{"id":780963,"date":"2023-08-30T10:08:06","date_gmt":"2023-08-30T14:08:06","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/vera-bradley-announces-second-quarter-fiscal-year-2024-results\/"},"modified":"2023-08-30T10:08:06","modified_gmt":"2023-08-30T14:08:06","slug":"vera-bradley-announces-second-quarter-fiscal-year-2024-results","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/vera-bradley-announces-second-quarter-fiscal-year-2024-results\/","title":{"rendered":"Vera Bradley Announces Second Quarter Fiscal Year 2024 Results"},"content":{"rendered":"
\n

\n Consolidated net revenues totaled $128.2 million<\/em>
\n \n <\/p>\n

\n Net income totaled $9.3 million, or $0.30 per diluted share;\u00a0<\/em>
\n non-GAAP net income totaled $10.2 million, or $0.33 per diluted share <\/em>\n <\/p>\n

\n Balance sheet strengthens, with cash and cash equivalents of $48.5 million, no debt, and year-over-year inventories down 22.4% <\/em>\n <\/p>\n

FORT WAYNE, Ind., Aug. 30, 2023 (GLOBE NEWSWIRE) — Vera Bradley, Inc. (Nasdaq: VRA) today announced its financial results for the second quarter and six months ended July 29, 2023.<\/p>\n

In this release, Vera Bradley, Inc. or \u201cthe Company\u201d 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.<\/p>\n

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\n Second Quarter Comments <\/u>
\n <\/strong>\n <\/p>\n

Jackie Ardrey, Chief Executive Officer of the Company, noted, \u201cOur transformational efforts continue to bear fruit and are the result of the hard work of our associates across the country. We are very pleased with the meaningful year-over-year improvement in second quarter earnings, driven by significant gross margin expansion and successful expense reduction efforts. During the quarter, we carefully managed our debt-free balance sheet, adding to our cash position while continuing to strategically improve our inventory position.<\/p>\n

\u201cOne of our key goals this year is to stabilize revenues. We continue to make progress on that front, with second quarter consolidated revenues of $128.2 million only modestly below last year.\u201d\u00a0<\/p>\n

\u201cTotal second quarter revenues for the Vera Bradley brand were down 1.2% from last year,\u201d Ardrey commented. \u201cVera Bradley Direct revenue declines resulted from store closures over the last year, while we saw a small comparable store gain in our full line stores. The successful return of the Vera Bradley Annual Outlet Sale offset weakness we experienced in our factory outlet stores in addition to compensating for the elimination of one online outlet sale during the quarter. The remainder of our e-commerce sales continued to perform well. Lastly, Vera Bradley Indirect revenues were up slightly to last year.<\/p>\n

\u201cPura Vida year-over-year sales declined 3.6%, primarily related to a shortfall in wholesale revenues, which we believe will improve in the second half of the year. Store sales remained strong, and we began to realize the benefits of changes in our performance-based marketing program.\u00a0<\/p>\n

\u201cIn general, at both brands, customers have responded enthusiastically to our collaborations and to our product offerings when they are innovative and trend-right, even as they have been more selective in their discretionary spending in light of the current macro environment.\u201d<\/p>\n

Ardrey continued, \u201cWe are taking strategic actions to stabilize and steadily grow Pura Vida\u2019s revenues and to reverse the trends in Vera Bradley\u2019s factory outlet stores through a thorough, multi-pronged approach, including potential pricing adjustments and targeted marketing initiatives aimed to drive traffic and average order size. Our team is focused on generating long-term revenue increases, expanding gross margin, and ensuring strong financial discipline and cost control, which we expect will drive long-term profitable growth.\u201d<\/p>\n

Ardrey added, \u201cWe continue to make meaningful progress on Project Restoration<\/strong>, focusing on four key pillars of the business for each brand \u2013 Consumer, Brand, Product,<\/strong> and Channel. <\/strong>Through the first half of Fiscal 2024, we have progressed as expected. We anticipate execution of Project Restoration will drive this long-term profitable growth and deliver value to our shareholders.\u201d<\/p>\n

\n
\n Summary of Financial Performance for the Second Quarter<\/u>
\n <\/strong>\n <\/p>\n

Consolidated net revenues totaled $128.2 million compared to $130.4 million in the prior year second quarter ended July 30, 2022.\u00a0<\/p>\n

