the end of the third quarter to approximately
$17.3 million (approximately 2.6 million shares at an average price
of $6.56). The Company has $28.5 million of remaining availability
under its $50.0 million repurchase authorization that expires in
December 2024.
Forward Outlook
Ardrey noted, "We expect the fourth quarter
macroeconomic environment to continue to be unpredictable; the Pura
Vida business will continue to be challenging; inflationary
pressures will continue to impact Vera Bradley customers with lower
household incomes, particularly in the Factory Channel; and there
will be continued pressure on gross margin.”
Excluding net revenues, all forward-looking
guidance numbers referenced below are non-GAAP. The prior year
SG&A and earnings per diluted share numbers exclude the
previously disclosed net charges related to intangible asset
amortization. Current year guidance excludes previously disclosed
goodwill and intangible asset impairment charges, severance and
stock-based retirement compensation retirement charges and other
employee costs, inventory adjustments, consulting and professional
fees, intangible asset amortization, store and right-of-use asset
impairment charges, purchase order cancellation fees, and goodMRKT
exit costs.
For the fourth quarter of Fiscal 2023, the
Company’s expectations are as follows:
- Consolidated net revenues of $136 to $141 million. Net revenues
totaled $149.6 million in the prior year fourth quarter.
- A consolidated gross profit percentage of 49.5% to 50.5%
compared to 50.9% in the prior year fourth quarter. The expected
decrease is primarily associated with incremental targeted
promotional activity and deleverage on overhead costs, partially
offset by price increases and lower year-over-year freight
expense.
- Consolidated SG&A expense of $61 to $63 million compared to
$67.1 million in the prior year fourth quarter. The reduction in
SG&A expense is being driven by cost reduction initiatives and
a reduction in compensation expense, marketing, and other
variable-related expenses due to the expected sales decline from
the prior year.
- Consolidated diluted EPS of $0.16 to $0.20 based on diluted
weighted-average shares outstanding of 31.1 million and an
effective tax rate of approximately 25%. Diluted EPS totaled $0.17
in last year’s fourth quarter.
For Fiscal 2023, the Company’s updated
expectations are as follows:
- Consolidated net revenues of $489 to $494 million. Net revenues
totaled $540.5 million in Fiscal 2022. Year-over-year Vera Bradley
revenues are expected to decline between 6% and 7%, and Pura Vida
revenues are expected to decline between 20% and 21%.
- A consolidated gross profit percentage of 51.9% to 52.1%
compared to 53.3% in Fiscal 2022. The expected year-over-year
decrease is primarily related to incremental inbound and outbound
freight expense, incremental targeted promotional activity, and
deleverage on overhead costs, partially offset by price
increases.
- Consolidated SG&A expense of $242 to $244 million compared
to $258.8 million in Fiscal 2022. The reduction in SG&A expense
is being driven by cost reduction initiatives and a reduction in
compensation expense, marketing, and other variable-related
expenses due to the expected sales decline from the prior
year.
- Consolidated operating income of $11.6 to $13.5 million
compared to $30.1 million in Fiscal 2022.
- Consolidated diluted EPS of $0.22 to $0.26 based on diluted
weighted-average shares outstanding of 31.6 million and an
effective tax rate of between 24.0 and 25.0%. Diluted EPS totaled
$0.57 last year.
- Net capital spending of approximately $10 million compared to
$5.5 million in the prior year, reflecting investments associated
with new Vera Bradley factory and Pura Vida store locations and
technology and logistics enhancements.
Disclosure Regarding Non-GAAP
Measures
The Company's management does not, nor does it
suggest that investors should, consider the supplemental non-GAAP
financial measures in isolation from, or as a substitute for,
financial information prepared in accordance with accounting
principles generally accepted in the United States (“GAAP”).
Further, the non-GAAP measures utilized by the Company may be
unique to the Company, as they may be different from non-GAAP
measures used by other companies.
