Vera Bradley Announces First Quarter Fiscal Year 2026 Results
- Strong liquidity position with $86 million and no debt
- Implementation of cost reduction initiatives resulting in decreased SG&A expenses
- Strategic divestment of Pura Vida completed, allowing focus on core business
- Significant revenue decline with net revenues down 23.9% YoY to $51.7M
- Widening net loss to $18.3M from $7.6M in prior year
- Comparable sales declined 25% driven by traffic and conversion drops
- Gross profit margin deteriorated to 44.1% from 50.1% YoY
- Suspension of forward guidance due to uncertainty
Insights
Vera Bradley posted concerning Q1 results with revenue down 24%, wider losses, and suspended guidance amid leadership changes.
Vera Bradley's Q1 FY2026 results reveal significant operational challenges with consolidated net revenues falling 24% to
The Direct segment, which includes retail stores and e-commerce, performed particularly poorly with a
Gross margin deteriorated significantly to
The one positive aspect is the company's balance sheet, which remains relatively stable with
The sale of Pura Vida, completed on March 31, marks a significant strategic shift as the company narrows its focus to the core Vera Bradley brand. CEO Jackie Ardrey's acknowledgment that there is "significant work to be done on many fronts" to return to stable growth indicates a challenging turnaround effort ahead, primarily focused on addressing product style and functionality issues from last summer's relaunch and diversifying wholesale partnerships.
First quarter consolidated net revenues totaled
Financial condition remains strong with
FORT WAYNE, Ind., June 11, 2025 (GLOBE NEWSWIRE) -- Vera Bradley, Inc. (Nasdaq: VRA) (the “Company”) today announced its financial results for the first quarter of the fiscal year ending January 31, 2026 (“Fiscal 2026”).
First Quarter Comments
Jackie Ardrey, Chief Executive Officer commented, “Our first quarter results were disappointing as top line and profitability trends from the previous several quarters continued. In addition to addressing consumer feedback on product styles and functionality from last summer’s relaunch, we remain committed to 'being where she shops' and are working on diversification of our wholesale partnerships. While there is significant work to be done on many fronts in order to return the Company’s results to a stable and positive growth story, the teams are committed to doing just that.”
Summary of Financial Performance for the First Quarter
Consolidated net revenues from continuing operations totaled
For the current year first quarter, Vera Bradley, Inc.'s net loss from continuing operations totaled (
For the prior year first quarter, Vera Bradley, Inc.’s net loss from continuing operations totaled (
On March 11, 2025, the Company entered into an Interest Purchase Agreement (the “Agreement”) to sell one hundred percent (
Following the sale, Pura Vida is no longer included in the Company’s consolidated financial results.
First Quarter Details
Current year first quarter Vera Bradley Direct segment revenues totaled
Vera Bradley Indirect segment revenues totaled
First quarter gross profit totaled
First quarter consolidated selling, general, and administrative (“SG&A”) expense totaled
The Company’s first quarter operating loss from continuing operations totaled (
By segment:
- Vera Bradley Direct operating loss was (
$5.5) million , or (12.9% ) of Direct net revenues, compared to operating income of$4.0 million , or7.1% of Direct net revenues, in the prior year. On a non-GAAP basis, Direct operating loss totaled ($2.8) million , or (6.6% ) of Direct revenues, compared to$4.9 million , or8.6% of Direct net revenues, in the prior year. - Vera Bradley Indirect operating income was
$2.0 million , or23.1% of Indirect net revenues, compared to$3.8 million , or33.2% of Indirect net revenues, in the prior year. On a non-GAAP basis, Indirect operating income totaled$2.2 million , or26.1% of Indirect net revenues, compared to$3.8 million , or33.2% of Indirect net revenues, in the prior year.
Balance Sheet
Cash and cash equivalents as of May 3, 2025 totaled
Total quarter-end inventory was
Net capital spending for the first quarter totaled
Forward Outlook
The Company today announced several executive and Board leadership changes (disclosed via separate press release). Given these changes as well as significant uncertainty surrounding the consumer environment, the Company is suspending its forward guidance to allow the new team time to provide input on future strategic and financial expectations.
