Vera Bradley Q3 revenues decline
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For the nine months ended November 1, 2014, net revenues from continuing operations totaled 356.4 million dollars, compared to 374.5 million dollars in the prior year nine months. Income from continuing operations totaled 23.5 million dollars, or 0.58 dollars per diluted share, for the current year nine month period compared to 40.2 million dollars, or 0.99 dollars per diluted share, in the comparable prior year period.
Commenting on the results, Robert Wallstrom, Chief Executive Officer, noted, “We exceeded our earnings per share guidance for the quarter. Our third quarter revenues and gross margin rate were in the mid-range of our guidance; SG&A was favorable to our expectations due to expense control and the timing of certain expenses that will be incurred in the fourth quarter.”
In June 2014, the company entered into a five-year agreement with Mitsubishi Corporation Fashion Company and Look to import and distribute Vera Bradley products in Japan. As a result of moving to this wholesale business model, the company exited its direct business in Japan during the third quarter of fiscal 2015 and is accounting for it as a discontinued operation.
Current year third quarter direct segment revenues increased 15.1 percent. In the company's stores, third quarter year-over-year net revenues grew 10.4 percent, reflecting the opening of 11 full-line and 12 factory outlet stores during the past 12 months. Comparable sales including e-commerce increased 0.9 percent for the quarter reflecting a 13.5 percent decline in comparable store sales and a 22.2 percent increase in e-commerce sales.
Indirect segment revenues decreased 22.8 percent, primarily due to lower orders from the company's specialty retail accounts as well as a reduction in the number of specialty retail accounts. Gross profit from continuing operations for the quarter totaled 65.8 million dollars, or 52.5 percent of net revenues, compared to 71.2 million dollars, or 55.2 percent of net revenues, in the prior year third quarter.
For the fourth quarter of fiscal 2015, on a continuing operations basis, the company expects, net revenues to be in the range of 158 million dollars to 163 million dollars compared to prior year fourth quarter revenues of 156.4 million dollars. The gross margin rate to range from 53.5 percent to 54.5 percent compared to 52.8 percent in the prior year fourth quarter. Diluted earnings per share from continuing operations are expected to be in the range of 0.43 dollars to 0.47 dollars. For fiscal 2015, on a continuing operations basis, the company expects net revenues to be in the range of 514 million dollars to 520 million dollars compared to 530.9 million dollars last year and diluted earnings per share from continuing operations to be in the range of 1 dollar to 1.05 dollars.