The Company believes that the non-GAAP measures
presented in this earnings release, including cost of sales; gross
profit; selling, general, and administrative expenses; impairment
of goodwill and intangible assets; operating income (loss); net
income (loss); net (loss) income attributable and available to Vera
Bradley, Inc.; and diluted net income (loss) per share available to
Vera Bradley, Inc. common shareholders, along with the associated
percentages of net revenues, are helpful to investors because they
allow for a more direct comparison of the Company’s year-over-year
performance and are consistent with management’s evaluation of
business performance. A reconciliation of the non-GAAP measures to
the most directly comparable GAAP measures can be found in the
Company’s supplemental schedules included in this earnings
release.
Call Information
A conference call to discuss results for the third
quarter is scheduled for today, Wednesday, December 7, 2022, at
9:30 a.m. Eastern Time. A broadcast of the call will be available
via Vera Bradley’s Investor Relations section of its website,
www.verabradley.com. Alternatively, interested parties may dial
into the call at (800) 437-2398, and enter the access code 6836290.
A replay will be available shortly after the conclusion of the call
and remain available through December 21, 2022. To access the
recording, listeners should dial (844) 512-2921, and enter the
access code 6836290.
About Vera Bradley, Inc.
Vera Bradley, Inc. operates two unique lifestyle
brands – Vera Bradley and Pura Vida. Vera Bradley and Pura Vida are
complementary businesses, both with devoted, emotionally-connected,
and multi-generational female customer bases; alignment as casual,
comfortable, affordable, and fun brands; positioning as “gifting”
and socially-connected brands; strong, entrepreneurial cultures; a
keen focus on community, charity, and social consciousness;
multi-channel distribution strategies; and talented leadership
teams aligned and committed to the long-term success of their
brands.
Vera Bradley, based in Fort Wayne, Indiana, is a
leading designer of women’s handbags, luggage and other travel
items, fashion and home accessories, and unique gifts.
Founded in 1982 by friends Barbara Bradley Baekgaard and Patricia
R. Miller, the brand is known for its innovative designs, iconic
patterns, and brilliant colors that inspire and connect women
unlike any other brand in the global marketplace.
In July 2019, Vera Bradley, Inc. acquired a 75%
interest in Creative Genius, Inc., which also operates under the
name Pura Vida Bracelets (“Pura Vida”). Pura Vida, based in La
Jolla, California, is a digitally native, highly-engaging lifestyle
brand founded in 2010 by friends Paul Goodman and Griffin Thall.
Pura Vida has a differentiated and expanding offering of bracelets,
jewelry, and other lifestyle accessories.
The Company has three reportable segments: Vera
Bradley Direct (“VB Direct”), Vera Bradley Indirect (“VB
Indirect”), and Pura Vida. The VB Direct business consists of sales
of Vera Bradley products through Vera Bradley full-line and factory
outlet stores in the United States, verabradley.com,
verabradley.ca, Vera Bradley’s online outlet site, and the Vera
Bradley annual outlet sale in Fort Wayne, Indiana. The VB Indirect
business consists of sales of Vera Bradley products to
approximately 1,700 specialty retail locations throughout the
United States, as well as select department stores, national
accounts, third party e-commerce sites, and third-party inventory
liquidators, and royalties recognized through licensing agreements
related to the Vera Bradley brand. The Pura Vida segment consists
of sales of Pura Vida products through the Pura Vida websites,
www.puravidabracelets.com, www.puravidabracelets.eu, and
www.puravidabracelets.ca; through the distribution of its products
to wholesale retailers and department stores; and through its Pura
Vida retail stores.
Website Information
We routinely post important information for
investors on our website www.verabradley.com in the "Investor
Relations" section. We intend to use this webpage as a means of
disclosing material, non-public information and for complying with
our disclosure obligations under Regulation FD. Accordingly,
investors should monitor the Investor Relations section of our
website, in addition to following our press releases, SEC filings,
public conference calls, presentations and webcasts. The
information contained on, or that may be accessed through, our
webpage is not incorporated by reference into, and is not a part
of, this document.
Investors and other interested parties may also
access the Company’s most recent Corporate Responsibility and
Sustainability Report outlining its ESG (Environmental, Social, and
Governance) initiatives at
https://verabradley.com/pages/corporate-responsibility.
