Vera Bradley, Inc. (Nasdaq: VRA) today announced its financial
results for the second quarter ended July 30, 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.
Second Quarter Comments
Rob Wallstrom, Chief Executive Officer of the Company,
commented, “While total Company second quarter revenues of $130.4
million were modestly below our expectations and we continued to
experience gross margin pressure due to logistics costs, we drove
product innovation at both Vera Bradley and Pura Vida, initiated
meaningful cost reduction actions, and completed $6.0 million of
share repurchases, while maintaining a solid, debt-free balance
sheet.
“We are continuing to see bifurcation in the spending of our
customer base. At Vera Bradley, Direct Full-Price Channel
comparable revenues were nearly flat to last year and up double
digits to fiscal 2020 as customers with higher household incomes
remained engaged and continued to spend. However, inflationary
pressures, especially higher gas prices, continued to negatively
affect the purchases of customers with lower household incomes as
well as traffic and spending in our Vera Bradley factory stores.
Our Vera Bradley Indirect Channel continued to experience a healthy
year-over-year rebound. Pura Vida’s ecommerce revenues continued to
be affected by the shift in social and digital media effectiveness
and escalating digital media costs.
“We are taking decisive actions to strengthen our core brands
and the overall enterprise,” Wallstrom added. “We have begun
implementation of annualized targeted cost reductions of $25
million, which are expected to be fully realized next fiscal year.
These cost reductions will help offset inflationary expense
pressures and the recessionary spending behavior from lower-income
households. Expense savings are being derived across various areas
of the Company, including retail store efficiencies, marketing
expenses, information technology contracts, professional services,
logistics and operational costs, and corporate payroll. In
addition, we are continuing to evaluate and execute strategic price
increases for both brands to offset rising raw material and freight
costs.
“At the Vera Bradley brand, we remain confident in our core
strategy, by continuing to innovate and build on our lifestyle
merchandising focus. We will continue to optimize the travel
category, which is nearly back to pre-pandemic levels; maximize
back-to-campus opportunities, with strategic assortment
enhancements; continue with powerful product collaborations like
Disney and Harry Potter; and add excitement by expanding our
footwear and home assortments this fall.”
Wallstrom continued, “At Pura Vida, we are focused on
stabilizing the business and returning the brand to long-term
growth. Our number one priority is to build a more diverse,
innovative, effective, and performance-based marketing program to
drive ecommerce sales. Prudent store growth can play a key role in
driving new customer acquisition as we continue to diversify our
marketing platforms, and stores demonstrate the power a retail
presence can have on driving digital sales, omni-channel loyalty,
and spending. We opened one new Pura Vida store location in the
quarter, which is exceeding expectations.
“On the product front, we continue to build customer excitement
and engagement through collaborations like Disney, Harry Potter,
Hello Kitty, and the World Surf League; partnering with key
influencers; offering themed-collections centered around key events
like Shark Week; and the launch of our new demi-fine
collection.”
Wallstrom further noted, “We are planning for the macro
environment to remain challenging for the balance of the year and
into next year. And, despite the strength in Pura Vida’s store
business and opportunity for new store openings, we expect it to
take time to return Pura Vida’s ecommerce business to growth as
rebuilding and transforming the marketing program is underway. We
are taking critical actions that will further strengthen both core
brands and our company as a whole, not only to successfully manage
through this period but position us for the future. Our teams are
focused, and our cash position and balance sheet remain solid. We
have successfully managed through difficult business cycles before,
and I am confident we will manage through this period as well. We
look forward to returning both brands to steady growth.”
Summary of Financial Performance for the Second
Quarter
Consolidated net revenues totaled $130.4 million compared to
$147.0 million in the prior year second quarter ended July 31,
2021.
For the current year second quarter, Vera Bradley, Inc.’s
consolidated net loss totaled ($29.8) million, or ($0.95) per
diluted share. These results included $32.2 million of net after
tax charges, comprised of $18.2 million of Pura Vida goodwill and
intangible asset impairment charges, $4.7 million of inventory
adjustments associated with the exit of certain technology products
and the write-off of excess mask inventory, $4.7 million of
severance charges and other employee costs, $2.3 million of
consulting fees associated with cost savings initiatives and the
CEO search, $0.9 million of purchase order cancellation fees for
spring 2023 goods, $0.6 million of store impairment charges, $0.5
million of intangible asset amortization, and $0.3 million of
goodMRKT exit costs. On a non-GAAP basis, Vera Bradley, Inc.’s
consolidated second quarter net income totaled $2.4 million, or
$0.08 per diluted share.
For the prior year second quarter, Vera Bradley, Inc.’s
consolidated net income totaled $9.1 million, or $0.26 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 second quarter net income totaled $9.5
million, or $0.28 per diluted share.
Summary of Financial Performance for the Six
Months
Consolidated net revenues totaled $228.8 million for the current
year six months ended July 30, 2022, compared to $256.1 million in
the prior year six month period ended July 31, 2021.
