Vera Bradley, Inc. (Nasdaq: VRA) today announced its financial
results for the third quarter and nine months ended October 28,
2023.
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
Jackie Ardrey, Chief Executive Officer of the Company, stated,
“Our efforts continue on Project Restoration, and
we are very pleased with our progress to date as our associates
across the Company work together to position Vera Bradley, Inc. for
long-term, profitable growth. Year-over-year third quarter non-GAAP
income was essentially flat, as we delivered solid gross margin
expansion and carefully managed our expenses, despite sales
challenges.”
“Total third quarter revenues for the Vera Bradley brand
decreased 5.0% from last year,” Ardrey noted. “Vera Bradley Direct
revenue declines primarily resulted from continued weakness in the
outlet store channel and the impact of store closures.
Year-over-year Vera Bradley Indirect revenues were up as compared
to last year.
“Pura Vida year-over-year sales decreased 18.3%, with declines
in both wholesale and ecommerce revenues, as prior year sales were
driven by meaningfully higher levels of marketing spend, along with
increased liquidation and clearance activity. Store sales remained
strong. With our diligent expense management and focus on
profitability, Pura Vida year-over-year third quarter operating
income improved.
“At both brands, customers have responded to our latest iconic
product collaborations and to our new, innovative, and on-trend
product offerings, even as they have been more careful and
thoughtful with their discretionary spending in the current macro
environment.”
Ardrey continued, “We continue to diligently manage our
debt-free balance sheet, adding to our year-over-year cash position
while strategically lowering our inventory levels. Strength in this
area is important in navigating an uncertain retail environment as
well as in supporting our Project Restoration initiatives.
“Presently, we are taking targeted and prudent actions to
stabilize revenues, and we remain focused on strong financial
discipline and controlling what we can control as we react both
strategically and tactically to current market conditions.
Simultaneously, we have made meaningful progress on our long-term
strategic plan, Project Restoration, focusing on
four key pillars of the business for each brand – Consumer, Brand,
Product, and Channel. We believe execution of Project Restoration
will drive long-term profitable growth and deliver value to our
shareholders.”
Summary of Financial Performance for the Third
Quarter
Consolidated net revenues totaled $115.0 million compared to
$124.0 million in the prior year third quarter ended October 29,
2022.
For the current year third quarter, Vera Bradley, Inc.'s
consolidated net income totaled $5.1 million, or $0.16 per diluted
share. These results included $1.0 million of net after tax
charges, comprised of $0.6 million for the amortization of
definite-lived intangible assets, $0.2 million of severance
charges, and $0.2 million of consulting fees primarily associated
with strategic initiatives. On a non-GAAP basis, Vera Bradley,
Inc.’s consolidated third quarter net income totaled $6.1 million,
or $0.19 per diluted share.
For the prior 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.
Summary of Financial Performance for the Nine
Months
Consolidated net revenues totaled $337.5 million for the current
year nine months ended October 28, 2023, compared to $352.9 million
in the prior year nine-month period ended October 29, 2022.
For the current year nine months, Vera Bradley, Inc.’s
consolidated net income totaled $9.7 million, or $0.31 per diluted
share. These results included $4.0 million of net after tax
charges, comprised of $1.8 million of severance charges, $1.7
million for the amortization of definite-lived intangible assets,
and $0.5 million of consulting and professional fees primarily
associated with strategic initiatives. On a non-GAAP basis, Vera
Bradley, Inc.’s consolidated net income for the nine months totaled
$13.7 million, or $0.44 per diluted share.
For the prior 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.
Non-GAAP Numbers
The current year non-GAAP third quarter and nine-month income
statement numbers referenced below exclude the previously outlined
severance charges, intangible asset amortization, and consulting
and professional fees. The prior year non-GAAP third quarter income
statement numbers referenced below exclude the previously outlined
consulting and professional fees, 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 prior 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
and write-offs, consulting and professional fees, intangible asset
amortization, store and right-of-use asset impairment charges,
purchase order cancellation fees, and goodMRKT exit costs.
Third Quarter Details
Current year third quarter Vera Bradley Direct segment revenues
totaled $72.3 million, a 9.7% decrease from $80.1 million in the
prior year third quarter. Comparable sales declined 8.2% in the
third quarter, primarily driven by weakness in the outlet channel.