Vera Bradley Safe Harbor
Statement
Certain statements in this release are
"forward-looking statements" made pursuant to the safe-harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements reflect the Company's current
expectations or beliefs concerning future events and are subject to
various risks and uncertainties that may cause actual results to
differ materially from those that we expected, including: possible
adverse changes in general economic conditions and their impact on
consumer confidence and spending; possible inability to predict and
respond in a timely manner to changes in consumer demand; possible
loss of key management or design associates or inability to attract
and retain the talent required for our business; possible inability
to maintain and enhance our brands; possible inability to
successfully implement the Company’s long-term strategic plan;
possible inability to successfully open new stores, close targeted
stores, and/or operate current stores as planned; incremental
tariffs or adverse changes in the cost of raw materials and labor
used to manufacture our products; possible adverse effects
resulting from a significant disruption in our distribution
facilities; or business disruption caused by COVID-19 or other
pandemics. Risks, uncertainties, and assumptions also include the
possibility that Pura Vida acquisition benefits may not materialize
as expected and that Pura Vida’s business may not perform as
expected. More information on potential factors that could affect
the Company’s financial results is included from time to time in
the “Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” sections of the
Company’s public reports filed with the SEC, including the
Company’s Form 10-K for the fiscal year ended January 29, 2022. We
undertake no obligation to publicly update or revise any
forward-looking statement. Financial schedules are attached to this
release.
CONTACTS: Investors: Julia Bentley, VP of Investor
Relations and Communications jbentley@verabradley.com (260)
207-5116
Media:
mediacontact@verabradley.com 877-708-VERA (8372)
|
Vera Bradley, Inc. |
|
Condensed Consolidated Balance Sheets |
|
(in thousands) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
October 29,2022 |
|
January 29,2022 |
|
October 30,2021 |
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
25,237 |
|
|
$ |
88,436 |
|
|
$ |
74,784 |
|
|
Short-term investments |
|
- |
|
|
|
- |
|
|
|
476 |
|
|
Accounts receivable, net |
|
25,115 |
|
|
|
20,681 |
|
|
|
29,993 |
|
|
Inventories |
|
178,334 |
|
|
|
144,881 |
|
|
|
148,265 |
|
|
Income taxes receivable |
|
4,120 |
|
|
|
9,391 |
|
|
|
8,996 |
|
|
Prepaid expenses and other current assets |
|
14,817 |
|
|
|
15,928 |
|
|
|
14,801 |
|
|
Total current assets |
|
247,623 |
|
|
|
279,317 |
|
|
|
277,315 |
|
|
|
|
|
|
|
|
|
Operating right-of-use assets |
|
82,683 |
|
|
|
79,873 |
|
|
|
82,980 |
|
|
Property, plant, and equipment, net |
|
60,388 |
|
|
|
59,941 |
|
|
|
61,792 |
|
|
Intangible assets, net |
|
32,001 |
|
|
|
44,223 |
|
|
|
44,991 |
|
|
Goodwill |
|
24,833 |
|
|
|
44,254 |
|
|
|
44,254 |
|
|
Deferred income taxes |
|
9,381 |
|
|
|
3,857 |
|
|
|
3,450 |
|
|
Other assets |
|
4,428 |
|
|
|
6,081 |
|
|
|
5,960 |
|
|
Total assets |
$ |
461,337 |
|
|
$ |
517,546 |
|
|
$ |