For the current year six months, Vera Bradley, Inc.’s
consolidated net loss totaled ($36.7) million, or ($1.15) per
diluted share. These results included $33.1 million of net after
tax charges, comprised of $18.2 million of Pura Vida goodwill and
intangible asset impairment charges, $4.7 million of inventory
adjustments associated with the exit of certain technology products
and the write-off of excess mask inventory, $4.7 million of
severance charges and other employee costs, $2.4 million of
consulting fees associated with cost savings initiatives and the
CEO search, $1.0 million of store and right-of-use asset impairment
charges, $0.9 million of purchase order cancellation fees for
spring 2023 goods, $0.9 million of intangible asset amortization,
and $0.3 million of goodMRKT exit costs. On a non-GAAP basis, Vera
Bradley, Inc.’s consolidated net loss for the six months totaled
($3.6) million, or ($0.11) per diluted share.
For the prior year six months, Vera Bradley, Inc’s consolidated
net income totaled $6.9 million, or $0.20 per diluted share. These
results included $0.9 million of net after tax charges related to
intangible asset amortization. On a non-GAAP basis, excluding these
charges, Vera Bradley, Inc.’s consolidated net income for the prior
year totaled $7.8 million, or $0.23 per diluted share, for the six
months.
Non-GAAP Numbers
The current year non-GAAP second quarter and six-month income
statement numbers referenced below exclude the previously outlined
goodwill and intangible asset impairment charges, inventory
adjustments, severance charges and other employee costs, consulting
fees, store and right-of-use asset impairment charges, purchase
order cancellation fees, intangible asset amortization, and
goodMRKT exit costs. The prior year non-GAAP second quarter and
six-month income statement numbers referenced below exclude the
previously outlined intangible asset amortization.
Second Quarter Details
Current year second quarter Vera Bradley Direct segment revenues
totaled $87.0 million, a 10.4% decrease from $97.1 million in the
prior year second quarter. Comparable sales declined 13.8% in the
second quarter. The Company permanently closed eight full-line
stores and opened six factory outlet stores in the last twelve
months.
Vera Bradley Indirect segment revenues totaled $17.3 million, a
2.9% increase over $16.8 million in the prior year second quarter,
reflecting an increase in certain key account orders.
Pura Vida segment revenues totaled $26.0 million, a 21.3%
decrease from $33.1 million in the prior year.
Second quarter consolidated gross profit totaled $60.5 million,
or 46.4% of net revenues, compared to $80.4 million, or 54.6% of
net revenues, in the prior year. On a non-GAAP basis, current year
gross profit totaled $67.8 million, or 52.0% of net revenues. The
current year gross profit rate was negatively impacted by higher
inbound and outbound freight expense, deleverage of overhead costs,
and channel mix changes, partially offset by price increases.
Second quarter consolidated SG&A expense totaled $74.0
million, or 56.8% of net revenues, compared to $68.7 million, or
46.7% of net revenues, in the prior year. On a non-GAAP basis,
consolidated SG&A expense totaled $64.0 million, or 49.1% of
net revenues, for the current year second quarter, compared to
$68.0 million, or 46.2% 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 a reduction in
variable-related expenses due to the lower sales volume and other
cost reduction initiatives.
The Company’s second quarter consolidated operating loss totaled
($42.8) million, or (32.8%) of net revenues, compared to
consolidated operating income of $12.6 million, or 8.6% of net
revenues, in the prior year second quarter. On a non-GAAP basis,
the Company’s current year consolidated operating income totaled
$3.9 million, or 3.0% of net revenues, compared to $13.4 million,
or 9.1% of net revenues, in the prior year.
By segment:
- Vera Bradley Direct operating income was $10.0 million, or
11.5% of Direct net revenues, for the second quarter, compared to
$23.2 million, or 23.9% of Direct net revenues, in the prior year.
On a non-GAAP basis, current year Direct operating income totaled
$16.2 million, or 18.6% of Direct revenues.
- Vera Bradley Indirect operating income was $3.9 million, or
22.6% of Indirect net revenues, compared to $5.6 million, or 33.3%
of Indirect net revenues, in the prior year. On a non-GAAP basis,
current year Indirect operating income totaled $4.9 million, or
28.4% of Indirect net revenues.
- Pura Vida’s operating loss was ($28.5) million, or (109.6%) of
Pura Vida net revenues, in the current year, compared to operating
income of $3.2 million, or 9.8% of Pura Vida net revenues, in the
prior year. On a non-GAAP basis, Pura Vida’s operating income was
$2.6 million, or 9.8% of Pura Vida net revenues, compared to $4.0
million, or 12.1% of Pura Vida net revenues, in the prior
year.
Details for the Six Months
Vera Bradley Direct segment revenues for the current year
six-month period totaled $148.6 million, a 9.3% decrease from
$163.9 million in the prior year. Comparable sales declined 12.7%
for the six months.
Vera Bradley Indirect segment revenues for the six months
totaled $34.3 million, a 6.9% increase over $32.1 million, last
year, reflecting an increase in certain key and specialty account
orders.
Pura Vida segment revenues totaled $45.9 million, a 23.8%
decline from $60.2 million in the prior year.
