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Vera Bradley Q1 net revenues down but net loss narrows to 1.4 mn dollars

By Prachi Singh

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Business

Vera Bradley, Inc., for the fiscal first quarter ended May 5, 2018 reported net revenues of 86.6 million dollars compared to 96.1 million dollars for the prior year first quarter ended April 29, 2017. The company said, revenues were in line with the company’s guidance range of 84 million to 89 million dollars. The company posted a net loss of 1.4 million dollars or 0.04 dollar per diluted share compared to 4 million dollars or 0.11 dollar per diluted share.

Commenting on first quarter performance and looking ahead Robert Wallstrom, the company’s Chief Executive Officer, said in a statement: “We are pleased that our first quarter results exceeded both expectations and prior year performance, primarily driven by a higher-than-planned gross margin rate, largely due to reduced clearance and improved full-price selling, as well as better-than-expected expense leverage. Revenues were in line with our guidance. A primary goal for fiscal 2019 is to drive brand desirability through product and marketing innovation, and we made substantial progress on these fronts as well.”

Highlights of Vera Bradley’s first quarter results

On a non-GAAP basis, excluding these charges, the company’s net loss totalled 3.2 million dollars or 0.09 dollar per diluted share.

Current year first quarter direct segment revenues totalled 65.5 million dollars, a 4.8 percent decrease from 68.8 million dollars in the prior year first quarter. Comparable sales including e-commerce decreased 8.5 percent for the quarter reflecting a 3.8 percent decline in comparable store sales and a 21 percent decrease in ecommerce sales, which was partially offset by new store growth (the company opened one full-line pop-up and seven factory outlet stores during the past 12 months). Full-price selling in the Company’s full-line stores and on verabradley.com increased in the high-single digit range for the quarter.

Indirect segment revenues decreased 22.9 percent to 21.1 million dollars from 27.3 million dollars in the prior year first quarter, reflecting a reduction in orders from both specialty accounts and certain key accounts.

First quarter gross profit declines to 48.6 mn dollars

Gross profit for the quarter totalled 48.6 million dollars or 56.1 percent of net revenues, compared to 52.7 million dollars or 54.8 percent of net revenues, in the prior year first quarter. The company’s operating loss totalled 1.9 million dollars or 2.2 percent of net revenues, in the current year first quarter, compared to an operating loss of 4.8 million dollars or 5 percent of net revenues, in the prior year first quarter.

On a non-GAAP basis, excluding severance charges, the company’s operating loss totalled 3.5 million dollars or 3.6 percent of net revenues, in the prior year first quarter.

Vera Bradley reveals Q2 and full year outlook

For the second quarter of fiscal 2019, the company expects net revenues of 111 to 116 million dollars compared to prior year second quarter revenues of 112.4 million dollars. This estimate, the company said, reflects the movement of approximately 6 million dollars in revenues to the second quarter this year from the third quarter last year, related to promotional event timing shifts.

A gross profit percentage of flat to slightly down compared to 56.3 percent in the prior year second quarter. The company added that gross profit rate may be down slightly due to promotional event shifts into the second quarter from the third quarter last year. Diluted earnings per share of 0.15 dollar to 0.17 dollar, based on diluted weighted-average shares outstanding of 35.7 million and an effective tax rate of 25 percent. On a non-GAAP basis, excluding charges, adjusted net income totalled 4.6 million dollars or 0.13 dollar per diluted share, in the prior year second quarter.

Net revenues for fiscal 2019 are expected to range between 405 to 422 million dollars compared to 454.6 million dollars in fiscal 2018. A gross profit percentage of 56.3 percent to 56.6 percent is anticipated compared to the adjusted gross profit percentage of 56.1 percent in fiscal 2018. Diluted earnings per share of 0.40 dollar to 0.50 dollar are expected, based on diluted weighted-average shares outstanding of 35.7 million and an effective tax rate of 25 percent. Excluding charges, adjusted diluted earnings per share totalled 0.60 dollar last year.

Picture:Facebook/Vera Bradley

Vera Bradley