The results continue to be very negative, with the brand tarnished. The quarter was not as bad as in Q1 because of lower PO cancellations andLong-only investment, evaluating companies from an operational, buy-and-hold perspective.Quipus Capital does not focus on market-driven dynamics and future price action. Instead, our articles focus on operational aspects, understanding the long-term earnings power of companies, the competitive dynamics of the industries where they participate, and buying companies that ...

The results continue to be very negative, with the brand tarnished. The quarter was not as bad as in Q1 because of lower PO cancellationsLong-only investment, evaluating companies from an operational, buy-and-hold perspective.Quipus Capital does not focus on market-driven dynamics and future price action. Instead, our articles focus on operational aspects, understanding the long-term earnings power of companies, the competitive dynamics of the industries where they participate, and buying companies that we ...

Core Insights - Vera Bradley, Inc. is a notable player in the retail industry, recognized for its unique patterns and vibrant designs in apparel and accessories, despite facing stiff competition [1] - The company reported an EPS that significantly outperformed market expectations, although it represents a decline from the previous year, indicating ongoing financial challenges [2] - Revenue performance fell short of expectations, with a 9.76% miss from the Zacks Consensus Estimate, highlighting the need for strategic adjustments [3] Financial Performance - Vera Bradley reported an EPS of -$0.02, surpassing the Zacks Consensus Estimate by 86.67% [6] - The company's revenue was approximately $70.9 million, missing the estimated $78.5 million, indicating a need for strategic adjustments [6] - Current market valuation metrics include a negative price-to-earnings (P/E) ratio of -0.64 and a price-to-sales ratio of 0.16, reflecting current challenges [5] Operational Improvements - Despite financial challenges, Vera Bradley is making strides in improving operations, with sequential improvement in comparable store sales both in physical stores and online [4] - The company is focusing on revamping its product design and assortment to drive innovation and growth [4][6] - A strong current ratio of 2.28 suggests that Vera Bradley maintains a solid liquidity position, with more than twice the current assets compared to its current liabilities [5]

[Forward-Looking Statements](index=4&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section outlines forward-looking statements concerning the Company's financial condition and future performance, subject to various risks - This report contains forward-looking statements regarding the Company's financial condition, results of operations, plans, objectives, strategies, future performance, and business, which are subject to risks and uncertainties that may cause actual results to differ materially from expectations[10](index=10&type=chunk)[11](index=11&type=chunk)[13](index=13&type=chunk) - Key risks include the inability to successfully implement strategic plans, declines in comparable sales, inability to maintain brands, failure of the multi-channel distribution model, adverse economic conditions, and supply chain disruptions[14](index=14&type=chunk) Part I. Financial Information This part presents the Company's unaudited condensed consolidated financial statements and management's analysis of operations [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, income statements, cash flows, and detailed notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Key Balance Sheet Data (in thousands) | Metric | August 2, 2025 | February 1, 2025 | | :-------------------------- | :------------- | :--------------- | | Cash and cash equivalents | $15,184 | $28,628 | | Accounts receivable, net | $16,983 | $13,797 | | Inventories | $96,685 | $91,430 | | Total current assets | $140,453 | $164,872 | | Total assets | $266,176 | $306,690 | | Accounts payable | $21,127 | $17,198 | | Total current liabilities | $57,724 | $57,993 | | Long-term debt | $10,000 | — | | Total liabilities | $125,690 | $127,735 | | Total shareholders' equity | $140,486 | $178,955 | - Total assets decreased by **$40.5 million** from February 1, 2025, to August 2, 2025, primarily due to a decrease in cash and cash