Consolidated gross profit for the six months totaled $113.0
million, or 49.4% of net revenues, compared to $139.5 million, or
54.5% of net revenues, in the prior year. On a non-GAAP basis,
current year gross profit totaled $120.3 million, or 52.6% 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 six months, consolidated SG&A expense totaled $135.0
million, or 59.0% of net revenues, compared to $129.6 million, or
50.6% of net revenues, in the prior year. On a non-GAAP basis,
current year consolidated SG&A expense totaled $123.4 million,
or 53.9% of net revenues, compared to $128.1 million, or 50.0% 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 a reduction in variable-related expenses due
to the lower sales volume and other cost reduction initiatives.
For the six months, the Company’s consolidated operating loss
totaled ($51.1) million, or (22.3%) of net revenues, compared to
consolidated operating income of $10.7 million, or 4.2% of net
revenues, in the prior year six-month period. On a non-GAAP basis,
the Company’s current year consolidated operating loss was ($2.9)
million, or (1.2%) of net revenues, compared to consolidated
operating income of $12.2 million, or 4.8% or net revenues, in the
prior year.
By segment:
- Vera Bradley Direct operating income was $15.5 million, or
10.5% of Direct net revenues, compared to $34.0 million, or 20.8%
of Direct net revenues, in the prior year. On a non-GAAP basis,
current year Direct operating income was $21.7 million, or 14.6% of
Direct net revenues.
- Vera Bradley Indirect operating income was $9.4 million, or
27.4% of Indirect net revenues, compared to $10.1 million, or 31.3%
of Indirect net revenues, in the prior year. On a non-GAAP basis,
current year Indirect operating income totaled $10.4 million, or
30.3% of Indirect net revenues.
- Pura Vida’s operating loss was ($27.5) million, or (59.9%) of
Pura Vida net revenues, for the current year, compared to operating
income of $5.7 million, or 9.5% of Pura Vida net revenues, in the
prior year. On a non-GAAP basis, Pura Vida’s operating income was
$4.4 million, or 9.5% of Pura Vida net revenues, compared to $7.3
million, or 12.1% of Pura Vida net revenues, in the prior
year.
Balance Sheet
Net capital spending for the second quarter and six months
totaled $2.7 million and $4.4 million, respectively.
Cash, cash equivalents, and investments as of July 30, 2022
totaled $38.3 million compared to $76.5 million at the end of last
year’s second quarter. The Company had no borrowings on its $75
million ABL credit facility at quarter end.
Total quarter-end inventory was $179.6 million, compared to
$148.0 million at the end of the second quarter last year. Current
year inventory was higher than the prior year primarily due to
approximately $24.0 million of additional inventory in-transit as
the Company continues to navigate delays in the supply chain and
ensures it has adequate inventory coverage going into the fall and
holiday selling periods.
During the second quarter, the Company repurchased approximately
$6.0 million of its common stock (approximately 1.0 million shares
at an average price of $6.11), bringing year-to-date purchases
through the end of the second quarter to approximately $16.5
million (approximately 2.4 million shares at an average price of
$6.84). The Company has $29.3 million of remaining availability
under its $50.0 million repurchase authorization that expires in
December 2024.
Forward Outlook
Wallstrom also commented, "We expect the challenging
macroeconomic environment to continue for the balance of the year
and anticipate it will take additional time to return the Pura Vida
ecommerce business to growth, high gas prices and other
inflationary pressures will continue to impact the Vera Bradley
factory channel, and there will be continued pressure on gross
margin. Therefore, we believe it is appropriate to further adjust
our outlook for the fiscal year.”
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 impairment charges,
inventory adjustments, severance and other employee costs,
consulting fees, store and right-of-use asset impairment charges,
purchase order cancellation fees, intangible asset amortization,
goodMRKT exit costs, and any similar charges.
For Fiscal 2023, the Company’s updated expectations are as
follows:
- Consolidated net revenues of $480 to $490 million. Net revenues
totaled $540.5 million in Fiscal 2022. Year-over-year Vera Bradley
revenues are expected to decline between 7% and 9%, and Pura Vida
revenues are expected to decline between 16% and 21%.
- A consolidated gross profit percentage of 53.7% to 54.1%
compared to 53.3% in Fiscal 2022. The expected year-over-year
increase is primarily related to incremental inbound and outbound
freight expense and expected deleverage on overhead costs, more
than offset by price increases.
- Consolidated SG&A expense of $246 to $250 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 $14.5 million
compared to $30.1 million in Fiscal 2022.
- Consolidated diluted EPS of $0.20 to $0.28 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 $8 to $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 free cash flow; cost of sales;
gross profit; selling, general, and administrative expenses;
impairment of goodwill and intangible assets; operating (loss)
income; net (loss) income; net (loss) income attributable and
available to Vera Bradley, Inc.; and diluted net (loss) income 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. A recast of the supplemental
schedule for the current year first quarter has been provided to
exclude the consulting fees related to the cost savings initiatives
for consistency with the current year second quarter supplemental
schedule.