520,742 |
|
|
|
|
|
|
|
|
|
Liabilities, Redeemable Noncontrolling Interest, and
Shareholders' Equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
$ |
31,125 |
|
|
$ |
30,492 |
|
|
$ |
32,686 |
|
|
Accrued employment costs |
|
12,252 |
|
|
|
12,463 |
|
|
|
10,819 |
|
|
Short-term operating lease liabilities |
|
19,742 |
|
|
|
18,699 |
|
|
|
19,945 |
|
|
Other accrued liabilities |
|
14,771 |
|
|
|
16,422 |
|
|
|
15,088 |
|
|
Income taxes payable |
|
501 |
|
|
|
- |
|
|
|
- |
|
|
Total current liabilities |
|
78,391 |
|
|
|
78,076 |
|
|
|
78,538 |
|
|
|
|
|
|
|
|
|
Long-term operating lease liabilities |
|
80,109 |
|
|
|
80,861 |
|
|
|
83,917 |
|
|
Other long-term liabilities |
|
85 |
|
|
|
195 |
|
|
|
138 |
|
|
Total liabilities |
|
158,585 |
|
|
|
159,132 |
|
|
|
162,593 |
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interest |
|
23,153 |
|
|
|
30,974 |
|
|
|
30,701 |
|
|
Shareholders' equity: |
|
|
|
|
|
|
Additional paid-in-capital |
|
109,070 |
|
|
|
107,907 |
|
|
|
107,427 |
|
|
Retained earnings |
|
302,790 |
|
|
|
334,364 |
|
|
|
329,209 |
|
|
Accumulated other comprehensive loss |
|
(181 |
) |
|
|
(29 |
) |
|
|
(10 |
) |
|
Treasury stock |
|
(132,080 |
) |
|
|
(114,802 |
) |
|
|
(109,178 |
) |
|
Total shareholders' equity of Vera Bradley, Inc. |
|
279,599 |
|
|
|
327,440 |
|
|
|
327,448 |
|
|
Total liabilities, redeemable noncontrolling interest, and
shareholders' equity |
$ |
461,337 |
|
|
$ |
517,546 |
|
|
$ |
520,742 |
|
|
|
|
|
|
|
|
|
Vera Bradley, Inc. |
|
Condensed Consolidated Statements of
Operations |
|
(in thousands, except per share amounts) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
Thirty-Nine Weeks Ended |
|
|
October 29,2022 |
|
October 30,2021 |
|
October 29,2022 |
|
October 30,2021 |
|
|
|
|
|
|
|
|
|
|
Net revenues |
$ |
124,040 |
|
|
$ |
134,735 |
|
|
$ |
352,870 |
|
|
$ |
390,877 |
|
|
Cost of sales |
|
58,164 |
|
|
|
62,457 |
|
|
|
173,963 |
|
|
|
179,074 |
|
|
Gross profit |
|
65,876 |
|
|
|
72,278 |
|
|
|
178,907 |
|
|
|
211,803 |
|
|
Selling, general, and administrative expenses |
|
60,059 |
|
|
|
64,458 |
|
|
|
195,015 |
|
|
|
194,083 |
|
|
Impairment of goodwill and intangible assets |
|
- |
|
|
|
- |
|
|
|
29,338 |
|
|
|
- |
|
|
Other income, net |
|
141 |
|
|
|
132 |
|
|
|
350 |
|
|
|
921 |
|
|
Operating income (loss) |
|
5,958 |
|
|
|
7,952 |
|
|
|
(45,096 |
) |
|
|
18,641 |
|
|
Interest expense, net |
|
39 |
|
|
|
13 |
|
|
|
115 |
|
|
|
222 |
|
|
Income (loss) before income taxes |
|
5,919 |
|
|
|
7,939 |
|
|
|
(45,211 |
) |
|
|
18,419 |
|
|
Income tax expense (benefit) |
|
1,090 |
|
|
|
1,713 |
|
|
|
(6,429 |
) |
|
|
3,854 |
|
|
Net income (loss) |
|
4,829 |
|
|
|
6,226 |
|
|
|
(38,782 |
) |
|
|
14,565 |
|
|
Less: Net (loss) income attributable to redeemable noncontrolling
interest |
|
(338 |
) |
|
|
448 |
|
|
|
(7,208 |
) |
|
|
1,882 |
|
|
Net income (loss) attributable to Vera Bradley, Inc. |
$ |
5,167 |
|
|
$ |
5,778 |
|
|
$ |
(31,574 |
) |
|
$ |
12,683 |
|
|
|
|
|
|
|
|
|
|
|
Basic weighted-average shares outstanding |
|
31,061 |
|
|
|
33,964 |
|
|
|
31,721 |
|
|
|
33,852 |
|
|
Diluted weighted-average shares outstanding |
|
31,229 |
|
|
|
34,472 |
|
|
|
31,721 |
|
|
|
34,492 |
|
| |
|
|
|
|
|
|
|
|
Basic net income (loss) per share available to Vera Bradley, Inc.