equivalents and the reclassification of discontinued operations assets. Total shareholders' equity also decreased significantly by **$38.5 million**[16](index=16&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Key Income Statement Data (in thousands, except per share data) | Metric | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | | Net revenues | $70,858 | $94,003 | $122,510 | $161,951 | | Gross profit | $35,497 | $46,709 | $58,264 | $80,749 | | Operating (loss) income from continuing operations | $(4,592) | $2,393 | $(22,449) | $(8,224) | | Net (loss) income | $(4,672) | $5,706 | $(38,132) | $(2,415) | | Diluted net (loss) income per share | $(0.17) | $0.19 | $(1.37) | $(0.08) | - Net revenues decreased by **24.6%** for the thirteen weeks and **24.4%** for the twenty-six weeks ended August 2, 2025, compared to the prior year periods[18](index=18&type=chunk) - The Company reported a net loss of **$(4.7) million** for the thirteen weeks and **$(38.1) million** for the twenty-six weeks ended August 2, 2025, a significant decline from net income of **$5.7 million** and a net loss of **$(2.4) million**, respectively, in the comparable prior-year periods[18](index=18&type=chunk) [Condensed Consolidated Statements of Comprehensive (Loss) Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income) Comprehensive (Loss) Income (in thousands) | Metric | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | | Net (loss) income | $(4,672) | $5,706 | $(38,132) | $(2,415) | | Cumulative translation adjustment | $(64) | $(8) | $(108) | — | | Comprehensive (loss) income, net of tax | $(4,736) | $5,698 | $(38,240) | $(2,415) | - Comprehensive loss significantly widened for both the thirteen and twenty-six-week periods ended August 2, 2025, primarily reflecting the increased net loss and negative cumulative translation adjustments[21](index=21&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Shareholders' Equity Changes (in thousands) | Metric | Balance at Feb 1, 2025 | Net Loss (26 wks) | Balance at Aug 2, 2025 | | :----------------------- | :------------------- | :---------------- | :------------------- | | Total Shareholders' Equity | $178,955 | $(38,132) | $140,486 | - Total shareholders' equity decreased from **$178.9 million** at February 1, 2025, to **$140.5 million** at August 2, 2025, primarily due to the net loss incurred during the period[24](index=24&type=chunk) - In the prior year (twenty-six weeks ended August 3, 2024), treasury stock repurchases of **$15.9 million** significantly reduced shareholders' equity[26](index=26&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (in thousands) | Activity | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :------------------------------------ | :--------------------------------- | :------------------------------- | | Net cash used in operating activities | $(23,298) | $(13,151) | | Net cash used in investing activities | $(1,576) | $(3,649) | | Net cash provided by (used in) financing activities | $9,800 | $(16,356) | | Cash and cash equivalents, end of period | $15,184 | $44,147 | - Net cash used in operating activities increased by **$10.1 million**, primarily due to a higher net loss in the current period[29](index=29&type=chunk)[188](index=188&type=chunk) - Financing activities shifted from a net use of cash of **$16.4 million** in the prior year to a net provision of cash of **$9.8 million** in the current year, driven by **$15.0 million** in borrowings and no common stock repurchases[29](index=29&type=chunk)[191](index=191&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section details the Company's accounting policies, revenue, leases, earnings per share, debt, taxes, stock compensation, and segment reporting [Note 1. Description of the Company and Basis of Presentation](index=12&type=section&id=1.%20Description%20of%20the%20Company%20and%20Basis%20of%20Presentation) - Vera Bradley is a leading designer of women's handbags, luggage, travel items, fashion and home accessories, and unique gifts, founded in 1982[36](index=36&type=chunk) - On March 31, 2025, the Company completed the sale of Creative Genius, Inc. (Pura Vida Bracelets), classifying its operations as discontinued in the consolidated financial statements[37](index=37&type=chunk)[38](index=38&type=chunk)[42](index=42&type=chunk) - The Company now operates with two reportable segments: Vera Bradley Direct (VB Direct), which includes full-line and outlet stores and e-commerce, and Vera Bradley Indirect (VB Indirect), which covers sales to specialty retailers, key accounts, and licensing royalties[38](index=38&type=chunk)[43](index=43&type=chunk) [Note 2. Revenue from Contracts with Customers](index=14&type=section&id=2.