Call Information
A conference call to discuss results for the second quarter is
scheduled for today, Wednesday, August 31, 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 3589431.
A replay will be available shortly after the conclusion of the call
and remain available through September 14, 2022. To access the
recording, listeners should dial (844) 512-2921, and enter the
access code 3589431.
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 two 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
Communicationsjbentley@verabradley.com (260) 207-5116
Media:mediacontact@verabradley.com877-708-VERA (8372)
|
Vera Bradley, Inc. |
|
Condensed Consolidated Balance Sheets |
|
(in thousands) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
July 30, 2022 |
|
January 29, 2022 |
|
July 31, 2021 |
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
38,321 |
|
|
$ |
88,436 |
|
|
$ |
75,753 |
|
|
Short-term investments |
|
- |
|
|
|
- |
|
|
|
727 |
|
|
Accounts receivable, net |
|
25,593 |
|
|
|
20,681 |
|
|
|
29,897 |
|
|
Inventories |
|
179,557 |
|
|
|
144,881 |
|
|
|
148,048 |
|
|
Income taxes receivable |
|
5,113 |
|
|
|
9,391 |
|
|
|
6,289 |
|
|
Prepaid expenses and other current assets |
|
16,913 |
|
|
|
15,928 |
|
|
|
15,627 |
|
|
Total current assets |
|
265,497 |
|
|
|
279,317 |
|
|
|
276,341 |
|
|
|
|
|
|
|
|
|
Operating right-of-use assets |
|
85,793 |
|
|
|
79,873 |
|
|
|
86,617 |
|
|
Property, plant, and equipment, net |
|
60,305 |
|
|
|
59,941 |
|
|
|
62,350 |
|
|
Intangible assets, net |
|
32,769 |
|
|
|
44,223 |
|
|
|
45,759 |
|
|
Goodwill |
|
24,833 |
|
|
|
44,254 |
|
|
|
44,254 |
|
|
Deferred income taxes |
|
9,276 |
|
|
|
3,857 |
|
|
|
3,294 |
|
|
Other assets |
|
4,748 |
|
|
|
6,081 |
|
|
|
6,444 |
|
|
Total assets |
$ |
483,221 |
|
|
$ |
517,546 |
|
|
$ |
525,059 |
|
|
|
|
|
|
|
|
|
Liabilities, Redeemable Noncontrolling Interest, and
Shareholders' Equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
$ |
43,722 |
|
|
$ |
30,492 |
|
|
$ |
30,247 |
|
|
Accrued employment costs |
|
16,018 |
|
|
|
12,463 |
|
|
|
15,465 |
|
|
Short-term operating lease liabilities |
|
19,768 |
|
|
|
18,699 |
|
|
|
20,584 |
|
|
Other accrued liabilities |
|
21,526 |
|
|
|
16,422 |
|
|
|
17,522 |
|
|
Income taxes payable |
|
374 |
|
|
|
- |
|
|
|
- |
|
|
Total current liabilities |
|
101,408 |
|
|
|
78,076 |
|
|
|
83,818 |
|
|
|
|
|
|
|
|
|
Long-term operating lease liabilities |
|
84,015 |
|
|
|
80,861 |
|
|
|
87,984 |
|
|
Other long-term liabilities |
|
157 |
|
|
|
195 |
|
|
|
71 |
|
|
Total liabilities |
|
185,580 |
|
|
|
159,132 |
|
|
|
171,873 |
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interest |
|
23,491 |
|
|
|
30,974 |
|
|
|
30,364 |
|
|
Shareholders' equity: |
|
|
|
|
|
|
Additional paid-in-capital |
|
107,941 |
|
|
|
107,907 |
|
|
|
106,455 |
|
|
Retained earnings |
|
297,623 |
|
|
|
334,364 |
|
|
|
323,431 |
|
|
Accumulated other comprehensive loss |
|
(135 |
) |
|
|
(29 |
) |
|
|
(4 |
) |
|
Treasury stock |
|
(131,279 |
) |
|
|
(114,802 |
) |
|
|
(107,060 |
) |
|
Total shareholders' equity of Vera Bradley, Inc. |
|
274,150 |
|
|
|
327,440 |
|
|
|
322,822 |
|
|
Total liabilities, redeemable noncontrolling interest, and
shareholders' equity |
$ |
483,221 |
|
|
$ |
517,546 |
|
|
$ |
525,059 |
|
|
|
|
|
|
|
|
|
Vera Bradley, Inc. |
|
|
Condensed Consolidated Statements of
Operations |
|
|
(in thousands, except per share amounts) |
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
Twenty-Six Weeks Ended |
|
|
|
July 30, 2022 |
|
July 31, 2021 |
|
July 30, 2022 |
|
July 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
$ |
130,371 |
|
|
$ |
147,048 |
|
$ |
228,830 |
|
|
$ |
256,142 |
|
|
Cost of sales |
|
69,854 |
|
|
|
66,687 |
|
|