Total revenues were also impacted by store closures over the last
twelve months, including 15 full-line and two outlet stores. The
Company also opened three outlet stores over the last twelve
months.
Vera Bradley Indirect segment revenues totaled $25.0 million, a
12.0% increase over $22.3 million in the prior year third quarter,
reflecting a significant one-time key account order that did not
take place in the prior period.
Pura Vida segment revenues totaled $17.7 million, an 18.3%
decrease from $21.7 million in the prior year third quarter,
reflecting a decline in sales to wholesale accounts and a decline
in ecommerce sales, partially offset by growth in retail store
sales.
Third quarter consolidated gross profit totaled $63.0 million,
or 54.8% of net revenues, compared to $65.9 million, or 53.1% of
net revenues, in the prior year. On a non-GAAP basis, prior year
gross profit totaled $65.6 million, or 52.9% of net revenues. The
current year gross profit rate compared to the prior year non-GAAP
rate was favorably impacted by lower year-over-year inbound and
outbound freight expense, lower supply chain costs, and the
sell-through of previously-reserved inventory, partially offset by
increased promotional activity. Prior year gross profit was
materially impacted by high inbound and outbound freight expense as
well as deleverage of overhead costs.
Third quarter consolidated SG&A expense totaled $56.4
million, or 49.0% of net revenues, compared to $60.1 million, or
48.4% of net revenues, in the prior year. On a non-GAAP basis,
consolidated SG&A expense totaled $55.1 million, or 48.0% of
net revenues for the current year third quarter, compared to $57.6
million, or 46.4% of net revenues, in the prior year.
Vera Bradley’s current year non-GAAP SG&A expenses were lower
than the prior year primarily due to Company-wide cost reduction
initiatives across various areas of the enterprise. The expense
deleverage resulted from lower revenues.
The Company’s third quarter consolidated operating income
totaled $6.8 million, or 5.9% of net revenues, compared to $6.0
million, or 4.8% of net revenues, in the prior year third quarter.
On a non-GAAP basis, the Company’s current year consolidated
operating income totaled $8.0 million, or 7.0% of net revenues,
compared to $8.2 million, or 6.6%, of net revenues, in the prior
year.
By segment:
- Vera Bradley Direct operating income was $15.7 million, or
21.7% of Direct net revenues, for the third quarter, compared to
$17.1 million, or 21.3% of Direct net revenues, in the prior year.
On a non-GAAP basis, prior year Direct operating income totaled
$16.8 million, or 21.0% of Direct net revenues.
- Vera Bradley Indirect operating income was $9.0 million, or
35.9% of Indirect net revenues, for the third quarter, compared to
$9.0 million, or 40.4% of Indirect net revenues, in the prior year.
On a non-GAAP basis, prior year Indirect operating income totaled
$9.0 million, or 40.2% of Indirect net revenues.
- Pura Vida’s operating loss was ($0.6) million, or (3.3%) of
Pura Vida net revenues, in the current year, compared to an
operating loss of ($1.4) million, or (6.2%) of Pura Vida net
revenues, in the prior year. On a non-GAAP basis, Pura Vida’s
operating income was $0.1 million, or 0.8% of Pura Vida net
revenues, compared to an operating loss of ($0.1) million, or
(0.3%) 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 $216.9 million, a 5.2% decrease from
$228.7 million in the prior year. Comparable sales declined 5.8%
for the nine months.
Vera Bradley Indirect segment revenues for the nine months
totaled $57.7 million, a 2.0% increase over $56.6 million in the
prior year.
Pura Vida segment revenues for the nine months totaled $62.9
million, a 6.9% decrease from $67.5 million in the prior year,
reflecting a decline in sales to wholesale accounts and a decline
in ecommerce sales, partially offset by growth in retail store
sales.
Consolidated gross profit for the nine months totaled $186.8
million, or 55.3% of net revenues, compared to $178.9 million, or
50.7% of net revenues, in the prior year. On a non-GAAP basis,
prior year gross profit totaled $185.9 million, or 52.7% of net
revenues. The current year gross profit rate compared to the prior
year non-GAAP rate was favorably impacted by lower year-over-year
inbound and outbound freight expense, lower supply chain costs, and
the sell-through of previously-reserved inventory, partially offset
by an increase in promotional activity.
