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Vera Bradley Announces First Quarter Fiscal 2020 Results
First quarter net revenues up 5.1% to $91.0 million, at the high end of guidance; comparable sales grew 5.2% for the quarter Company ended the quarter with strong cash and investment position of $144.2 million and no debt Management provides guidance for second quarter and updated guidance for fiscal year ending February 1, 2020; management continues to see potential for double-digit diluted EPS growth for the year FORT WAYNE, Ind., June 05, 2019 (GLOBE NEWSWIRE) -- Vera Bradley, Inc. (Nasdaq: VRA) (“Vera Bradley” or the “Company”) today announced its financial results for the first quarter ended May 4, 2019. Summary of Financial Performance for the First Quarter Net revenues totaled $91.0 million for the current year first quarter, a 5.1% increase over $86.6 million in the prior year first quarter. Revenues were at the high end of the Company’s guidance range of $86 to $91 million. Comparable sales increased 5.2% for the quarter. For the current year first quarter, the Company posted a net loss of ($2.4) million, or ($0.07) per diluted share, which was in line with the Company’s guidance range of a diluted loss per share of ($0.06) to ($0.08). The Company recorded a loss of ($1.4) million, or ($0.04) per diluted share in the prior year first quarter. Robert Wallstrom, Chief Executive Officer, said, “We are pleased with our 5.2% first quarter comparable sales increase and that revenues were once again at the high end of our guidance, indicating that our customers are responding to both our innovative product and targeted consumer engagement efforts.” Vision 20/20 – Year 2 “The first stage of Vision 20/20 was to restore brand and Company health, and we continue to build upon the progress we made in Fiscal 2019. We once again improved the quality of sales in our full-line stores and on verabradley.com by increasing comparable full price selling in these two channels by approximately 20%. “Moving into Year 2 of our three-year journey, we are focused on expanding our customer base and increasing sales and profitability,” Wallstrom concluded. “Our key areas of focus for Fiscal 2020 are:
First Quarter Details Current year first quarter Direct segment revenues totaled $71.1 million, an 8.6% increase over $65.5 million in the prior year first quarter. Comparable sales (including e-commerce) increased 5.2% for the quarter (reflecting a 4.0% increase in comparable store sales and a 9.2% increase in e-commerce sales). The Company closed eight full-line stores and opened seven factory outlet stores in the last twelve months. Indirect segment revenues decreased 5.7% to $19.9 million from $21.1 million in the prior year first quarter, reflecting a reduction in orders and the number of specialty accounts. Gross profit for the quarter totaled $50.5 million, or 55.5% of net revenues, compared to $48.6 million, or 56.1% of net revenues, in the prior year first quarter. The gross profit percentage was within the guidance range of 55.2% to 55.7%. As expected, improvement in full-price selling and sourcing and operational efficiencies were more than offset by the impact of Chinese tariffs, causing the year-over-year 60 basis point gross profit decline. SG&A expense totaled $54.3 million, or 59.7% of net revenues, in the current year first quarter, compared to $50.7 million, or 58.6% of net revenues, in the prior year first quarter. SG&A expenses were higher than the prior year primarily due to expenses related to new factory store openings, consulting fees, the timing of certain marketing expenses planned for the second quarter, and variable expenses to drive revenues. First quarter SG&A expenses were above the guidance range of $52.5 to $53.5 million primarily due to consulting fees, variable expenses to drive revenues, and the timing of certain marketing expenses. The Company’s operating loss totaled ($3.6) million, or (4.0%) of net revenues, in the current year first quarter, compared to an operating loss of ($1.9) million, or (2.2%) of net revenues, in the prior year first quarter. By segment, Direct operating income was $8.4 million, or 11.8% of Direct net revenues, for the first quarter, compared to $7.3 million, or 11.1% of Direct net revenues, in the prior year first quarter. Indirect operating income was $7.7 million, or 38.8% of Indirect net revenues, for the first quarter, compared to $8.3 million, or 39.3% of Indirect net revenues, in the prior year first quarter. Balance Sheet Net capital spending for the quarter totaled $3.4 million. During the first quarter, the Company repurchased approximately $2.9 million of its common stock (approximately 284,000 shares at an average price of $10.24). As of the end of the first quarter, the Company had approximately $44.3 million remaining under its $50 million share repurchase authorization. Cash, cash equivalents, and investments as of May 4, 2019 totaled $144.2 million compared to $132.3 million at the end of last year’s first quarter. The Company had no debt outstanding at quarter end. Quarter-end inventory was $90.1 million compared to $86.2 million at the end of the first quarter last year and within management’s guidance range of $85 to $95 million. For the second quarter of Fiscal 2020, the Company expects:
For Fiscal 2020, the Company has updated its expectations as follows:
All forward-looking guidance outlined above is non-GAAP. Call Information A conference call to discuss results for the first quarter is scheduled for today, Wednesday, June 5, 2019, 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 (800) 458-4121, and enter the access code 9886252. A replay will be available shortly after the conclusion of the call and remain available through June 19, 2019. To access the recording, listeners should dial (844) 512-2921, and enter the access code 9886252. About Vera Bradley Vera Bradley is a leading designer of women’s handbags, luggage and travel items, fashion and home accessories, and unique gifts. Founded in 1982 by friends Barbara Bradley Baekgaard and Patricia R. Miller, the brand’s innovative designs, iconic patterns, and brilliant colors continue to inspire and connect women unlike any other brand in the global marketplace. Vera Bradley offers a multi-channel sales model as well as a focus on service and a high level of customer engagement. The Company sells its products through two reportable segments: Direct and Indirect. The Direct business consists of sales of Vera Bradley products through the Company’s full-line and factory outlet stores in the United States, verabradley.com, the Company’s online outlet site, and its annual outlet sale in Fort Wayne, Indiana. The Indirect business consists of sales of Vera Bradley products to approximately 2,200 specialty retail locations, substantially all of which are located in the United States, as well as select department stores, national accounts, third party e-commerce sites, third-party inventory liquidators, and royalties recognized through licensing agreements. The Company’s commitment to bringing more beauty into women’s lives includes its dedication to breast cancer research through the Vera Bradley Foundation for Breast Cancer. 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. 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 brand; possible inability to successfully implement Vision 20/20; possible inability to successfully implement our 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; and possible adverse effects resulting from a significant disruption in our single distribution facility. 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 2, 2019. We undertake no obligation to publicly update or revise any forward-looking statement. Financial schedules are attached to this release. CONTACTS: Media:
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