%20Revenue%20from%20Contracts%20with%20Customers) Net Revenues by Product Category (in thousands) - Thirteen Weeks Ended | Product Category | August 2, 2025 | August 3, 2024 | Change ($) | Change (%) | | :--------------- | :------------- | :------------- | :--------- | :--------- | | Bags | $36,598 | $45,509 | $(8,911) | -19.6% | | Travel | $16,774 | $21,939 | $(5,165) | -23.5% | | Accessories | $9,372 | $14,396 | $(5,024) | -34.9% | | Home | $3,928 | $6,889 | $(2,961) | -43.0% | | Apparel/Footwear | $1,729 | $2,719 | $(990) | -36.4% | | Other | $2,457 | $2,551 | $(94) | -3.7% | | **Total** | **$70,858** | **$94,003** | **$(23,145)**| **-24.6%** | Net Revenues by Product Category (in thousands) - Twenty-Six Weeks Ended | Product Category | August 2, 2025 | August 3, 2024 | Change ($) | Change (%) | | :--------------- | :------------- | :------------- | :--------- | :--------- | | Bags | $58,262 | $75,582 | $(17,320) | -22.9% | | Travel | $31,261 | $38,007 | $(6,746) | -17.7% | | Accessories | $17,360 | $25,894 | $(8,534) | -33.0% | | Home | $7,697 | $12,538 | $(4,841) | -38.6% | | Apparel/Footwear | $3,366 | $5,498 | $(2,132) | -38.8% | | Other | $4,564 | $4,432 | $132 | +3.0% | | **Total** | **$122,510** | **$161,951** | **$(39,441)**| **-24.4%** | - Contract liabilities, primarily unredeemed gift cards, were **$1.6 million** as of August 2, 2025, a slight decrease from **$1.7 million** at February 1, 2025[58](index=58&type=chunk) [Note 3. Leases](index=16&type=section&id=3.%20Leases) - The weighted-average discount rate for leases increased to **5.1%** as of August 2, 2025, from **4.9%** as of August 3, 2024[63](index=63&type=chunk) Total Net Lease Cost (in thousands) - Twenty-Six Weeks Ended | Lease Cost Type | August 2, 2025 | August 3, 2024 | | :----------------- | :------------- | :------------- | | Operating lease cost | $12,576 | $12,259 | | Variable lease cost | $2,096 | $2,233 | | Short-term lease cost| $195 | $388 | | Less: Sublease income| $(208) | $(210) | | **Total net lease cost** | **$14,659** | **$14,670** | - The weighted-average remaining lease term decreased to **4.4 years** as of August 2, 2025, from **4.9 years** as of August 3, 2024[66](index=66&type=chunk) [Note 4. Earnings Per Share](index=17&type=section&id=4.%20Earnings%20Per%20Share) Basic and Diluted Net (Loss) Income Per Share | Period | August 2, 2025 | August 3, 2024 | | :------------------------------- | :------------- | :------------- | | **Thirteen Weeks Ended** | | | | Basic net (loss) income per share| $(0.17) | $0.19 | | Diluted net (loss) income per share| $(0.17) | $0.19 | | **Twenty-Six Weeks Ended** | | | | Basic net (loss) income per share| $(1.37) | $(0.08) | | Diluted net (loss) income per share| $(1.37) | $(0.08) | - All potential common shares were excluded from diluted EPS calculations for the thirteen and twenty-six weeks ended August 2, 2025, and the twenty-six weeks ended August 3, 2024, because they were anti-dilutive due to net losses[70](index=70&type=chunk) [Note 5. Fair Value of Financial Instruments](index=18&type=section&id=5.%20Fair%20Value%20of%20Financial%20Instruments) - The Company recorded **$1.0 million** in impairment charges for store property, plant, and equipment for the twenty-six weeks ended August 2, 2025, which are included in selling, general, and administrative expenses[75](index=75&type=chunk) - Contingent consideration related to the sale of business was **$2.552 million** as of August 2, 2025, classified as a Level 3 fair value measurement due to the use of unobservable inputs[74](index=74&type=chunk)[125](index=125&type=chunk) [Note 6. Debt](index=19&type=section&id=6.%20Debt) - As of August 2, 2025, the Company had **$10.0 million** in borrowings outstanding under its asset-based revolving Credit Agreement, with **$65.0 million** in remaining availability, compared to no borrowings and **$75.0 million** availability as of February 1, 2025[89](index=89&type=chunk)[193](index=193&type=chunk) - The Credit Agreement, which matures in May 2028, was amended on March 11, 2025, to allow for the sale of Creative Genius and release it from loan documents[81](index=81&type=chunk)[87](index=87&type=chunk) [Note 7. Income Taxes](index=20&type=section&id=7.