For the nine months, consolidated SG&A expense totaled
$174.3 million, or 51.6% of net revenues, compared to $195.0
million, or 55.3% of net revenues, in the prior year. On a non-GAAP
basis, current year consolidated SG&A expense totaled $169.1
million, or 50.1% of net revenues, compared to $181.0 million, or
51.3% of net revenues, in the prior year. Vera Bradley’s current
year non-GAAP SG&A expenses were lower than the prior year
primarily due Company-wide cost reduction initiatives across
various areas of the enterprise.
For the nine months, the Company’s consolidated operating income
totaled $13.3 million, or 3.9% of net revenues, compared to a
consolidated operating loss of ($45.1) million, or (12.8%) of net
revenues, in the prior year. On a non-GAAP basis, the Company’s
current year consolidated operating income was $18.5 million, or
5.5% of net revenues, compared to $5.3 million, or 1.5% of net
revenues, in the prior year.
By segment:
- Vera Bradley Direct operating income was $43.7 million, or
20.1% of net revenues, compared to $32.6 million, or 14.3% of
Direct net revenues, in the prior year. On a non-GAAP basis,
current year Direct operating income was $44.0 million, or 20.3% of
Direct net revenues, compared to $38.6 million, or 16.9% of Direct
net revenues, in the prior year.
- Vera Bradley Indirect operating income was $19.9 million, or
34.4% of Indirect net revenues, compared to $18.4 million, or 32.5%
of Indirect net revenues, in the prior year. On a non-GAAP basis,
prior year Indirect operating income totaled $19.4 million, or
34.2% of Indirect net revenues.
- Pura Vida’s operating income was $5.0 million, or 7.9% of Pura
Vida net revenues, compared to an operating loss of ($28.8)
million, or (42.7%) of Pura Vida net revenues, in the prior year.
On a non-GAAP basis, Pura Vida’s operating income was $7.2 million,
or 11.5% of Pura Vida net revenues, for the current year, compared
to $4.3 million, or 6.4% of Pura Vida net revenues, for the prior
year.
Balance Sheet
Net capital spending for the nine months ended October 28, 2023
totaled $2.5 million compared to $7.0 million in the prior
year.
Cash and cash equivalents as of October 28, 2023 totaled $52.3
million compared to $25.2 million at the end of last year’s third
quarter. The Company had no borrowings on its $75 million
asset-based lending (“ABL”) facility at quarter end.
Total quarter-end inventory was $129.1 million, compared to
$178.3 million at the end of the third quarter last year.
During the third quarter, the Company repurchased approximately
$0.5 million of its common stock (71,807 shares at an average price
of $6.76), bringing the total repurchased for the nine months to
approximately $1.9 million (320,127 shares at an average price of
$5.94). The Company has $25.8 million remaining under its $50.0
million repurchase authorization that expires in December 2024.
Forward Outlook
Management is updating certain components of guidance for the
fiscal year ending February 3, 2024 (“Fiscal 2024”) based on
performance for the first nine months, Company initiatives
underway, and current macroeconomic trends and expectations. The
Company has revised the guidance range for diluted earnings per
share for the fiscal year.
Excluding net revenues, all forward-looking guidance numbers
referenced below are non-GAAP. The prior year income statement
numbers exclude the previously disclosed goodwill and intangible
asset impairment charges, severance and stock-based retirement
compensation retirement charges and other employee costs, inventory
adjustments and write-offs, certain consulting and professional
fees, intangible asset amortization, store and right-of-use asset
impairment charges, purchase order cancellation fees, and goodMRKT
exit costs. Current year guidance excludes any similar charges.
For Fiscal 2024, the Company’s updated expectations are as
follows:
- Consolidated net revenues of $472 to $478 million. Net revenues
totaled $500.0 million in Fiscal 2023.
- A consolidated gross profit percentage of 54.0% to 54.5%
compared to 51.4% in Fiscal 2023. The Fiscal 2024 gross profit rate
is expected to be favorably impacted by lower year-over-year
freight expense, cost reduction initiatives, and the sell-through
of previously-reserved inventory, partially offset by an increase
in promotional activity.
- Consolidated SG&A expense of $232.5 to $235.5 million
compared to $245.3 million in Fiscal 2023. An expected decline in
SG&A expense is being driven by Company-wide cost reduction
initiatives, partially offset by restoring short-term and long-term
incentive compensation to more normalized levels and incremental
marketing investment intended to accelerate customer file
growth.