115,799 |
|
|
|
116,617 |
|
|
Gross profit |
|
60,517 |
|
|
|
80,361 |
|
|
113,031 |
|
|
|
139,525 |
|
|
Selling, general, and administrative expenses |
|
74,042 |
|
|
|
68,729 |
|
|
134,956 |
|
|
|
129,625 |
|
|
Impairment of goodwill and intangible assets |
|
29,338 |
|
|
|
- |
|
|
29,338 |
|
|
|
- |
|
|
Other income, net |
|
42 |
|
|
|
1,016 |
|
|
209 |
|
|
|
789 |
|
|
Operating (loss) income |
|
(42,821 |
) |
|
|
12,648 |
|
|
(51,054 |
) |
|
|
10,689 |
|
|
Interest expense, net |
|
36 |
|
|
|
119 |
|
|
76 |
|
|
|
209 |
|
|
Income (loss) before income taxes |
|
(42,857 |
) |
|
|
12,529 |
|
|
(51,130 |
) |
|
|
10,480 |
|
|
Income tax (benefit) expense |
|
(5,956 |
) |
|
|
2,672 |
|
|
(7,519 |
) |
|
|
2,141 |
|
|
Net (loss) income |
|
(36,901 |
) |
|
|
9,857 |
|
|
(43,611 |
) |
|
|
8,339 |
|
|
Less: Net (loss) income attributable to redeemable noncontrolling
interest |
|
(7,134 |
) |
|
|
807 |
|
|
(6,870 |
) |
|
|
1,434 |
|
|
Net (loss) income attributable to Vera Bradley, Inc. |
$ |
(29,767 |
) |
|
$ |
9,050 |
|
$ |
(36,741 |
) |
|
$ |
6,905 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted-average shares outstanding |
|
31,429 |
|
|
|
34,001 |
|
|
32,051 |
|
|
|
33,795 |
|
|
Diluted weighted-average shares outstanding |
|
31,429 |
|
|
|
34,500 |
|
|
32,051 |
|
|
|
34,502 |
|
| |
|
|
|
|
|
|
|
|
|
Basic net (loss) income per share available to Vera Bradley, Inc.
common shareholders |
$ |
(0.95 |
) |
|
$ |
0.27 |
|
$ |
(1.15 |
) |
|
$ |
0.20 |
|
|
Diluted net (loss) income per share available to Vera Bradley, Inc.
common shareholders |
$ |
(0.95 |
) |
|
$ |
0.26 |
|
$ |
(1.15 |
) |
|
$ |
0.20 |
|
| |
|
|
|
|
|
|
|
|
|
Vera Bradley, Inc. |
|
Condensed Consolidated Statements of Cash
Flows |
|
(in thousands) |
|
(unaudited) |
| |
|
|
|
| |
|
|
|
| |
Twenty-Six Weeks Ended |
| |
July 30, 2022 |
|
July 31, 2021 |
| Cash flows from
operating activities |
|
|
|
|
Net (loss) income |
$ |
(43,611 |
) |
|
$ |
8,339 |
|
| Adjustments to reconcile net
(loss) income to net cash (used in) provided by operating
activities: |
|
|
|
|
Depreciation of property, plant, and equipment |
|
4,371 |
|
|
|
4,514 |
|
|
Amortization of operating right-of-use assets |
|
10,621 |
|
|
|
10,026 |
|
|
Goodwill and intangible asset impairment |
|
29,338 |
|
|
|
- |
|
|
Other impairment charges |
|
1,351 |
|
|
|
- |
|
|
Amortization of intangible assets |
|
1,537 |
|
|
|
1,537 |
|
|
Provision for doubtful accounts |
|
(119 |
) |
|
|
26 |
|
|
Stock-based compensation |
|
1,444 |
|
|
|
3,372 |
|
|
Deferred income taxes |
|
(5,419 |
) |
|
|
236 |
|
|
Other non-cash gain, net |
|
- |
|
|
|
(45 |
) |
|
Changes in assets and liabilities: |
|
|
|
|
Accounts receivable |
|
(4,793 |
) |
|
|
(2,380 |
) |
|
Inventories |
|
(34,676 |
) |
|
|
(6,632 |
) |
|
Prepaid expenses and other assets |
|
348 |
|
|
|
2,153 |
|
|
Accounts payable |
|
12,759 |
|
|
|
2,696 |
|
|
Income taxes |
|
4,652 |
|
|
|
762 |
|
|
Operating lease liabilities, net |
|
(12,910 |
) |
|
|
(13,202 |
) |
|
Accrued and other liabilities |
|
7,989 |
|
|
|
5,085 |
|
| Net cash (used in) provided by
operating activities |
|
(27,118 |
) |
|
|
16,487 |
|
| |
|
|
|
| Cash flows from
investing activities |
|
|
|
|
Purchases of property, plant, and equipment |
|
(4,391 |
) |
|
|
(2,281 |
) |
|
Proceeds from maturities and sales of investments |
|
- |
|
|
|
565 |
|
|
Proceeds from disposal of property, plant, and equipment |
|
- |
|
|
|
45 |
|
| Net cash used in investing
activities |
|
(4,391 |
) |
|
|
(1,671 |
) |
| |
|
|
|
| Cash flows from
financing activities |
|
|
|
|
Tax withholdings for equity compensation |
|
(1,410 |
) |
|
|
(2,350 |
) |
|
Repurchase of common stock |
|
(16,477 |
) |
|
|
- |
|
|
Distributions to redeemable noncontrolling interest |