Disclosure Regarding Non-GAAP Measures
Non-GAAP Numbers
The current year non-GAAP first quarter income statement numbers referenced below exclude the previously outlined charges for property, plant, & equipment impairment charges; PO cancellation fees; professional fees associated with the sale of Pura Vida; consulting and professional fees associated with strategic initiatives and shareholder matters; severance charges inventory write-offs associated with the sale of Pura Vida; and the income tax effect related to these items. The prior year non-GAAP first quarter income statement numbers referenced below exclude the previously outlined charges for one-time vendor charges, severance charges, consulting and professional fees primarily associated with strategic initiatives, and the income tax effect related to these items.
The Company's management does not, nor does it suggest that investors should, consider the supplemental non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Further, the non-GAAP measures utilized by the Company may be unique to the Company, as they may be different from non-GAAP measures used by other companies.
The Company believes that the non-GAAP measures presented in this earnings release, including cash usage; gross profit; selling, general, and administrative expenses; operating loss from continuing operations; net loss from continuing operations; and diluted net loss per share from continuing operations, along with the associated percentages of net revenues, are helpful to investors because they allow for a more direct comparison of the Company’s year-over-year performance and are consistent with management’s evaluation of business performance. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures can be found in the Company’s supplemental schedules included in this earnings release.
Consistent with SEC regulations, the Company has not provided a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures in reliance on the "unreasonable efforts" exception set forth in the applicable regulations, because there is substantial uncertainty associated with predicting any future adjustments the Company may make to its GAAP financial measures in calculating non-GAAP financial measures.
Call Information
A conference call to discuss results for the first quarter is scheduled for today, Wednesday, June 11, 2025, at 9:30 a.m. Eastern Time. A broadcast of the call will be available via Vera Bradley’s Investor Relations section of its website, www.verabradley.com. Alternatively, interested parties may dial into the call at (877) 407-0779, and enter the access code 13753733. A replay will be available shortly after the call and through June 25, 2025. To access the recording, listeners should dial (844) 512-2921, and enter the access code 13753733.
About Vera Bradley, Inc.
Vera Bradley, based in Fort Wayne, Indiana, is a leading designer of women’s handbags, luggage and other travel items, fashion and home accessories, and unique gifts. Founded in 1982 by friends Barbara Bradley Baekgaard and Patricia R. Miller, the brand is known for its innovative designs, iconic patterns, and brilliant colors that inspire and connect women unlike any other brand in the global marketplace.
The Company has two reportable segments: Vera Bradley Direct (“VB Direct”) and Vera Bradley Indirect (“VB Indirect). The VB Direct business consists of sales of Vera Bradley products through Vera Bradley Full-Line and Outlet stores in the United States; Vera Bradley’s websites, www.verabradley.com, outlet.verabradley.com, and international.verabradley.com; and the Vera Bradley annual outlet sale in Fort Wayne, Indiana. The VB Indirect business consists of sales of Vera Bradley products to approximately 1,200 specialty retail locations throughout the United States, as well as select department stores, national accounts, third party e-commerce sites, and third-party inventory liquidators, and royalties recognized through licensing agreements related to the Vera Bradley brand.
Website Information
We routinely post important information for investors on our website www.verabradley.com in the "Investor Relations" section. We intend to use this webpage as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investor Relations section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our webpage is not incorporated by reference into, and is not a part of, this document.
Investors and other interested parties may also access the Company’s most recent Corporate Responsibility and Sustainability Report outlining its ESG (Environmental, Social, and Governance) initiatives at https://verabradley.com/pages/corporate-responsibility.