- Consolidated operating income of $23.3 to $25.9 million
compared to $12.3 million in Fiscal 2023.
- Free cash flow of between $40 and $43 million compared to a
cash usage of $21.7 million in Fiscal 2023.
- Consolidated diluted EPS of $0.56 to $0.62 based on diluted
weighted-average shares outstanding of approximately 31.0 million
and an effective tax rate of approximately 28%. Diluted EPS totaled
$0.24 last year.
- Net capital spending of
approximately $4 million compared to $8.2 million in the prior
year, reflecting investments associated with new Vera Bradley
outlet stores 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 (cash usage); gross
profit; selling, general, and administrative expenses; operating
income (loss); net income (loss); net income (loss) 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 6, 2023, 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 (888) 204-4368, and enter the access code 7089328.
A replay will be available shortly after the conclusion of the call
and remain available through December 20, 2023. To access the
recording, listeners should dial (844) 512-2921, and enter the
access code 7089328.
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 acquired the remaining 25%
of Pura Vida in January 2023.
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, www.verabradley.com, 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 1,600 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.ca, and
www.puravidabracelets.eu; 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 plans;
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 pandemics. 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 28, 2023. We undertake no
obligation to publicly update or revise any forward-looking
statement. Financial schedules are attached to this release.
CONTACTS:Investors:Julia Bentleyjbentley@verabradley.com
Media:
mediacontact@verabradley.com877-708-VERA (8372)
|
|
|
|
|
|
Vera
Bradley, Inc. |
Condensed
Consolidated Balance Sheets |
(in
thousands) |
(unaudited) |
|
|
|
|
|
|
|
October 28, 2023 |
|
January 28, 2023 |
|
October 29, 2022 |
Assets |
|
|
|
|
|
Current
assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
52,266 |
|
|
$ |
46,595 |
|
|
$ |
25,237 |
|
Accounts receivable, net |
|
25,599 |
|
|
|
22,105 |
|
|
|
25,115 |
|
Inventories |
|
129,140 |
|
|
|
142,275 |
|
|
|
178,334 |
|
Income taxes receivable |
|
1,376 |
|
|
|
1,311 |
|
|
|
4,120 |
|
Prepaid expenses and other current
assets |
|
13,025 |
|
|
|
14,276 |
|
|
|
14,817 |
|
Total
current assets |
|
221,406 |
|
|
|
226,562 |
|
|
|
247,623 |
|
|
|
|
|
|
|
Operating
right-of-use assets |
|
67,037 |
|
|
|
77,954 |
|
|
|
82,683 |
|
Property,
plant, and equipment, net |
|
55,909 |
|
|
|
58,674 |
|
|
|
60,388 |
|
Intangible
assets, net |
|
13,731 |
|
|
|
15,918 |
|
|
|
32,001 |
|
Goodwill |
|
- |
|
|
|
- |
|
|
|
24,833 |
|
Deferred
income taxes |
|
18,961 |
|
|
|
21,542 |
|
|
|
9,381 |
|
Other
assets |
|
5,790 |
|
|
|
3,851 |
|
|
|
4,428 |
|
Total
assets |
$ |
382,834 |
|
|
$ |
404,501 |
|
|
$ |
461,337 |
|
|
|
|
|
|
|
Liabilities, Redeemable Noncontrolling Interest, and
Shareholders' Equity |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts payable |
$ |
12,297 |
|
|
$ |
20,350 |
|
|
$ |
31,125 |
|
Accrued employment costs |
|
11,756 |
|
|
|
14,312 |
|
|
|
12,252 |
|