|
(613 |
) |
|
|
(879 |
) |
| Net cash used in financing
activities |
|
(18,500 |
) |
|
|
(3,229 |
) |
| Effect of exchange rate
changes on cash and cash equivalents |
|
(106 |
) |
|
|
(9 |
) |
| |
|
|
|
| Net (decrease) increase in
cash and cash equivalents |
$ |
(50,115 |
) |
|
$ |
11,578 |
|
| Cash and cash equivalents,
beginning of period |
|
88,436 |
|
|
|
64,175 |
|
| Cash and cash equivalents, end
of period |
$ |
38,321 |
|
|
$ |
75,753 |
|
| |
|
|
|
|
Vera Bradley, Inc. |
|
First Quarter Fiscal 2023 |
|
GAAP to Non-GAAP Reconciliation Thirteen Weeks Ended April
30, 2022 |
|
(in thousands, except per share amounts) |
|
(unaudited) |
|
|
Thirteen Weeks Ended |
|
| |
As Reported |
|
Other Items |
|
Non-GAAP (Excluding Items) |
|
|
Gross profit |
$ |
52,514 |
|
|
$ |
- |
|
|
$ |
52,514 |
|
|
|
Selling, general, and administrative expenses |
|
60,914 |
|
|
|
1,511 |
|
1 |
|
59,403 |
|
|
|
Impairment of goodwill and intangible assets |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
Operating loss |
|
(8,233 |
) |
|
|
(1,511 |
) |
|
|
(6,722 |
) |
|
|
Loss before income taxes |
|
(8,273 |
) |
|
|
(1,511 |
) |
|
|
(6,762 |
) |
|
|
Income tax benefit |
|
(1,563 |
) |
|
|
(375 |
) |
2 |
|
(1,188 |
) |
|
|
Net loss |
|
(6,710 |
) |
|
|
(1,136 |
) |
|
|
(5,574 |
) |
|
|
Less: Net income (loss) attributable to redeemable noncontrolling
interest |
|
264 |
|
|
|
(192 |
) |
|
|
456 |
|
|
|
Net loss attributable to Vera Bradley, Inc. |
|
(6,974 |
) |
|
|
(944 |
) |
|
|
(6,030 |
) |
|
|
Diluted net loss per share available to Vera Bradley, Inc. common
shareholders |
$ |
(0.21 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.18 |
) |
|
|
|
|
|
|
|
|
|
|
Vera Bradley Direct segment operating income |
$ |
5,503 |
|
|
$ |
- |
|
|
$ |
5,503 |
|
|
|
Vera Bradley Indirect segment operating income |
$ |
5,479 |
|
|
$ |
- |
|
|
$ |
5,479 |
|
|
|
Pura Vida segment operating income (loss) |
$ |
1,056 |
|
|
$ |
(769 |
) |
3 |
$ |
1,825 |
|
|
|
Unallocated corporate expenses |
$ |
(20,271 |
) |
|
$ |
(742 |
) |
4 |
$ |
(19,529 |
) |
|
|
|
|
|
|
|
|
|
|
1Items include $769 for the amortization of definite-lived
intangible assets; $592 for a right-of-use asset impairment charge;
and $150 for consulting fees associated with cost savings
initiatives |
|
|
2Related to the tax impact of the charges mentioned above |
|
|
3Related to the amortization of definite-lived intangible
assets |
|
|
4Related to $592 for a right-of-use asset impairment charge and
$150 for consulting fees associated with cost savings
initiatives |
|
|
|
|
|
Vera Bradley, Inc. |
|
Second Quarter Fiscal 2023 |
|
GAAP to Non-GAAP Reconciliation Thirteen Weeks Ended July
30, 2022 |
|
(in thousands, except per share amounts) |
|
(unaudited) |
|
|
Thirteen Weeks Ended |
|
| |
As Reported |
|
Other Items |
|
Non-GAAP (Excluding Items) |
|
|
Gross profit (loss) |
$ |
60,517 |
|
|
$ |
(7,276 |
) |
1 |
$ |
67,793 |
|
|
|
Selling, general, and administrative expenses |
|
74,042 |
|
|
|
10,076 |
|
2 |
|
63,966 |
|
|
|
Impairment of goodwill and intangible assets |
|
29,338 |
|
|
|
29,338 |
|
|
|
- |
|
|
|
Operating (loss) income |
|
(42,821 |
) |
|
|
(46,690 |
) |
|
|
3,869 |
|
|
|
(Loss) Income before income taxes |
|
(42,857 |
) |
|
|
(46,690 |
) |
|
|
3,833 |
|
|
|
Income tax (benefit) expense |
|
(5,956 |
) |
|
|
(6,760 |
) |
3 |
|
804 |
|
|
|
Net (loss) income |
|
(36,901 |
) |
|
|
(39,930 |
) |
|
|
3,029 |
|
|
|
Less: Net (loss) income attributable to redeemable noncontrolling
interest |
|
(7,134 |
) |
|
|
(7,771 |
) |
|
|
637 |
|
|
|
Net (loss) income attributable to Vera Bradley, Inc. |
|
(29,767 |
) |
|
|
(32,159 |
) |
|
|
2,392 |
|
|
|
Diluted net (loss) income per share available to Vera Bradley, Inc.
