Vera Bradley, Inc. (NASDAQ:VRA) Q3 2021 Results Earnings Conference Call December 9, 2020 9:30 AM ET Company Participants Mark Dely - Chief Administrative Officer Rob Wallstrom - Chief Executive Officer John Enwright - Chief Financial Officer Conference Call Participants Oliver Chen - Cowen Mark Altschwager - Baird Steve Marotta - CL King & Associates Dana Telsey - Telsey Advisory Group Eric Beder - SCC Research Operator Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Vera Brad ...

PART I. FINANCIAL INFORMATION [Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents Vera Bradley, Inc.'s unaudited condensed consolidated financial statements, including Balance Sheets, Statements of Operations, and Cash Flows, for periods ending August 1, 2020 Condensed Consolidated Balance Sheets (as of Aug 1, 2020 vs Feb 1, 2020) | (in thousands) | August 1, 2020 | February 1, 2020 | | :--- | :--- | :--- | | **Total current assets** | $260,979 | $218,789 | | **Total assets** | $542,084 | $535,061 | | **Total current liabilities** | $82,240 | $87,405 | | **Long-term debt** | $30,000 | $— | | **Total liabilities** | $218,656 | $201,242 | | **Total shareholders' equity** | $293,774 | $303,770 | Condensed Consolidated Statements of Operations (Thirteen Weeks Ended) | (in thousands, except per share data) | Thirteen Weeks Ended Aug 1, 2020 | Thirteen Weeks Ended Aug 3, 2019 | | :--- | :--- | :--- | | **Net revenues** | $131,770 | $119,785 | | **Gross profit** | $79,621 | $67,333 | | **Operating income** | $17,499 | $7,348 | | **Net income** | $8,327 | $5,718 | | **Net income attributable to Vera Bradley, Inc.** | $7,216 | $5,854 | | **Diluted net income per share** | $0.42 | $0.17 | Condensed Consolidated Statements of Operations (Twenty-Six Weeks Ended) | (in thousands, except per share data) | Twenty-Six Weeks Ended Aug 1, 2020 | Twenty-Six Weeks Ended Aug 3, 2019 | | :--- | :--- | :--- | | **Net revenues** | $201,054 | $210,788 | | **Gross profit** | $113,809 | $117,801 | | **Operating (loss) income** | $(8,075) | $3,703 | | **Net (loss) income** | $(7,210) | $3,313 | | **Net (loss) income attributable to Vera Bradley, Inc.** | $(8,121) | $3,449 | | **Diluted net (loss) per share** | $(0.24) | $0.10 | Condensed Consolidated Statements of Cash Flows (Twenty-Six Weeks Ended) | (in thousands) | Twenty-Six Weeks Ended Aug 1, 2020 | Twenty-Six Weeks Ended Aug 3, 2019 | | :--- | :--- | :--- | | **Net cash (used in) provided by operating activities** | $(77) | $1,091 | | **Net cash provided by (used in) investing activities** | $18,901 | $(61,412) | | **Net cash provided by (used in) financing activities** | $6,816 | $(6,351) | | **Net increase (decrease) in cash and cash equivalents** | $25,651 | $(66,651) | | **Cash and cash equivalents, end of period** | $75,568 | $46,842 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the significant impact of the COVID-19 pandemic on operations, Q2 revenue growth driven by Pura Vida, and first-half operating loss, alongside liquidity management and strategic initiatives - The company took significant actions to mitigate the impact of COVID-19, including temporarily closing all Vera Bradley stores, furloughing **~80%** of its workforce, reducing executive compensation, suspending share repurchases, and drawing **$60.0 million** from its credit agreement[158](index=158&type=chunk)[162](index=162&type=chunk) - Strategic progress during the quarter included the launch of the Vera Bradley + Harry Potter collaboration, expansion of face mask offerings, and migration of the e-commerce site to Shopify Plus[164](index=164&type=chunk)[165](index=165&type=chunk) Q2 Fiscal 2021 vs Q2 Fiscal 2020 Results | Metric | Q2 FY2021 | Q2 FY2020 | Change | | :--- | :--- | :--- | :--- | | Net Revenues | $131.8M | $119.8M | +10.0% | | Gross Profit % | 60.4% | 56.2% | +420 bps | | SG&A Expenses | $62.2M | $60.7M | +2.3% | | Operating Income | $17.5M | $7.3M | +139.7% | Q2 Fiscal 2021 Net Revenues by Segment | Segment | Q2 FY2021 (in millions) | Q2 FY2020 (in millions) | % Change | | :--- | :--- | :--- | :--- | | VB Direct | $81.2 | $94.4 | -13.9% | | VB Indirect | $17.7 | $20.0 | -11.4% | | Pura Vida | $32.8 | $5.4 | N/A (partial period in prior year) | - The company recorded **$3.8 million** in impairment charges for the first half of the year related to underperforming store assets, driven by the