Short-term operating lease
liabilities |
|
18,673 |
|
|
|
19,714 |
|
|
|
19,742 |
|
Other accrued liabilities |
|
13,671 |
|
|
|
12,723 |
|
|
|
14,771 |
|
Income taxes payable |
|
570 |
|
|
|
558 |
|
|
|
501 |
|
Total
current liabilities |
|
56,967 |
|
|
|
67,657 |
|
|
|
78,391 |
|
|
|
|
|
|
|
Long-term
operating lease liabilities |
|
63,915 |
|
|
|
74,664 |
|
|
|
80,109 |
|
Other
long-term liabilities |
|
71 |
|
|
|
90 |
|
|
|
85 |
|
Total
liabilities |
|
120,953 |
|
|
|
142,411 |
|
|
|
158,585 |
|
|
|
|
|
|
|
Redeemable
noncontrolling interest |
|
- |
|
|
|
10,712 |
|
|
|
23,153 |
|
Shareholders' equity: |
|
|
|
|
|
Additional paid-in-capital |
|
112,397 |
|
|
|
109,718 |
|
|
|
109,070 |
|
Retained earnings |
|
284,322 |
|
|
|
274,629 |
|
|
|
302,790 |
|
Accumulated other comprehensive
loss |
|
(74 |
) |
|
|
(105 |
) |
|
|
(181 |
) |
Treasury stock |
|
(134,764 |
) |
|
|
(132,864 |
) |
|
|
(132,080 |
) |
Total
shareholders' equity of Vera Bradley, Inc. |
|
261,881 |
|
|
|
251,378 |
|
|
|
279,599 |
|
Total
liabilities, redeemable noncontrolling interest, and shareholders'
equity |
$ |
382,834 |
|
|
$ |
404,501 |
|
|
$ |
461,337 |
|
|
|
|
|
|
|
Vera
Bradley, Inc. |
|
Condensed
Consolidated Statements of Operations |
|
(in
thousands, except per share amounts) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
Thirty-Nine Weeks Ended |
|
|
October 28, 2023 |
|
October 29, 2022 |
|
October 28, 2023 |
|
October 29, 2022 |
|
|
|
|
|
|
|
|
|
|
Net
revenues |
$ |
114,987 |
|
|
$ |
124,040 |
|
|
$ |
337,521 |
|
|
$ |
352,870 |
|
|
Cost of
sales |
|
51,980 |
|
|
|
58,164 |
|
|
|
150,749 |
|
|
|
173,963 |
|
|
Gross profit |
|
63,007 |
|
|
|
65,876 |
|
|
|
186,772 |
|
|
|
178,907 |
|
|
Selling,
general, and administrative expenses |
|
56,363 |
|
|
|
60,059 |
|
|
|
174,274 |
|
|
|
195,015 |
|
|
Impairment
of goodwill and intangible assets |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
29,338 |
|
|
Other
income, net |
|
142 |
|
|
|
141 |
|
|
|
773 |
|
|
|
350 |
|
|
Operating income (loss) |
|
6,786 |
|
|
|
5,958 |
|
|
|
13,271 |
|
|
|
(45,096 |
) |
|
Interest
(income) expense, net |
|
(285 |
) |
|
|
39 |
|
|
|
(241 |
) |
|
|
115 |
|
|
Income (loss) before income taxes |
|
7,071 |
|
|
|
5,919 |
|
|
|
13,512 |
|
|
|
(45,211 |
) |
|
Income tax
expense (benefit) |
|
1,953 |
|
|
|
1,090 |
|
|
|
3,819 |
|
|
|
(6,429 |
) |
|
Net income (loss) |
|
5,118 |
|
|
|
4,829 |
|
|
|
9,693 |
|
|
|
(38,782 |
) |
|
Less: Net
loss attributable to redeemable noncontrolling interest |
|
- |
|
|
|
(338 |
) |
|
|
- |
|
|
|
(7,208 |
) |
|
Net income (loss) attributable to Vera Bradley, Inc. |
$ |
5,118 |
|
|
$ |
5,167 |
|
|
$ |
9,693 |
|
|
$ |
(31,574 |
) |
|
|
|
|
|
|
|
|
|
|
Basic
weighted-average shares outstanding |
|
30,814 |
|
|
|
31,061 |
|
|
|
30,836 |
|
|
|
31,721 |
|
|
Diluted
weighted-average shares outstanding |
|
31,322 |
|
|
|
31,229 |
|
|
|
31,246 |
|
|
|
31,721 |
|
|
|
|
|
|
|
|
|
|
|
Basic net
income (loss) per share available to Vera Bradley, Inc. common
shareholders |
$ |
0.17 |
|
|
$ |
0.17 |
|
|
$ |
0.31 |
|
|
$ |
(1.00 |
) |
|
Diluted net
income (loss) per share available to Vera Bradley, Inc. common
shareholders |
$ |
0.16 |
|
|
$ |
0.17 |
|
|
$ |
0.31 |
|
|
$ |
(1.00 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vera
Bradley, Inc. |
|
|
Condensed
Consolidated Statements of Cash Flows |