Vera Bradley Safe Harbor Statement
Certain statements in this release are "forward-looking statements" made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the Company's current expectations or beliefs concerning future events and are subject to various risks and uncertainties that may cause actual results to differ materially from those that we expected, including: possible adverse changes in general economic conditions and their impact on consumer confidence and spending; possible inability to predict and respond in a timely manner to changes in consumer demand; possible loss of key management or design associates or inability to attract and retain the talent required for our business; possible inability to maintain and enhance our brands; possible inability to successfully implement the Company’s long-term strategic plan; possible inability to successfully open new stores, close targeted stores, and/or operate current stores as planned; incremental tariffs or adverse changes in the cost of raw materials and labor used to manufacture our products; possible adverse effects resulting from a significant disruption in our distribution facilities; or business disruption caused by pandemics or other macro factors. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended February 1, 2025. We undertake no obligation to publicly update or revise any forward-looking statement. Financial schedules are attached to this release.
| Vera Bradley, Inc. Condensed Consolidated Balance Sheets (in thousands) | ||||||||||||
| (unaudited) | ||||||||||||
| May 3, 2025 | February 1, 2025 | May 4, 2024 | ||||||||||
| Assets | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 11,281 | $ | 28,628 | $ | 43,810 | ||||||
| Accounts receivable, net | 14,588 | 13,797 | 14,405 | |||||||||
| Inventories | 99,151 | 91,430 | 101,836 | |||||||||
| Short-term contingent consideration | 1,374 | — | — | |||||||||
| Income taxes receivable | 323 | 584 | 3,698 | |||||||||
| Prepaid expenses and other current assets | 8,829 | 8,072 | 14,312 | |||||||||
| Current assets of discontinued operations | — | 22,361 | 40,369 | |||||||||
| Total current assets | 135,546 | 164,872 | 218,430 | |||||||||
| Operating right-of-use assets | 71,236 | 74,841 | 60,539 | |||||||||
| Property, plant, and equipment, net | 51,193 | 52,555 | 51,390 | |||||||||
| Long-term contingent consideration | 1,178 | — | — | |||||||||
| Deferred income taxes | — | — | 4,866 | |||||||||
| Other assets | 8,787 | 9,048 | 5,898 | |||||||||
| Long-term assets of discontinued operations | — | 5,374 | 27,566 | |||||||||
| Total assets | $ | 267,940 | $ | 306,690 | $ | 368,689 | ||||||
| Liabilities and Shareholders’ Equity | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable | $ | 23,221 | $ | 17,198 | $ | 20,339 | ||||||
| Accrued employment costs | 6,033 | 6,527 | 8,133 | |||||||||
| Short-term operating lease liabilities | 18,556 | 19,024 | 17,383 | |||||||||
| Other accrued liabilities | 11,634 | 9,221 | 11,514 | |||||||||
| Income taxes payable | 59 | — | — | |||||||||
| Current liabilities of discontinued operations | — | 6,023 | 5,631 | |||||||||
| Total current liabilities | 59,503 | 57,993 | 63,000 | |||||||||
| Long-term operating lease liabilities | 62,357 | 66,307 | 55,944 | |||||||||
| Other long-term liabilities | 46 | 47 | 42 | |||||||||
| Long-term liabilities of discontinued operations | — | 3,388 | 3,787 | |||||||||
| Total liabilities | 121,906 | 127,735 | 122,773 | |||||||||
| Shareholders’ equity: | ||||||||||||
| Additional paid-in-capital | 116,098 | 115,515 | 113,038 | |||||||||
| Retained earnings | 186,819 | 220,279 | 274,346 | |||||||||
| Accumulated other comprehensive loss | (63 | ) | (19 | ) | (64 | ) | ||||||
