Published
May 31, 2017
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Vera Bradley revenues and earnings per share meet expectations on decrease in Q1

Published
May 31, 2017

"Challenges in the retail environment continued into the first quarter,” said Vera Bradley CEO Robert Wallstrom. In the fourth quarter, The women’s fashion and accessories company posted decreases in revenue and net income for the fourth quarter and fiscal year 2016.


Vera Bradley

 
Following the decline, Wallstrom said the company’s transformation is “taking longer than we had originally planned,” and the objectives for 2018 are to drive brand and product desirability and strengthen its distribution network, which includes relocating or closing up to 15 underperforming full-line stores.
 
The Fort Wayne, Indiana-based company posted similar results for the first quarter, though the results were in line with expectations. Net revenues decreased to $96.1 million from $105.2 million in the previous year, with direct segment revenues decreasing 5.6% to $68.8 million, and comparable sales, including e-commerce, decreasing 12.5%

First quarter net loss was $(4.0) million, or $(0.11) per diluted share, compared to net income of $2.4 million, or $0.06 per diluted share, in the prior year. First quarter net income on a non-GAAP basis was $(3.2) million, or $(0.09) per diluted share.
 
"Challenges in the retail environment continued into the first quarter,” said Wallstrom, “although April sales trends did improve over those in February and March. Total revenues were in line with our expectations while our gross profit percentage was slightly below our guidance. Our first quarter net loss per share of $0.09 (excluding severance charges) was better than guidance, primarily due to expense management, the timing of certain expenses, and a lower-than-expected tax rate." 
 
Vera Bradley ended the quarter with no outstanding debt and with $104.4 million in cash, cash equivalents and investments.
 
Operating income was $6.8 million, or 9.9% of sales, compared to $12.1 million, or 16.6% of sales, in the previous year, and gross profit was $52.7 million, or 54.8% of net revenues, compared to $59.7 million, or 56.7% of net revenues, in the prior year’s first quarter.
 
In addition, SG&A expenses were $57.8 million, or 60.1% of net revenues, compared to $56.4 million, or 53.6% of net revenues, in the prior year.
 
Vera Bradley issued its second quarter outlook and expects net revenues to range from $111 million to $115 million, compared to $119.2 million in the prior year’s second quarter, and diluted earnings per share are expected to range from $0.09 to $0.11.
 
For the fiscal year, the company expects net revenues to be in range of $460 million to $480 million, compared to $485.9 million in the prior fiscal year, and diluted earnings per share are projected to be between $0.40 and $0.50.

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