%20Income%20Taxes) Effective Tax Rate | Period | August 2, 2025 | August 3, 2024 | | :------------------------------- | :------------- | :------------- | | Thirteen Weeks Ended | 0.4% | (188.2)% | | Twenty-Six Weeks Ended | (1.7)% | 99.0% | - The significant year-over-year change in effective tax rates is primarily due to a full valuation allowance recorded against the Company's net deferred tax assets for the fiscal year ended February 1, 2025[91](index=91&type=chunk)[92](index=92&type=chunk) - The recently enacted One Big Beautiful Bill Act (OBBBA) on July 4, 2025, does not have a material impact on the consolidated financial statements due to the Company maintaining a full valuation allowance on its U.S. deferred tax assets[93](index=93&type=chunk) [Note 8. Stock-Based Compensation](index=20&type=section&id=8.%20Stock-Based%20Compensation) - During the thirteen weeks ended August 2, 2025, the Company granted **1,253,694** restricted stock units (time-based and performance-based) with an aggregate fair value of **$2.7 million**, a substantial increase from **14,612 units** (**$0.1 million** fair value) in the prior-year period[96](index=96&type=chunk) - For the twenty-six weeks ended August 2, 2025, **2,757,196** restricted stock units (**$5.9 million** fair value) were granted, compared to **755,647 units** (**$5.1 million** fair value) in the same period of the prior year[97](index=97&type=chunk) - As of August 2, 2025, total unrecognized compensation cost related to nonvested restricted stock units was **$4.3 million**, expected to be recognized over a weighted-average period of **2.1 years**[101](index=101&type=chunk) [Note 9. Commitments and Contingencies](index=21&type=section&id=9.%20Commitments%20and%20Contingencies) - In June 2025, the Company received a **$4.6 million** purchase price adjustment request from the buyer of Creative Genius, which the Company disputes and has filed a legal action in the Chancery Court of Delaware to declare improper[103](index=103&type=chunk) - Management believes that current claims and contingencies are not probable to have a material adverse effect on the Company's financial condition, results of operations, or cash flows[102](index=102&type=chunk) [Note 10. Common Stock](index=21&type=section&id=10.%20Common%20Stock) - The Company's board approved a new **$30.0 million** share repurchase plan (2024 Share Repurchase Program) in December 2024, expiring in December 2027, with no purchases made under this program as of August 2, 2025[105](index=105&type=chunk)[106](index=106&type=chunk) - As of August 2, 2025, the Company held **15,834,579 shares** of its common stock as treasury shares, with an aggregate carrying amount of **$156.8 million**[108](index=108&type=chunk) [Note 11. Cloud Computing Arrangements](index=22&type=section&id=11.%20Cloud%20Computing%20Arrangements) - Unamortized Cloud Computing Arrangement (CCA) implementation costs totaled **$0.4 million** as of August 2, 2025, down from **$0.6 million** at February 1, 2025[109](index=109&type=chunk) - Amortization expense for CCA costs is recorded within selling, general, and administrative expenses[109](index=109&type=chunk) [Note 12. Cost Savings Initiatives and Other Charges](index=22&type=section&id=12.%20Cost%20Savings%20Initiatives%20and%20Other%20Charges) - The Company incurred **$3.0 million** in severance charges for the thirteen weeks ended August 2, 2025, and **$3.3 million** for the twenty-six weeks ended August 2, 2025, primarily related to unallocated corporate expenses[111](index=111&type=chunk) - The remaining liability for severance charges and cash retention payments was **$2.0 million** as of August 2, 2025[113](index=113&type=chunk) - Additional cost reduction initiatives, identified in late fiscal 2025, are expected to be fully realized in fiscal 2026, targeting efficiencies across retail stores, marketing, IT, professional services, logistics, and corporate payroll[110](index=110&type=chunk) [Note 13. Segment Reporting](index=24&type=section&id=13.