| Treasury stock | (156,820 | ) | (156,820 | ) | (141,404 | ) | ||||||
| Total shareholders’ equity | 146,034 | 178,955 | 245,916 | |||||||||
| Total liabilities and shareholders’ equity | $ | 267,940 | $ | 306,690 | $ | 368,689 | ||||||
| Vera Bradley, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | ||||||||
| (unaudited) | ||||||||
| Thirteen Weeks Ended | ||||||||
| May 3, 2025 | May 4, 2024 | |||||||
| Net revenues | $ | 51,652 | $ | 67,948 | ||||
| Cost of sales | 28,885 | 33,908 | ||||||
| Gross profit | 22,767 | 34,040 | ||||||
| Selling, general, and administrative expenses | 40,804 | 45,095 | ||||||
| Other income, net | 180 | 438 | ||||||
| Operating loss from continuing operations | (17,857 | ) | (10,617 | ) | ||||
| Interest income, net | 4 | 470 | ||||||
| Loss from continuing operations before income taxes | (17,853 | ) | (10,147 | ) | ||||
| Income tax expense (benefit) | 407 | (2,543 | ) | |||||
| Net loss from continuing operations | $ | (18,260 | ) | $ | (7,604 | ) | ||
| Loss from discontinued operations, net of income tax | (15,200 | ) | (517 | ) | ||||
| Net loss | $ | (33,460 | ) | $ | (8,121 | ) | ||
| Basic weighted-average shares outstanding | 27,773 | 30,660 | ||||||
| Diluted weighted-average shares outstanding | 27,773 | 30,660 | ||||||
| Basic net loss per share: | ||||||||
| Continuing operations | $ | (0.66 | ) | $ | (0.25 | ) | ||
| Discontinued operations | $ | (0.54 | ) | $ | (0.01 | ) | ||
| Basic net loss per share | $ | (1.20 | ) | $ | (0.26 | ) | ||
| Diluted net loss per share: | ||||||||
| Continuing operations | $ | (0.66 | ) | $ | (0.25 | ) | ||
| Discontinued operations | $ | (0.54 | ) | $ | (0.01 | ) | ||
| Diluted net loss per share | $ | (1.20 | ) | $ | (0.26 | ) | ||
| Vera Bradley, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) | ||||||||
| (unaudited) | ||||||||
| Thirteen Weeks Ended | ||||||||
| May 3, 2025 | May 4, 2024 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | (33,460 | ) | $ | (8,121 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation of property, plant, and equipment | 2,188 | 1,935 | ||||||
| Amortization of operating right-of-use assets | 5,328 | 4,689 | ||||||
| Impairment charges | 1,048 | — | ||||||
| Amortization of intangible assets | — | 729 | ||||||
| Provision for doubtful accounts | — | 31 | ||||||
| Stock-based compensation | 754 | 804 | ||||||
| Deferred income taxes | — | 409 | ||||||
| Loss on sale of business | 15,200 | — | ||||||
| Other non-cash (gain) loss, net | 14 | 14 | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (1,405 | ) | (792 | ) | ||||
| Inventories | (7,379 | ) | (6,902 | ) | ||||
| Prepaid expenses and other assets | (733 | ) | (3,259 | ) | ||||
| Accounts payable | 4,314 | 7,589 | ||||||
| Income taxes | 320 | (4,040 | ) | |||||
| Operating lease liabilities, net | (6,060 | ) | (5,736 | ) | ||||
| Accrued and other liabilities | 1,969 | (1,899 | ) | |||||
| Net cash used in operating activities | (17,902 | ) | (14,549 | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchases of property, plant, and equipment | (1,871 | ) | (863 | ) | ||||
| Proceed from sale of business, net of cash disposed | 903 | — | ||||||
| Net cash used in investing activities | (968 | ) | (863 | ) | ||||
| Cash flows from financing activities | ||||||||
| Tax withholdings for equity compensation | (171 | ) | (356 | ) | ||||
| Repurchase of common stock | — | (6,348 | ) | |||||
| Borrowings under asset-based revolving credit agreement | (5,000 | ) | — | |||||
| Repayment of borrowings under asset-based revolving credit agreement | 5,000 | — | ||||||
| Net cash used in financing activities | (171 | ) | (6,704 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | (44 | ) | 8 | |||||