For the current year second quarter, Vera Bradley, Inc.’s consolidated net income totaled $9.3 million, or $0.30 per diluted share. These results included $0.9 million of net after tax charges, comprised of $0.6 million for the amortization of definite-lived intangible assets, $0.2 million of consulting fees primarily associated with strategic initiatives, and $0.1 million of severance charges. On a non-GAAP basis, Vera Bradley, Inc.\u2019s consolidated second quarter net income totaled $10.2 million, or $0.33 per diluted share.\u00a0<\/p>\n

For the prior year second quarter, Vera Bradley, Inc.\u2019s 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 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.\u2019s prior year consolidated second quarter net income totaled $2.4 million, or $0.08 per diluted share.\u00a0<\/p>\n

\n
\n Summary of Financial Performance for the Six Months<\/u>
\n <\/strong>\n <\/p>\n

Consolidated net revenues totaled $222.5 million for the current year six months ended July 29, 2023, compared to $228.8 million in the prior year six month period ended July 30, 2022.<\/p>\n

For the current year six months, Vera Bradley, Inc.\u2019s consolidated net income totaled $4.6 million, or $0.15 per diluted share. These results included $3.0 million of net after tax charges, comprised of $1.5 million of severance charges, $1.1 million for the amortization of definite-lived intangible assets, and $0.4 million of consulting and professional fees primarily associated with strategic initiatives. On a non-GAAP basis, Vera Bradley, Inc.\u2019s consolidated net income for the six months totaled $7.6 million, or $0.24 per diluted share.\u00a0<\/p>\n

For the prior year six months, Vera Bradley, Inc.\u2019s 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 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.\u2019s prior year consolidated net loss for the six months totaled ($3.6) million, or ($0.11) per diluted share.\u00a0<\/p>\n

\n
\n Non-GAAP Numbers<\/u>
\n <\/strong>\n <\/p>\n

The current year non-GAAP second quarter and six-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 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.<\/p>\n

\n
\n Second Quarter Details<\/u>
\n <\/strong>\n <\/p>\n

Current year second quarter Vera Bradley Direct segment revenues totaled $85.7 million, a 1.5% decrease from $87.0 million in the prior year second quarter. Comparable sales declined 5.3% in the second quarter, primarily driven by weakness in the factory outlet channel. The Company permanently closed 19 full-line and two factory outlet stores and opened three factory outlet stores over the last twelve months. This year, the Direct segment revenues included sales from the Vera Bradley Annual Outlet sale, which was not held last year.\u00a0<\/p>\n

Vera Bradley Indirect segment revenues totaled $17.4 million, a 0.2% increase over $17.3 million in the prior year second quarter.\u00a0<\/p>\n

Pura Vida segment revenues totaled $25.1 million, a 3.6% decrease from $26.0 million in the prior year, reflecting a decline in sales to wholesale accounts and a modest decline in ecommerce sales, partially offset by new store growth resulting in non-comparable retail store sales.<\/p>\n

Second quarter consolidated gross profit totaled $72.0 million, or 56.2% of net revenues, compared to $60.5 million, or 46.4% of net revenues, in the prior year. On a non-GAAP basis, prior year gross profit totaled $67.8 million, or 52.0% 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 and the sell-through of previously-reserved inventory, partially offset by an increase in promotional activity. Prior year gross profit was materially impacted by high inbound and outbound freight expense and deleverage of overhead costs.<\/p>\n

Second quarter consolidated SG&A expense totaled $59.4 million, or 46.3% of net revenues, compared to $74.0 million, or 56.8% of net revenues, in the prior year. On a non-GAAP basis, consolidated SG&A expense totaled $58.3 million, or 45.5% of net revenues, compared to $64.0 million, or 49.1% of net revenues, in the prior year. Vera Bradley\u2019s 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.\u00a0<\/p>\n

The Company\u2019s second quarter consolidated operating income totaled $12.9 million, or 10.0% of net revenues, compared to an operating loss of ($42.8) million, or (32.8%) of net revenues, in the prior year second quarter. On a non-GAAP basis, the Company\u2019s current year consolidated operating income totaled $14.0 million, or 10.9% of net revenues, compared to $3.9 million, or 3.0% of net revenues, in the prior year.\u00a0<\/p>\n

By segment:<\/p>\n