common shareholders |
$ |
0.17 |
|
|
$ |
0.17 |
|
|
$ |
(1.00 |
) |
|
$ |
0.37 |
|
|
Diluted net income (loss) per share available to Vera Bradley, Inc.
common shareholders |
$ |
0.17 |
|
|
$ |
0.17 |
|
|
$ |
(1.00 |
) |
|
$ |
0.37 |
|
| |
|
|
|
|
|
|
|
|
Vera Bradley, Inc. |
|
Condensed Consolidated Statements of Cash
Flows |
|
(in thousands) |
|
(unaudited) |
| |
|
|
|
| |
|
|
|
| |
Thirty-Nine Weeks Ended |
| |
October 29, 2022 |
|
October 30, 2021 |
| Cash flows from
operating activities |
|
|
|
|
Net (loss) income |
$ |
(38,782 |
) |
|
$ |
14,565 |
|
| Adjustments to reconcile net
(loss) income to net cash (used in) provided by operating
activities: |
|
|
|
|
Depreciation of property, plant, and equipment |
|
6,685 |
|
|
|
6,769 |
|
|
Amortization of operating right-of-use assets |
|
16,151 |
|
|
|
15,028 |
|
|
Goodwill and intangible asset impairment |
|
29,338 |
|
|
|
- |
|
|
Other impairment charges |
|
1,351 |
|
|
|
- |
|
|
Amortization of intangible assets |
|
2,305 |
|
|
|
2,305 |
|
|
Provision for doubtful accounts |
|
(80 |
) |
|
|
108 |
|
|
Stock-based compensation |
|
2,593 |
|
|
|
4,419 |
|
|
Deferred income taxes |
|
(5,524 |
) |
|
|
80 |
|
|
Other non-cash gain, net |
|
- |
|
|
|
(45 |
) |
|
Changes in assets and liabilities: |
|
|
|
|
Accounts receivable |
|
(4,354 |
) |
|
|
(2,558 |
) |
|
Inventories |
|
(33,453 |
) |
|
|
(6,849 |
) |
|
Prepaid expenses and other assets |
|
2,764 |
|
|
|
3,463 |
|
|
Accounts payable |
|
49 |
|
|
|
4,798 |
|
|
Income taxes |
|
5,772 |
|
|
|
(1,945 |
) |
|
Operating lease liabilities, net |
|
(19,262 |
) |
|
|
(19,273 |
) |
|
Accrued and other liabilities |
|
(2,311 |
) |
|
|
(1,654 |
) |
| Net cash (used in) provided by
operating activities |
|
(36,758 |
) |
|
|
19,211 |
|
| |
|
|
|
| Cash flows from
investing activities |
|
|
|
|
Purchases of property, plant, and equipment |
|
(6,968 |
) |
|
|
(4,033 |
) |
|
Proceeds from maturities and sales of investments |
|
- |
|
|
|
815 |
|
|
Proceeds from disposal of property, plant, and equipment |
|
- |
|
|
|
45 |
|
| Net cash used in investing
activities |
|
(6,968 |
) |
|
|
(3,173 |
) |
| |
|
|
|
| Cash flows from
financing activities |
|
|
|
|
Tax withholdings for equity compensation |
|
(1,430 |
) |
|
|
(2,425 |
) |
|
Repurchase of common stock |
|
(17,278 |
) |
|
|
(2,000 |
) |
|
Distributions to redeemable noncontrolling interest |
|
(613 |
) |
|
|
(990 |
) |
| Net cash used in financing
activities |
|
(19,321 |
) |
|
|
(5,415 |
) |
| Effect of exchange rate
changes on cash and cash equivalents |
|
(152 |
) |
|
|
(14 |
) |
| |
|
|
|
| Net (decrease) increase in
cash and cash equivalents |
$ |
(63,199 |
) |
|
$ |
10,609 |
|
| Cash and cash equivalents,
beginning of period |
|
88,436 |
|
|
|
64,175 |
|
| Cash and cash equivalents, end
of period |
$ |
25,237 |
|
|
$ |
74,784 |
|
| |
|
|
|
|
|
|
|
|
Vera Bradley, Inc. |
|
Third Quarter Fiscal 2023 |
|
GAAP to Non-GAAP Reconciliation Thirteen Weeks Ended
October 29, 2022 |
|
(in thousands, except per share amounts) |
|
(unaudited) |
|
|
Thirteen Weeks Ended |
| |
As Reported |
|
Other Items |
|
Non-GAAP(Excluding Items) |