impact of the COVID-19 pandemic[183](index=183&type=chunk)[184](index=184&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes in market risks as of August 1, 2020, compared to those disclosed in its prior Annual Report on Form 10-K - There was no material change in the Company's market risks as of August 1, 2020, compared to the risks disclosed in the Annual Report on Form 10-K for the fiscal year ended February 1, 2020[248](index=248&type=chunk) [Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of August 1, 2020, with the Pura Vida business integrated into internal controls - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of August 1, 2020[249](index=249&type=chunk) - The acquired Pura Vida business has been integrated into the company's system of internal control over financial reporting and was included in the effectiveness assessment[250](index=250&type=chunk)[251](index=251&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in two legal proceedings, including a lawsuit by Vesi Incorporated seeking at least $10.0 million and a class-action lawsuit alleging California Labor Code violations - Vesi Incorporated filed a suit in August 2019 related to the Company's licensing business, seeking damages of not less than **$10.0 million**[252](index=252&type=chunk) - In April 2020, a class-action lawsuit was filed by Chidimma Igboakaeze in California, alleging various violations of the state's Labor Code regarding wages, overtime, and breaks[253](index=253&type=chunk) [Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) This section highlights updated risk factors, primarily focusing on the significant and uncertain adverse impacts of the COVID-19 pandemic on revenue, operations, and the global supply chain - A significant new risk factor is the continued disruption from the COVID-19 pandemic, which may adversely impact revenue streams, operations, and the global supply chain[256](index=256&type=chunk) - Despite reopening most stores, the company has experienced and may continue to experience significantly reduced traffic, demand, and sales[256](index=256&type=chunk) - The supply chain faces risks, particularly from China, which is expected to account for approximately **20%** of production in fiscal 2021[257](index=257&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports on its $50.0 million share repurchase program, which was temporarily suspended to conserve cash due to the COVID-19 pandemic, with no repurchases during the thirteen weeks ended August 1, 2020 - The Company's **$50.0 million** share repurchase program, approved in November 2018, was temporarily suspended to conserve cash as a result of the COVID-19 pandemic[263](index=263&type=chunk) - There were no shares repurchased during the thirteen weeks ended August 1, 2020, with approximately **$32.9 million** remaining available for repurchase under the program as of this date[264](index=264&type=chunk)[265](index=265&type=chunk) [Exhibits](index=54&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL data files - The exhibits filed with this report include CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, as well as various Inline XBRL documents[267](index=267&type=chunk)

Financial Data and Key Metrics Changes - Total company year-over-year second quarter revenue grew by 10% driven by the addition of Pura Vida and a doubling of Vera Bradley's ecommerce sales, despite a decrease in store revenues due to COVID-19 [9][22] - Consolidated net revenues totaled $131.8 million for the current year second quarter, an increase of 10% over the prior year [22] - Non-GAAP consolidated net income was $10.9 million or $0.32 per diluted share for the second quarter compared to $8.7 million or $0.25 per diluted share last year [22] - Consolidated gross margin totaled $79.6 million or 60.4% of net revenues compared to 57.1% in the prior year [25] Business Line Data and Key Metrics Changes - Vera Bradley direct segment revenues totaled $81.2 million, a 13.9% decrease from $94.4 million in the prior year second quarter, primarily due to store closures [23] - Ecommerce revenues for Vera Bradley increased by 99.1% during the quarter [23] - Pura Vida segment revenues totaled $32.8 million compared to $5.4 million in the prior year, reflecting strong growth post-acquisition [24] Market Data and Key Metrics Changes - The 133 stores that