%20Segment%20Reporting) - The Company operates two reportable segments: VB Direct and VB Indirect, with the Chief Operating Decision Maker (CODM) evaluating segment operating results primarily using operating income[115](index=115&type=chunk)[119](index=119&type=chunk) Segment Net Revenues (in thousands) | Segment | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :---------- | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | | VB Direct | $60,514 | $72,241 | $103,597 | $128,665 | | VB Indirect | $10,344 | $21,762 | $18,913 | $33,286 | | **Total** | **$70,858** | **$94,003** | **$122,510** | **$161,951** | Segment Operating Income (in thousands) | Segment | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :---------- | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | | VB Direct | $9,335 | $13,433 | $3,799 | $17,426 | | VB Indirect | $2,190 | $4,743 | $4,170 | $8,569 | | **Total** | **$11,525** | **$18,176** | **$7,969** | **$25,995** | [Note 14. Discontinued Operations](index=25&type=section&id=14.%20Discontinued%20Operations) - The Company completed the sale of Creative Genius (Pura Vida Bracelets) on March 31, 2025, for a total consideration of **$3.5 million**, including cash proceeds and contingent consideration with an estimated fair value of **$2.5 million**[124](index=124&type=chunk)[125](index=125&type=chunk) - A net loss on disposal of **$15.2 million** was recorded for the twenty-six weeks ended August 2, 2025, presented as part of discontinued operations[127](index=127&type=chunk)[128](index=128&type=chunk) Discontinued Operations Results (in thousands) | Metric | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | | Net revenues | — | $16,819 | $5,553 | $29,474 | | Income (loss) from discontinued operations, net of income tax | $37 | $(1,821) | $(15,163) | $(2,338) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the Company's financial performance, liquidity, and cash flows, covering strategic progress, macroeconomic factors, and segment-level results [Strategic Progress, Macroeconomic Factors, and Other Factors Impacting our Financial Condition and Results of Operations](index=28&type=section&id=Strategic%20Progress,%20Macroeconomic%20Factors,%20and%20Other%20Factors%20Impacting%20our%20Financial%20Condition%20and%20Results%20of%20Operations) - The Company is executing a comprehensive strategy to strengthen its market position, simplify decision-making, remove organizational complexity, and focus resources on high-impact initiatives, including investing in brand, innovation, and customer experiences[134](index=134&type=chunk) - Key strategic initiatives include Sharpening Brand Focus, Omnichannel Strategy, Outlet 2.0, Optimizing the Operating Model, and Reimagining How We Work[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) - Ongoing macroeconomic factors, such as elevated tariff costs and inflationary pressures, continue to negatively impact consumer discretionary spending, leading to softer performance in Vera Bradley outlet and full-line stores[139](index=139&type=chunk) [Management Transition](index=28&type=section&id=Management%20Transition) - Jacqueline Ardrey, the former Chief Executive Officer, departed on June 11, 2025, and the Board of Directors has initiated a national search for a successor[140](index=140&type=chunk) - Ian Bickley assumed the newly created interim role of Executive Chairman, effective July 7, 2025, to provide leadership and strategic guidance during the CEO transition[140](index=140&type=chunk) - Martin Layding was appointed Chief Financial Officer, effective June 12, 2025[141](index=141&type=chunk) [Recent Transactions](index=28&type=section&id=Recent%20Transactions) - The Company completed the sale of Pura Vida on March 31, 2025, and its results of operations are now reflected as discontinued operations in the Consolidated Statement of Operations[142](index=142&type=chunk) [How We Assess the Performance of Our Business](index=29&type=section&id=How%20We%20Assess%20the%20Performance%20of%20Our%20Business) - Net revenues reflect sales of merchandise and revenue from distribution and shipping/handling fees, less returns and discounts, categorized by VB Direct and VB Indirect segments[144](index=144&type=chunk) - Comparable sales are calculated for stores open at least 12 full fiscal months and e-commerce operations to evaluate performance, with various factors affecting them including economic trends, consumer preferences, competition, and promotional activities[145](index=145&type=chunk)[146](index=146&type=chunk)[148](index=148&type=chunk) - Gross