| Net decrease in cash and cash equivalents | $ | (19,085 | ) | $ | (22,108 | ) | ||
| Cash and cash equivalents, beginning of period | 30,366 | 77,303 | ||||||
| Cash and cash equivalents, end of period | $ | 11,281 | $ | 55,195 | ||||
| Vera Bradley, Inc. First Quarter Fiscal 2026 GAAP to Non-GAAP Reconciliation Thirteen Weeks Ended May 3, 2025 (in thousands, except per share amounts) | |||
| (unaudited) | |||
| Thirteen Weeks Ended | |||
| Net loss from continuing operations | $ | (18,260 | ) |
| PPE impairment charges(1) | 1,048 | ||
| PO cancellation fees(2) | 986 | ||
| Professional fees associated with sale of Pura Vida(1) | 976 | ||
| Consulting and professional fees(3) | 721 | ||
| Severance(1) | 290 | ||
| Inventory write-off associated with sale of Pura Vida(2) | 250 | ||
| Income tax adjustments(4) | 3,938 | ||
| Net loss from continuing operations - Non-GAAP | (10,051 | ) | |
| Diluted net loss per share from continuing operations - Non-GAAP | $ | (0.36 | ) |
| (1)Recorded in selling, general, and administrative ("SG&A") expenses | |||
| (2)Recorded in cost of goods sold | |||
| (3) | |||
| (4)Adjustment reflects the non-GAAP tax benefit the Company would have recognized based on the application of the statutory tax rate of | |||
| Thirteen Weeks Ended | ||||||||||||||
| Vera Bradley Direct | Vera Bradley Indirect | Unallocated Corporate Expenses | Total | |||||||||||
| Operating (loss) income from continuing operations | $ | (5,536 | ) | 1,980 | $ | (14,301 | ) | $ | (17,857 | ) | ||||
| PPE Impairment charges | 1,048 | — | — | 1,048 | ||||||||||
| PO cancellation fees | 847 | 139 | — | 986 | ||||||||||
| Professional fees associated with sale of Pura Vida | — | — | 976 | 976 | ||||||||||
| Consulting and professional fees | 584 | 78 | 59 | 721 | ||||||||||
| Severance | 15 | — | 275 | 290 | ||||||||||
| Inventory write-off associated with sale of Pura Vida | 214 | 36 | — | 250 | ||||||||||
| Operating (loss) income from continuing operations - Non-GAAP | $ | (2,828 | ) | $ | 2,233 | $ | (12,991 | ) | $ | (13,586 | ) | |||
| Vera Bradley, Inc. First Quarter Fiscal 2025 GAAP to Non-GAAP Reconciliation Thirteen Weeks Ended May 4, 2024 (in thousands, except per share amounts) | |||
| (unaudited) | |||
| Thirteen Weeks Ended | |||
| Net loss from continuing operations | $ | (7,604 | ) |
| One-time vendor charges(1) | 747 | ||
| Severance(2) | 436 | ||
| Consulting and professional fees(3) | 38 | ||
| Income tax adjustments(4) | (222 | ) | |
| Net loss from continuing operations - Non-GAAP | (6,605 | ) | |
| Diluted net loss per share from continuing operations - Non-GAAP | $ | (0.22 | ) |
| (1)Recorded in cost of goods sold | |||
| (2) | |||
| (3)Recorded in SG&A expenses | |||
| (4)Adjusted net loss from continuing operations and adjusted diluted EPS are calculated using a statutory tax rate of | |||
| Thirteen Weeks Ended | |||||||||||||
| Vera Bradley Direct | Vera Bradley Indirect | Unallocated Corporate Expenses | Total | ||||||||||
| Operating (loss) income from continuing operations | $ | 3,993 | 3,826 | $ | (18,436 | ) | $ | (10,617 | ) | ||||
| One-time vendor charges | 747 | — | — | 747 | |||||||||
| Severance | 135 | 8 | 293 | 436 | |||||||||
| Consulting and professional fees | — | — | 38 | 38 | |||||||||
| Operating (loss) income from continuing operations - Non-GAAP | $ | 4,875 | $ | 3,834 | $ | (18,105 | ) | $ | (9,396 | ) | |||
CONTACTS: Investors: Tom Filandro, Partner ICR, Inc VeraBradleyIR@icrinc.com Media: mediacontact@verabradley.com 877-708-VERA (8372)
FAQ
What were Vera Bradley's (VRA) Q1 2026 earnings results?
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