|
Gross profit |
$ |
65,876 |
|
|
$ |
276 |
|
1 |
$ |
65,600 |
|
|
Selling, general, and administrative expenses |
|
60,059 |
|
|
|
2,470 |
|
2 |
|
57,589 |
|
|
Impairment of goodwill and intangible assets |
|
- |
|
|
|
- |
|
|
|
- |
|
|
Operating income (loss) |
|
5,958 |
|
|
|
(2,194 |
) |
|
|
8,152 |
|
|
Income (loss) before income taxes |
|
5,919 |
|
|
|
(2,194 |
) |
|
|
8,113 |
|
|
Income tax expense (benefit) |
|
1,090 |
|
|
|
(763 |
) |
3 |
|
1,853 |
|
|
Net income (loss) |
|
4,829 |
|
|
|
(1,431 |
) |
|
|
6,260 |
|
|
Less: Net loss attributable to redeemable noncontrolling
interest |
|
(338 |
) |
|
|
(322 |
) |
|
|
(16 |
) |
|
Net income (loss) attributable to Vera Bradley, Inc. |
|
5,167 |
|
|
|
(1,109 |
) |
|
|
6,276 |
|
|
Diluted net income (loss) per share available to Vera Bradley, Inc.
common shareholders |
$ |
0.17 |
|
|
$ |
(0.04 |
) |
|
$ |
0.20 |
|
|
|
|
|
|
|
|
|
Vera Bradley Direct segment operating income |
$ |
17,060 |
|
|
$ |
225 |
|
4 |
$ |
16,835 |
|
|
Vera Bradley Indirect segment operating income |
$ |
9,012 |
|
|
$ |
51 |
|
4 |
$ |
8,961 |
|
|
Pura Vida segment operating loss |
$ |
(1,353 |
) |
|
$ |
(1,289 |
) |
5 |
$ |
(64 |
) |
|
Unallocated corporate expenses |
$ |
(18,761 |
) |
|
$ |
(1,181 |
) |
6 |
$ |
(17,580 |
) |
|
|
|
|
|
|
|
|
1Related to the reversal of certain PO cancellation fees |
|
2Items include $1,133 for consulting fees associated with cost
savings initiatives and CEO search, as well as certain Pura Vida
professional fees; $768 for the amortization of definite-lived
intangible assets; $406 for severance charges; and $163 for CEO
stock-based compensation associated with retirement |
|
3Related to the tax impact of the charges mentioned above |
|
4Related to an allocation for reversals of certain PO cancellation
fees |
|
5Related to $768 for the amortization of definite-lived intangible
assets; and $406 for severance charges; and $115 for certain
professional fees |
|
6Related to $1,018 for consulting fees associated with cost savings
initiatives and CEO search and $163 for CEO stock-based
compensation associated with retirement |
|
|
|
Vera Bradley, Inc. |
|
Third Quarter Fiscal 2022 |
|
GAAP to Non-GAAP Reconciliation Thirteen Weeks Ended
October 30, 2021 |
|
(in thousands, except per share amounts) |
|
(unaudited) |
|
|
Thirteen Weeks Ended |
| |
As Reported |
|
Other Items |
|
Non-GAAP(Excluding Items) |
|
Gross profit |
$ |
72,278 |
|
|
$ |
- |
|
|
$ |
72,278 |
|
|
Selling, general, and administrative expenses |
|
64,458 |
|
|
|
768 |
|
1 |
|
63,690 |
|
|
Operating income (loss) |
|
7,952 |
|
|
|
(768 |
) |
|
|
8,720 |
|
|
Income (loss) before income taxes |
|
7,939 |
|
|
|
(768 |
) |
|
|
8,707 |
|
|
Income tax expense (benefit) |
|
1,713 |
|
|
|
(134 |
) |
2 |
|
1,847 |
|
|
Net income (loss) |
|
6,226 |
|
|
|
(634 |
) |
|
|
6,860 |
|
|
Less: Net income (loss) attributable to redeemable noncontrolling
interest |
|
448 |
|
|
|
(192 |
) |
|
|
640 |
|
|
Net income (loss) attributable to Vera Bradley, Inc. |
|
5,778 |
|
|
|
(442 |
) |
|
|
6,220 |
|
|
Diluted net income (loss) per share available to Vera Bradley, Inc.