common shareholders |
$ |
(0.95 |
) |
|
$ |
(1.02 |
) |
|
$ |
0.08 |
|
|
|
|
|
|
|
|
|
|
|
Vera Bradley Direct segment operating income (loss) |
$ |
10,044 |
|
|
$ |
(6,173 |
) |
4 |
$ |
16,217 |
|
|
|
Vera Bradley Indirect segment operating income (loss) |
$ |
3,918 |
|
|
$ |
(994 |
) |
5 |
$ |
4,912 |
|
|
|
Pura Vida segment operating (loss) income |
$ |
(28,534 |
) |
|
$ |
(31,085 |
) |
6 |
$ |
2,551 |
|
|
|
Unallocated corporate expenses |
$ |
(28,249 |
) |
|
$ |
(8,438 |
) |
7 |
$ |
(19,811 |
) |
|
|
|
|
|
|
|
|
|
|
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 $1,134 for PO cancellation fees |
|
|
2Items include $5,714 for severance charges; $2,755 for consulting
fees associated with cost savings initiatives and CEO search; $768
for the amortization of definite-lived intangible assets; $759 for
store impairment charges; 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 $5,097 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; $963 for inventory adjustments associated with mask
products; $768 for the amortization of definite-lived intangible
assets; and $16 for severance charges |
|
|
7Related to $5,683 for severance charges and $2,755 for consulting
fees associated with cost savings initiatives and CEO search |
|
|
|
|
|
Vera Bradley, Inc. |
|
Second Quarter Fiscal 2022 |
|
GAAP to Non-GAAP Reconciliation Thirteen Weeks Ended July
31, 2021 |
|
(in thousands, except per share amounts) |
|
(unaudited) |
|
|
Thirteen Weeks Ended |
|
| |
As Reported |
|
Other Items |
|
Non-GAAP (Excluding Items) |
|
|
Gross profit |
$ |
80,361 |
|
|
$ |
- |
|
|
$ |
80,361 |
|
|
|
Selling, general, and administrative expenses |
|
68,729 |
|
|
|
768 |
|
1 |
|
67,961 |
|
|
|
Operating income (loss) |
|
12,648 |
|
|
|
(768 |
) |
|
|
13,416 |
|
|
|
Income (loss) before income taxes |
|
12,529 |
|
|
|
(768 |
) |
|
|
13,297 |
|
|
|
Income tax expense (benefit) |
|
2,672 |
|
|
|
(130 |
) |
|
|
2,802 |
|
|
|
Net income (loss) |
|
9,857 |
|
|
|
(638 |
) |
|
|
10,495 |
|
|
|
Less: Net income (loss) attributable to redeemable noncontrolling
interest |
|
807 |
|
|
|
(192 |
) |
|
|
999 |
|
|
|
Net income (loss) attributable to Vera Bradley, Inc. |
|
9,050 |
|
|
|
(446 |
) |
|
|
9,496 |
|
|
|
Diluted net income (loss) per share available to Vera Bradley, Inc.