|
(in
thousands) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirty-Nine Weeks Ended |
|
|
|
October 28, 2023 |
|
October 29, 2022 |
|
|
Cash
flows from operating activities |
|
|
|
|
|
Net income (loss) |
$ |
9,693 |
|
$ |
(38,782) |
|
|
Adjustments
to reconcile net income (loss) to net cash provided by (used in)
operating activities: |
|
|
|
|
|
Depreciation of property, plant, and
equipment |
5,988 |
|
6,685 |
|
|
Amortization of operating
right-of-use assets |
15,622 |
|
16,151 |
|
|
Goodwill and intangible asset
impairment |
- |
|
29,338 |
|
|
Other impairment charges |
- |
|
1,351 |
|
|
Amortization of intangible
assets |
2,187 |
|
2,305 |
|
|
Provision for doubtful accounts |
87 |
|
(80) |
|
|
Stock-based compensation |
2,365 |
|
2,593 |
|
|
Deferred income taxes |
3,155 |
|
(5,524) |
|
|
Other non-cash loss, net |
50 |
|
- |
|
|
Changes in assets and
liabilities: |
|
|
|
|
|
Accounts
receivable |
(3,581) |
|
(4,354) |
|
|
Inventories |
13,135 |
|
(33,453) |
|
|
Prepaid
expenses and other assets |
(688) |
|
2,764 |
|
|
Accounts
payable |
(8,134) |
|
49 |
|
|
Income
taxes |
(53) |
|
5,772 |
|
|
Operating
lease liabilities, net |
(16,495) |
|
(19,262) |
|
|
Accrued
and other liabilities |
(2,273) |
|
(2,311) |
|
|
Net cash
provided by (used in) operating activities |
21,058 |
|
(36,758) |
|
|
|
|
|
|
|
|
Cash
flows from investing activities |
|
|
|
|
|
Purchases of property, plant, and
equipment |
(2,546) |
|
(6,968) |
|
|
Cash paid for business
acquisition |
(10,000) |
|
- |
|
|
Net cash
used in investing activities |
(12,546) |
|
(6,968) |
|
|
|
|
|
|
|
|
Cash
flows from financing activities |
|
|
|
|
|
Tax withholdings for equity
compensation |
(972) |
|
(1,430) |
|
|
Repurchase of common stock |
(1,900) |
|
(17,278) |
|
|
Distributions to redeemable
noncontrolling interest |
- |
|
(613) |
|
|
Net cash
used in financing activities |
(2,872) |
|
(19,321) |
|
|
Effect of
exchange rate changes on cash and cash equivalents |
31 |
|
(152) |
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents |
$ |
5,671 |
|
$ |
(63,199) |
|
|
Cash and
cash equivalents, beginning of period |
46,595 |
|
88,436 |
|
|
Cash and
cash equivalents, end of period |
$ |
52,266 |
|
$ |
25,237 |
|
|
|
|
|
|
|
|
|
|
Vera
Bradley, Inc. |
|
Third
Quarter Fiscal 2024 |
|
GAAP to
Non-GAAP Reconciliation Thirteen Weeks Ended October 28,
2023 |
|
(in
thousands, except per share amounts) |
|
(unaudited) |
|
|
Thirteen Weeks Ended |
|
|
|
As Reported |
|
Other Items |
|
Non-GAAP(Excluding Items) |
|
|
Gross
profit |
$ |
63,007 |
|
|
$ |
- |
|
|
$ |
63,007 |
|
|
|
Selling,
general, and administrative expenses |
|
56,363 |
|
|
|
1,216 |
|
1 |
|
55,147 |
|
|
|
Operating
income (loss) |
|
6,786 |
|
|
|
(1,216 |
) |
|
|
8,002 |
|
|
|
Income
(loss) before income taxes |
|
7,071 |
|
|
|
(1,216 |
) |
|
|
8,287 |
|
|
|
Income tax
expense (benefit) |
|
1,953 |
|
|
|
(234 |
) |
2 |
|
2,187 |
|
|
|
Net income
(loss) |
|
5,118 |
|
|
|
(982 |
) |
|
|
6,100 |
|
|
|
Less: Net
loss attributable to redeemable noncontrolling interest |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
Net income
(loss) attributable to Vera Bradley, Inc. |
|
5,118 |
|
|
|
(982 |
) |
|
|
6,100 |
|
|
|
Diluted net
income (loss) per share available to Vera Bradley, Inc. common
shareholders |
$ |
0.16 |
|
|
$ |
(0.03 |
) |
|