were open for the entire fiscal month of July generated approximately 70% of the prior year's sales [13][56] - Ecommerce business remained strong even as stores began to reopen, indicating a shift in consumer behavior towards online shopping [14][84] Company Strategy and Development Direction - The company is focused on innovation and product marketing to enhance customer experience, particularly through new fabric innovations and collaborations [35][42] - A significant emphasis is placed on digital transformation and enhancing ecommerce capabilities, with investments in technology to streamline operations [32][49] - The company aims to maintain a strong balance sheet while managing expenses and cash flow effectively [11][73] Management's Comments on Operating Environment and Future Outlook - Management noted that the continuing uncertainties related to COVID-19 make financial performance difficult to predict, and they are not providing forward-looking guidance [28] - The company anticipates a recovery in core business as the impact of COVID-19 lessens, despite expecting a slowdown in mask sales [39][121] - Management expressed confidence in the long-term growth potential of both Vera Bradley and Pura Vida brands, particularly in the casual and comfortable product segments [74] Other Important Information - The company has initiated diversity and inclusion efforts, appointing a manager to lead these initiatives [17] - Significant community support initiatives were highlighted, including donations from mask sales to healthcare workers [47] Q&A Session Summary Question: Clarification on mask sales and future expectations - Management confirmed that cotton masks represented over 10% of total sales in the quarter, with a mix of approximately 60/40 direct to indirect sales [80][81] - Future mask sales are expected to moderate, with August sales running similarly to July [82] Question: Store productivity and digital trends - Store performance remained around 70% of prior year sales, with digital sales continuing to show strength even after store reopenings [83][84] Question: Operating margin insights - The operating margin of 16% was influenced by temporary factors such as mask sales and cost savings from furloughed employees, with expectations for some permanent savings moving forward [86][90] Question: Back-to-school strategy - Management noted a slow start to back-to-school sales but expects the season to elongate into the fall, allowing for inventory adjustments [95][97] Question: Pura Vida's performance and customer engagement - Pura Vida has shown strong customer engagement and resilience, with no significant migration of customers between the two brands [100][101] Question: New fabric innovations and customer base expansion - New fabric innovations like ReActive are attracting younger, sustainability-focused customers, while performance twill is expected to grow as office activities resume [106][107] Question: Digital shipping expenses and operating margin impact - Management acknowledged potential pressure on shipping costs but is exploring creative solutions to manage expenses effectively [117][120]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________ FORM 10-Q ___________________________ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended May 2, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From to Commission File Number: 001-34918 ___________________________ VERA BRADLEY, INC. (Exact name of r ...

Vera Bradley, Inc. (NASDAQ:VRA) Q1 2021 Earnings Conference Call June 3, 2020 9:30 AM ET Company Participants Mark Dely - Chief Administrative Officer Rob Wallstrom - Chief Executive Officer John Enwright - Chief Financial Officer Conference Call Participants Eric Beder - SCC Research Oliver Chen - Cowen Operator Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Vera Bradley First Quarter Conference Call. At this time, all participants are in a listen-only mode. Following the pre ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________________ FORM 10-K _____________________________________________ ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From to Commission File Number: 001-34918 _____________________________________________ VERA BRADLEY, INC. (Exact name of registrant as specified in its charter) _____________________________________________ Indiana 27-29 ...