common shareholders |
$ |
0.26 |
|
|
$ |
(0.01 |
) |
|
$ |
0.28 |
|
|
|
|
|
|
|
|
|
|
|
Vera Bradley Direct segment operating income |
$ |
23,168 |
|
|
$ |
- |
|
|
$ |
23,168 |
|
|
|
Vera Bradley Indirect segment operating income |
$ |
5,601 |
|
|
$ |
- |
|
|
$ |
5,601 |
|
|
|
Pura Vida segment operating income (loss) |
$ |
3,226 |
|
|
$ |
(768 |
) |
1 |
$ |
3,994 |
|
|
|
Unallocated corporate expenses |
$ |
(19,347 |
) |
|
$ |
- |
|
|
$ |
(19,347 |
) |
|
|
|
|
|
|
|
|
|
|
1Includes the amortization of definite-lived intangible assets |
|
|
|
|
|
Vera Bradley, Inc. |
|
GAAP to Non-GAAP Reconciliation Twenty-Six Weeks Ended July
30, 2022 |
|
(in thousands, except per share amounts) |
|
(unaudited) |
|
|
Twenty-Six Weeks Ended |
|
| |
As Reported |
|
Other Items |
|
Non-GAAP (Excluding Items) |
|
|
Gross profit (loss) |
$ |
113,031 |
|
|
$ |
(7,276 |
) |
1 |
$ |
120,307 |
|
|
|
Selling, general, and administrative expenses |
|
134,956 |
|
|
|
11,587 |
|
2 |
|
123,369 |
|
|
|
Impairment of goodwill and intangible assets |
|
29,338 |
|
|
|
29,338 |
|
|
|
- |
|
|
|
Operating loss |
|
(51,054 |
) |
|
|
(48,201 |
) |
|
|
(2,853 |
) |
|
|
Loss before income taxes |
|
(51,130 |
) |
|
|
(48,201 |
) |
|
|
(2,929 |
) |
|
|
Income tax benefit |
|
(7,519 |
) |
|
|
(7,135 |
) |
3 |
|
(384 |
) |
|
|
Net loss |
|
(43,611 |
) |
|
|
(41,066 |
) |
|
|
(2,545 |
) |
|
|
Less: Net (loss) income attributable to redeemable noncontrolling
interest |
|
(6,870 |
) |
|
|
(7,963 |
) |
|
|
1,093 |
|
|
|
Net loss attributable to Vera Bradley, Inc. |
|
(36,741 |
) |
|
|
(33,103 |
) |
|
|
(3,638 |
) |
|
|
Diluted net loss per share available to Vera Bradley, Inc. common
shareholders |
$ |
(1.15 |
) |
|
$ |
(1.03 |
) |
|
$ |
(0.11 |
) |
|
|
|
|
|
|
|
|
|
|
Vera Bradley Direct segment operating income (loss) |
$ |
15,547 |
|
|
$ |
(6,173 |
) |
4 |
$ |
21,720 |
|
|
|
Vera Bradley Indirect segment operating income (loss) |
$ |
9,397 |
|
|
$ |
(994 |
) |
5 |
$ |
10,391 |
|
|
|
Pura Vida segment operating (loss) income |
$ |
(27,478 |
) |
|
$ |
(31,854 |
) |
6 |
$ |
4,376 |
|
|
|
Unallocated corporate expenses |
$ |
(48,520 |
) |
|
$ |
(9,180 |
) |
7 |
$ |
(39,340 |
) |
|
|
|
|
|
|
|
|
|
|
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 $1,134 for PO cancellation fees |
|
|
2Items include $5,714 for severance charges; $2,905 for consulting
fees associated with cost savings initiatives and CEO search;
$1,537 for the amortization of definite-lived intangible assets;
$1,351 for store and right-of-use asset impairment charges; 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 $5,097 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; $963 for inventory adjustments associated with mask
products; $1,537 for the amortization of definite-lived intangible
assets; and $16 for severance charges |
|
|
7Related to $5,683 for severance charges; $2,905 for consulting
fees associated with cost savings initiatives and CEO search; and
$592 for a right-of-use asset impairment charge |
|
|
|
|
|
Vera Bradley, Inc. |
|
GAAP to Non-GAAP Reconciliation Twenty-Six Weeks Ended July
31, 2021 |
|
(in thousands, except per share amounts) |
|
(unaudited) |
|
|
Twenty-Six Weeks Ended |
|
| |
As Reported |
|
Other Items |
|
Non-GAAP (Excluding Items) |
|
|
Gross profit |
$ |
139,525 |
|
|
$ |
- |
|
|
$ |
139,525 |
|
|
|
Selling, general, and administrative expenses |
|
129,625 |
|
|
|
1,537 |
|
1 |
|
128,088 |
|
|
|
Operating income (loss) |
|
10,689 |
|
|
|
(1,537 |
) |
|
|
12,226 |
|
|
|
Income (loss) before income taxes |
|
10,480 |
|
|
|
(1,537 |
) |
|
|
12,017 |
|
|
|
Income tax expense (benefit) |
|
2,141 |
|
|
|
(293 |
) |
|
|
2,434 |
|
|
|
Net income (loss) |
|
8,339 |
|
|
|
(1,244 |
) |
|
|
9,583 |
|
|
|
Less: Net income (loss) attributable to redeemable noncontrolling
interest |
|
1,434 |
|
|
|
(384 |
) |
|
|
1,818 |
|
|
|
Net income (loss) attributable to Vera Bradley, Inc. |
|
6,905 |
|
|
|
(860 |
) |
|
|
7,765 |
|
|
|
Diluted net income (loss) per share available to Vera Bradley, Inc.
common shareholders |
$ |
0.20 |
|
|
$ |
(0.02 |
) |
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
|
|
Vera Bradley Direct segment operating income |
$ |
34,028 |
|
|
$ |
- |
|
|
$ |
34,028 |
|
|
|
Vera Bradley Indirect segment operating income |
$ |
10,062 |
|
|
$ |
- |
|
|
$ |
10,062 |
|
|
|
Pura Vida segment operating income (loss) |
$ |
5,734 |
|
|
$ |
(1,537 |
) |
1 |
$ |
7,271 |
|
|
|
Unallocated corporate expenses |
$ |
(39,135 |
) |
|
$ |
- |
|
|
$ |
(39,135 |
) |
|
|
|
|
|
|
|
|
|
|
1Includes the amortization of definite-lived intangible assets |
|
|
|
|
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