common shareholders |
$ |
0.17 |
|
|
$ |
(0.01 |
) |
|
$ |
0.18 |
|
|
|
|
|
|
|
|
|
Vera Bradley Direct segment operating income |
$ |
17,825 |
|
|
$ |
- |
|
|
$ |
17,825 |
|
|
Vera Bradley Indirect segment operating income |
$ |
7,341 |
|
|
$ |
- |
|
|
$ |
7,341 |
|
|
Pura Vida segment operating income (loss) |
$ |
1,794 |
|
|
$ |
(768 |
) |
1 |
$ |
2,562 |
|
|
Unallocated corporate expenses |
$ |
(19,008 |
) |
|
$ |
- |
|
|
$ |
(19,008 |
) |
|
|
|
|
|
|
|
|
1Includes the amortization of definite-lived intangible assets |
|
2Related to the tax impact of the charges mentioned above |
|
|
|
Vera Bradley, Inc. |
|
GAAP to Non-GAAP Reconciliation Thirty-Nine Weeks Ended
October 29, 2022 |
|
(in thousands, except per share amounts) |
|
(unaudited) |
|
|
Thirty-Nine Weeks Ended |
| |
As Reported |
|
Other Items |
|
Non-GAAP(Excluding Items) |
|
Gross profit (loss) |
$ |
178,907 |
|
|
$ |
(7,000 |
) |
1 |
$ |
185,907 |
|
|
Selling, general, and administrative expenses |
|
195,015 |
|
|
|
14,057 |
|
2 |
|
180,958 |
|
|
Impairment of goodwill and intangible assets |
|
29,338 |
|
|
|
29,338 |
|
|
|
- |
|
|
Operating (loss) income |
|
(45,096 |
) |
|
|
(50,395 |
) |
|
|
5,299 |
|
|
(Loss) income before income taxes |
|
(45,211 |
) |
|
|
(50,395 |
) |
|
|
5,184 |
|
|
Income tax (benefit) expense |
|
(6,429 |
) |
|
|
(7,898 |
) |
3 |
|
1,469 |
|
|
Net (loss) income |
|
(38,782 |
) |
|
|
(42,497 |
) |
|
|
3,715 |
|
|
Less: Net (loss) income attributable to redeemable noncontrolling
interest |
|
(7,208 |
) |
|
|
(8,285 |
) |
|
|
1,077 |
|
|
Net (loss) income attributable to Vera Bradley, Inc. |
|
(31,574 |
) |
|
|
(34,212 |
) |
|
|
2,638 |
|
|
Diluted net (loss) income per share available to Vera Bradley, Inc.
