Vera Bradley Reports Decline in Financial Performance for 13 and 26 Weeks Ended August 3, 2024

Vera Bradley, Inc. reported a decline in financial performance for the thirteen and twenty-six weeks ended August 3, 2024, compared to the same periods in the previous fiscal year. Total net revenues for the thirteen weeks decreased by 13.5% to $110.8 million from $128.2 million, while for the twenty-six weeks, revenues fell by 14.0% to $191.4 million from $222.5 million. The decline in revenue was primarily attributed to decreased traffic and lower average transaction sizes in the VB Direct segment, which saw a 15.7% drop in revenues to $72.2 million. Conversely, the VB Indirect segment experienced a 25.3% increase in revenues, driven by liquidation orders and increased key account orders.

Gross profit for the thirteen weeks ended August 3, 2024, was $56.4 million, down 21.7% from $72.0 million in the prior year, with gross margin decreasing to 50.9% from 56.2%. For the twenty-six weeks, gross profit decreased by 20.6% to $98.3 million. Operating income for the thirteen weeks fell sharply by 77.7% to $2.9 million, while the company reported an operating loss of $8.6 million for the twenty-six weeks, a significant decline from the previous year’s operating income of $6.5 million.

Net income for the thirteen weeks was $5.7 million, down from $9.3 million, while the company reported a net loss of $2.4 million for the twenty-six weeks, compared to a net income of $4.6 million in the prior year. The effective tax rate for the thirteen weeks was (77.5)%, influenced by adjustments in income projections and non-deductible executive compensation.

Vera Bradley's strategic developments included the acquisition of the remaining 25% interest in Pura Vida on January 30, 2023, which now operates as a wholly-owned subsidiary. The company is also implementing "Project Restoration," aimed at improving consumer engagement and operational efficiencies. However, the company faced challenges from inflationary pressures and higher tariffs, which have impacted consumer discretionary spending.

As of August 3, 2024, cash and cash equivalents stood at $44.1 million, a decrease from $77.3 million as of February 3, 2024. Total current liabilities increased to $78.3 million from $58.3 million, contributing to a rise in total liabilities to $136.7 million from $120.9 million. The company has no outstanding debt and has access to a $75 million revolving credit facility.