$ |
0.19 |
|
|
|
|
|
|
|
|
|
|
|
Vera Bradley
Direct segment operating income |
$ |
15,708 |
|
|
$ |
- |
|
|
$ |
15,708 |
|
|
|
Vera Bradley
Indirect segment operating income |
$ |
8,967 |
|
|
$ |
- |
|
|
$ |
8,967 |
|
|
|
Pura Vida
segment operating (loss) income |
$ |
(580 |
) |
|
$ |
(729 |
) |
3 |
$ |
149 |
|
|
|
Unallocated
corporate expenses |
$ |
(17,309 |
) |
|
$ |
(487 |
) |
4 |
$ |
(16,822 |
) |
|
|
|
|
|
|
|
|
|
|
1Items include $729
for the amortization of definite-lived intangible assets; $304 for
severance charges; and $183 for certain professional fees and
consulting fees associated with strategic initiatives |
|
|
2Related to the tax
impact of the items mentioned above |
|
|
3Related to $729 for
the amortization of definite-lived intangible assets |
|
|
4Related to $304 for
severance charges; and $183 for certain professional fees and
consulting fees associated with strategic initiatives |
|
|
|
|
|
|
|
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. |
|
GAAP to
Non-GAAP Reconciliation Thirty-Nine Weeks Ended October 28,
2023 |
|
(in
thousands, except per share amounts) |
|
(unaudited) |
|
|
Thirty-Nine Weeks Ended |
|
|
|
As Reported |
|
Other Items |
|
Non-GAAP (Excluding Items) |
|
|
Gross
profit |
$ |
186,772 |
|
|
$ |
- |
|
|
$ |
186,772 |
|
|
|
Selling,
general, and administrative expenses |
|
174,274 |
|
|
|
5,217 |
|
1 |
|
169,057 |
|
|
|
Operating
income (loss) |
|
13,271 |
|
|
|
(5,217 |
) |
|
|
18,488 |
|
|
|
Income
(loss) before income taxes |
|
13,512 |
|
|
|
(5,217 |
) |
|
|
18,729 |
|
|
|
Income tax
expense (benefit) |
|
3,819 |
|
|
|
(1,247 |
) |
2 |
|
5,066 |
|
|
|
Net income
(loss) |
|
9,693 |
|
|
|
(3,970 |
) |
|
|
13,663 |
|
|
|
Less: Net
loss attributable to redeemable noncontrolling interest |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
Net income
(loss) attributable to Vera Bradley, Inc. |
|
9,693 |
|
|
|
(3,970 |
) |
|
|
13,663 |
|
|
|
Diluted net
income (loss) per share available to Vera Bradley, Inc. common
shareholders |
$ |
0.31 |
|
|
$ |
(0.13 |
) |
|
$ |
0.44 |
|
|
|
|
|
|
|
|
|
|
|
Vera Bradley
Direct segment operating income (loss) |
$ |
43,669 |
|
|
$ |
(342 |
) |
3 |
$ |
44,011 |
|
|
|
Vera Bradley
Indirect segment operating income |
$ |
19,877 |
|
|
$ |
- |
|
|
$ |
19,877 |
|
|
|
Pura Vida
segment operating income (loss) |
$ |
4,982 |
|
|
$ |
(2,266 |
) |
4 |
$ |
7,248 |
|
|
|
Unallocated
corporate expenses |
$ |
(55,257 |
) |
|
$ |
(2,609 |
) |
5 |
$ |
(52,648 |
) |
|
|
|
|
|
|
|
|
|
|
1Items include $2,372
for severance charges; $2,187 for the amortization of
definite-lived intangible assets; and $658 for certain professional
fees and consulting fees associated with strategic initiatives |
|
|
2Related to the tax
impact of the items mentioned above |
|
|
3Related to severance
charges |
|
|
4Related to $2,187 for
the amortization of definite-lived intangible assets and $79 for
severance charges |
|
|
5Items include $1,951
for severance charges and $658 associated with certain professional
fees and consulting fees for strategic initiatives |
|
|
|
|
|
|
|
|
|
|
|
|
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 (NASDAQ:VRA)
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From Apr 2024 to May 2024
Vera Bradley (NASDAQ:VRA)
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From May 2023 to May 2024