common shareholders |
$ |
(1.00 |
) |
|
$ |
(1.08 |
) |
|
$ |
0.08 |
|
|
|
|
|
|
|
|
|
Vera Bradley Direct segment operating income (loss) |
$ |
32,607 |
|
|
$ |
(5,948 |
) |
4 |
$ |
38,555 |
|
|
Vera Bradley Indirect segment operating income (loss) |
$ |
18,409 |
|
|
$ |
(943 |
) |
5 |
$ |
19,352 |
|
|
Pura Vida segment operating (loss) income |
$ |
(28,831 |
) |
|
$ |
(33,143 |
) |
6 |
$ |
4,312 |
|
|
Unallocated corporate expenses |
$ |
(67,281 |
) |
|
$ |
(10,361 |
) |
7 |
$ |
(56,920 |
) |
|
|
|
|
|
|
|
|
1Items include $6,142 for inventory adjustments associated with the
exit of certain technology products and the goodMRKT brand, as well
as excess mask products and $858 for PO cancellation fees |
|
2Items include $6,120 for severance charges; $4,038 for consulting
fees associated with cost savings initiatives, CEO search, and
certain Pura Vida professional fees; $2,305 for the amortization of
definite-lived intangible assets; $1,351 for store and right-of-use
asset impairment charges; $163 for CEO stock-based compensation
associated with retirement; and $80 for goodMRKT brand exit
costs |
|
3Related to the tax impact of the charges mentioned above, as well
as goodwill and intangible asset impairment charges |
|
4Related to $4,872 related to an allocation for certain inventory
adjustments and PO cancellation fees; $759 for store impairment
charges; $302 for goodMRKT brand exit costs; and $15 for severance
charges |
|
5Related to an allocation for certain inventory adjustments and PO
cancellation fees |
|
6Related to $29,338 of goodwill and intangible asset impairment
charges; $2,305 for the amortization of definite-lived intangible
assets; $963 for inventory adjustments associated with mask
products; $422 for severance charges; and $115 for certain
professional fees |
|
7Related to $5,683 for severance charges; $3,923 for consulting
fees associated with cost savings initiatives and CEO search; $592
for a right-of-use asset impairment charge; and $163 for CEO
stock-based compensation associated with retirement |
|
|
|
Vera Bradley, Inc. |
|
GAAP to Non-GAAP Reconciliation Thirty-Nine Weeks Ended
October 30, 2021 |
|
(in thousands, except per share amounts) |
|
(unaudited) |
|
|
Thirty-Nine Weeks Ended |
| |
As Reported |
|
Other Items |
|
Non-GAAP(Excluding Items) |
|
Gross profit |
$ |
211,803 |
|
|
$ |
- |
|
|
$ |
211,803 |
|
|
Selling, general, and administrative expenses |
|
194,083 |
|
|
|
2,305 |
|
1 |
|
191,778 |
|
|
Operating income (loss) |
|
18,641 |
|
|
|
(2,305 |
) |
|
|
20,946 |
|
|
Income (loss) before income taxes |
|
18,419 |
|
|
|
(2,305 |
) |
|
|
20,724 |
|
|
Income tax expense (benefit) |
|
3,854 |
|
|
|
(427 |
) |
2 |
|
4,281 |
|
|
Net income (loss) |
|
14,565 |
|
|
|
(1,878 |
) |
|
|
16,443 |
|
|
Less: Net income (loss) attributable to redeemable noncontrolling
interest |
|
1,882 |
|
|
|
(576 |
) |
|
|
2,458 |
|
|
Net income (loss) attributable to Vera Bradley, Inc. |
|
12,683 |
|
|
|
(1,302 |
) |
|
|
13,985 |
|
|
Diluted net income (loss) per share available to Vera Bradley, Inc.
common shareholders |
$ |
0.37 |
|
|
$ |
(0.04 |
) |
|
$ |
0.41 |
|
|
|
|
|
|
|
|
|
Vera Bradley Direct segment operating income |
$ |
51,853 |
|
|
$ |
- |
|
|
$ |
51,853 |
|
|
Vera Bradley Indirect segment operating income |
$ |
17,403 |
|
|
$ |
- |
|
|
$ |
17,403 |
|
|
Pura Vida segment operating income (loss) |
$ |
7,528 |
|
|
$ |
(2,305 |
) |
1 |
$ |
9,833 |
|
|
Unallocated corporate expenses |
$ |
(58,143 |
) |
|
$ |
- |
|
|
$ |
(58,143 |
) |
|
|
|
|
|
|
|
|
1Includes the amortization of definite-lived intangible assets |
|
2Related to the tax impact of the charges mentioned above |
Vera Bradley (NASDAQ:VRA)
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Vera Bradley (NASDAQ:VRA)
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