profit is net revenues less cost of sales, influenced by volume, sales price, freight, operational efficiencies, promotional activities, commodity prices, tariffs, and labor costs[146](index=146&type=chunk)[147](index=147&type=chunk) - Selling, General, and Administrative (SG&A) expenses encompass selling, advertising, marketing, product development, and administrative costs, including employee compensation, store occupancy, media costs, and corporate functions[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Consolidated Results of Operations (in thousands, except percentages) | Metric | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Change ($) | Change (%) | | :---------------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Net revenues | $70,858 | $94,003 | $(23,145) | -24.6% | | Gross profit | $35,497 | $46,709 | $(11,212) | -24.0% | | SG&A expenses | $40,442 | $44,449 | $(4,007) | -9.0% | | Operating (loss) income from continuing operations | $(4,592) | $2,393 | $(6,985) | -291.9% | | Net (loss) income from continuing operations | $(4,709) | $7,527 | $(12,236) | -162.6% | | Net (loss) income | $(4,672) | $5,706 | $(10,378) | -181.9% | Consolidated Results of Operations (in thousands, except percentages) | Metric | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | Change ($) | Change (%) | | :---------------------------------------- | :--------------------------------- | :------------------------------- | :--------- | :--------- | | Net revenues | $122,510 | $161,951 | $(39,441) | -24.4% | | Gross profit | $58,264 | $80,749 | $(22,485) | -27.8% | | SG&A expenses | $81,246 | $89,544 | $(8,298) | -9.3% | | Operating (loss) income from continuing operations | $(22,449) | $(8,224) | $(14,225) | -173.0% | | Net (loss) income from continuing operations | $(22,969) | $(77) | $(22,892) | -29730% | | Net (loss) income | $(38,132) | $(2,415) | $(35,717) | -1479.0% | - VB Direct net revenues decreased by **16.2%** for the thirteen weeks and **19.5%** for the twenty-six weeks, with comparable sales down **17.3%** and **20.5%** respectively, primarily due to reduced conversion and traffic in all channels[153](index=153&type=chunk)[155](index=155&type=chunk)[170](index=170&type=chunk) - VB Indirect net revenues decreased by **52.5%** for the thirteen weeks and **43.2%** for the twenty-six weeks, mainly due to a decrease in key account orders and liquidation sales[156](index=156&type=chunk)[171](index=171&type=chunk) - Operating loss from continuing operations significantly worsened, increasing by **$7.0 million** for the thirteen weeks and **$14.2 million** for the twenty-six weeks, driven by decreased sales and gross profit, despite reductions in SG&A[160](index=160&type=chunk)[175](index=175&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) - The Company's primary liquidity sources are cash on hand, cash equivalents, and cash flow from operations, supplemented by a **$75.0 million** asset-based revolving credit agreement[184](index=184&type=chunk) - Net cash used in operating activities increased to **$23.3 million** for the twenty-six weeks ended August 2, 2025, from **$13.2 million** in the prior-year period, primarily due to the higher net loss[188](index=188&type=chunk) - Net cash provided by financing activities was **$9.8 million** for the twenty-six weeks ended August 2, 2025, a significant shift from **$16.4 million** used in the prior year, mainly due to **$10.0 million** in net borrowings from the credit facility and no common stock repurchases[191](index=191&type=chunk) - As of August 2, 2025, the Company had **$10.0 million** in borrowings outstanding and **$65.0 million** in availability under the Credit Agreement[193](index=193&type=chunk) [Critical Accounting Policies and Estimates](index=36&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - There were no significant changes to the Company's critical accounting policies and estimates as of August 2, 2025, compared to those described in the Annual Report on Form 10-K for the fiscal year ended February 1, 2025[197](index=197&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risks were identified as of August 2, 2025, compared to the prior fiscal year's 10-K filing - No material changes in market risks were identified as of August 2, 2025, compared to the Company's Annual Report on Form 10-K[199](index=199&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of August 2, 2025, with no material changes in internal control over financial reporting - The Company's disclosure controls and procedures were effective as of August 2, 2025, based on an evaluation by management, including the CEO and CFO[200](index=200&type=chunk) - There has been no material change in the Company's internal control over financial reporting during the most recent fiscal quarter[201](index=201&type=chunk) Part II. Other Information This part covers legal proceedings, risk factors, equity sales, other information, and exhibits [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The Company faces routine legal proceedings and disputes a **$4.6 million** purchase price adjustment request from the Creative Genius buyer - The Company is routinely involved in legal proceedings, including policing its intellectual property rights against trademark counterfeiting and infringement[202](index=202&type=chunk) - In June 2025, the Company received a **$4.6 million** purchase price adjustment request from the buyer of Creative Genius, which it disputes and has filed an action in the Chancery Court of Delaware to declare improper[203](index=203&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K were reported - No material changes to the risk factors previously set forth in the Company's Annual Report on Form 10-K for the fiscal year ended February 1, 2025, were reported[204](index=204&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) A new **$30.0 million** share repurchase plan was approved in December 2024, with no purchases made as of August 2, 2025 - A new **$30.0 million** share repurchase plan (2024 Share Repurchase Program) was approved in December 2024, effective from December 14, 2024, to December 2027[205](index=205&type=chunk) - As of August 2, 2025, no purchases have been made under the 2024 Share Repurchase Program[206](index=206&type=chunk) [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during the thirteen weeks ended August 2, 2025 - None of the Company's directors or executive officers adopted or terminated any Rule 10b5-1 trading plans during the thirteen weeks ended August 2, 2025[207](index=207&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL documents - The exhibits include CEO Section 302 Certification, CFO Section 302 Certification, Section 906 Certifications, and various Inline XBRL documents (Instance, Schema, Calculation, Label, Presentation, Definition Linkbase Documents)[208](index=208&type=chunk)

Core Viewpoint - Vera Bradley reported a significant decline in fiscal Q2 2026 revenue, missing analyst expectations, which led to a drop in stock price [1][6]. Revenue Performance - Consolidated net revenues from continuing operations decreased by 24.6% to $70.9 million, falling short of Wall Street's forecast of $78.5 million [1]. - Direct segment revenue fell by 16.2% to $60.5 million compared to $72.2 million a year earlier, with comparable sales dropping by 17.3% [3]. - Indirect segment revenue saw a substantial decline of 52.5%, down to $10.3 million from $21.8 million, attributed to lower orders from key accounts and reduced liquidation activity [4]. Loss and Sales Trends - The company managed to narrow its adjusted net loss to 2 cents per share, outperforming the expected loss of 15 cents [2]. - Comparable sales experienced a 17.3% decline, indicating lower conversion rates across various sales channels [2][3]. Strategic Initiatives - The company is undergoing a product design revamp, reintroducing iconic styles while balancing fabrics, silhouettes, and prints [5]. - A comprehensive strategy involving merchandising, innovation, marketing, and multi-channel engagement is being implemented to reconnect with loyal customers and attract new audiences [5]. - The company closed seven underperforming full-line stores and one outlet as part of its footprint rationalization efforts [3].

Vera Bradley (VRA) came out with a quarterly loss of $0.02 per share versus the Zacks Consensus Estimate of a loss of $0.15. This compares to earnings of $0.13 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +86.67%. A quarter ago, it was expected that this handbag and accessories company would post a loss of $0.13 per share when it actually produced a loss of $0.36, delivering a surprise of -176.92%.Over the last four quarter ...

Financial Data and Key Metrics Changes - For the second quarter, the company reported revenues of $70.9 million, a decline of approximately 25% compared to the previous year, aligning with internal forecasts [9][22] - The net loss from continuing operations for the quarter was -$0.5 million, or -$0.02 per diluted share, compared to a net income of $2.6 million, or $0.09 per diluted share in the prior year [22] - Gross margin was $35.4 million, or 49.9% of net revenues, slightly up from 49.8% in the prior year [23][24] - SG&A expenses totaled $36.3 million, or 51.2% of net revenues, compared to $43.6 million, or 46.4% of net revenues a year ago [24] Business Line Data and Key Metrics Changes - Direct segment revenues for the second quarter were $60.5 million, a 16.2% decrease from $72.2 million in the prior year [23] - Comparable sales declined 17.3%, driven by conversion declines in full line, outlet, and e-commerce channels [23] - Indirect segment revenues totaled $10.3 million, a 52.5% decrease from $21.8 million in the prior year, primarily due to a decline in key account orders and liquidation sales [23] Market Data and Key Metrics Changes - The company experienced sequential improvement in comparable store sales across its store fleet and online channels during the second quarter [9] - Inventory decreased by 13.2% to $96.7 million compared to $111.4 million at the end of the second quarter last year [25] Company Strategy and Development Direction - The company is implementing a comprehensive strategy to revitalize its market position by leveraging its brand's emotional connection with consumers [4][5] - Five key strategic initiatives have been identified: sharpening brand focus, developing a cohesive omnichannel strategy, updating the outlet strategy, improving the operating model, and reimagining organizational structure [10][16][20][21] - The company is focusing on product innovation and targeted marketing to re-engage loyal customers and expand reach to new market segments [5][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges in the current operating environment but expresses confidence in the ongoing transformation efforts and the sequential improvements observed [21][26] - The company is not providing guidance due to the dynamic consumer environment but is focused on enhancing operational discipline [26] Other Important Information - The company is in the process of searching for a new CEO and is meeting with promising candidates [8] - The company estimates an annualized impact of $11 million from tariffs and is working to mitigate these impacts [26] Q&A Session Summary - The Q&A session was conducted but no specific questions or answers were documented in the provided content [27]

Vera Bradley (NasdaqGS:VRA) Q2 2026 Earnings Call September 11, 2025 08:30 AM ET Company ParticipantsMarty Layding - CFOIan Bickley - Executive ChairmanMark Dely - Chief Administrative OfficerOperatorWelcome to the Vera Bradley second quarter fiscal 2026 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. You may be placed in the question queue at any time by pressing star one on your telephone keypad. As a re ...

Vera Bradley (NasdaqGS:VRA) Q2 2026 Earnings Call September 11, 2025 08:30 AM ET Company ParticipantsMark Dely - Chief Administrative OfficerIan Bickley - Executive ChairmanMartin Layding - CFOOperatorWelcome to the Vera Bradley second quarter fiscal 2026 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. You may be placed in the question queue at any time by pressing star one on your telephone keypad. As a r ...

Financial Data and Key Metrics Changes - For Q2 2026, the company reported revenues of $70.9 million, a decline of approximately 25% compared to the previous year, aligning with internal forecasts [10][24] - The net loss from continuing operations was -$0.5 million, or -$0.02 per diluted share, compared to a net income of $2.6 million, or $0.09 per diluted share in the prior year [24] - Gross margin was $35.4 million, or 49.9% of net revenues, slightly up from 49.8% in the prior year [25][26] - SG&A expenses totaled $36.3 million, or 51.2% of net revenues, compared to $43.6 million, or 46.4% of net revenues a year ago [26] Business Line Data and Key Metrics Changes - Direct segment revenues for Q2 totaled $60.5 million, a 16.2% decrease from $72.2 million in the prior year, with comparable sales down 17.3% [25] - Indirect segment revenues were $10.3 million, a 52.5% decrease from $21.8 million in the prior year, primarily due to a decline in key account orders and liquidation sales [25] Market Data and Key Metrics Changes - The company experienced sequential improvement in comparable store sales across its store fleet and online channels during the second quarter [10] - Inventory decreased by 13.2% to $96.7 million compared to $111.4 million at the end of the second quarter last year [27] Company Strategy and Development Direction - The company is implementing a comprehensive strategy to revitalize its market position, focusing on brand strength, product innovation, and targeted marketing [5][6] - Five key strategic initiatives have been identified: sharpening brand focus, developing a cohesive omnichannel strategy, updating the outlet strategy, improving the operating model, and reimagining organizational structure [10][18][21][22] - The company is also focusing on enhancing its wholesale strategy and building new retail partnerships to reach new consumer segments [15][17] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenging operating environment but expresses confidence in the current trends and improvements being made [22][28] - The company is not providing guidance due to the dynamic consumer environment but is focused on enhancing operational discipline and improving financial results [28] Other Important Information - The company is in the process of searching for a new CEO, which is a major focus for the management team [9] - The anticipated annualized impact of tariffs is estimated at $11 million, with efforts underway to mitigate these impacts [28] Q&A Session Summary - The Q&A session was conducted but no specific questions or answers were documented in the provided content [30]