```markdown [Financial Information](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements, reflecting the significant impact of the Pura Vida acquisition and ASC 842 adoption [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $532.0 million, and liabilities rose to $209.6 million, primarily due to the Pura Vida acquisition and ASC 842 adoption Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Nov 2, 2019 | Feb 2, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $25,999 | $113,493 | | Inventories | $133,964 | $91,581 | | Operating right-of-use assets | $116,571 | $— | | Intangible assets, net | $58,772 | $— | | Goodwill | $44,604 | $— | | **Total assets** | **$532,026** | **$362,148** | | **Liabilities & Equity** | | | | Short-term operating lease liabilities | $22,162 | $— | | Long-term operating lease liabilities | $115,706 | $— | | Earn-out liability | $21,901 | $— | | **Total liabilities** | **$209,645** | **$67,445** | | Redeemable noncontrolling interest | $30,333 | $— | | Total shareholders' equity | $292,048 | $294,703 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net revenues increased 30.5% to $127.5 million due to the Pura Vida acquisition, but operating income declined to a $1.5 million loss due to acquisition-related expenses Statement of Operations Highlights (in thousands, except per share data) | Metric | Q3 2019 | Q3 2018 | YTD 2019 | YTD 2018 | | :--- | :--- | :--- | :--- | :--- | | Net revenues | $127,501 | $97,688 | $338,289 | $297,904 | | Gross profit | $67,870 | $57,152 | $185,671 | $171,508 | | Operating (loss) income | $(1,476) | $5,343 | $2,227 | $15,447 | | Net income attributable to Vera Bradley, Inc. | $139 | $4,226 | $3,588 | $12,138 | | Diluted EPS attributable to Vera Bradley, Inc. | $0.00 | $0.12 | $0.10 | $0.34 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was $9.2 million, while investing activities used $67.0 million, primarily due to the Pura Vida acquisition Cash Flow Summary (in thousands) | Activity | Thirty-Nine Weeks Ended Nov 2, 2019 | Thirty-Nine Weeks Ended Nov 3, 2018 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(9,235) | $11,603 | | Net cash used in investing activities | $(67,010) | $(6,540) | | Net cash used in financing activities | $(11,248) | $(11,502) | | **Net decrease in cash and cash equivalents** | **$(87,494)** | **$(6,437)** | [Pura Vida Acquisition Details](index=28&type=section&id=12.%20Acquisition%20of%20Pura%20Vida) The company acquired a 75% interest in Pura Vida for $75 million cash, allocating $44.6 million to goodwill and $58.8 million to intangible assets - Completed the acquisition of a **75% ownership interest in Pura Vida** on July 16, 2019, for cash consideration of approximately **$75 million**, plus a working capital adjustment and a contingent earn-out of up to **$22.5 million**[136](index=136&type=chunk)[137](index=137&type=chunk) Preliminary Purchase Price Allocation (in thousands) | Item | Adjusted Fair Value at Acquisition Date | | :--- | :--- | | Total assets acquired | $147,609 | | Total liabilities assumed | $17,443 | | Goodwill | $44,604 | | Intangible asset, brand | $36,668 | | Other intangible assets | $24,988 | - Pro forma results, assuming the acquisition occurred at the beginning of fiscal 2019, show **net revenues of $133.1 million** and **net income attributable to Vera Bradley, Inc. of $5.3 million** for the third quarter of 2019[149](index=149&type=chunk)[150](index=150&type=chunk) [Segment Reporting](index=33&type=section&id=16.%20Segment%20Reporting) The company now operates three segments: VB Direct, VB Indirect, and Pura Vida, with Pura Vida contributing $25.0 million in revenue but reporting an operating loss due to acquisition charges Segment Performance - Q3 2019 (in thousands) | Segment | Net Revenues | Operating Income (Loss) | | :--- | :--- | :--- | | VB Direct | $78,397 | $14,675 | | VB Indirect | $24,087 | $9,324 | | Pura Vida | $25,017 | $(4,483) | | **Total Segment** | **$127,501** | **$19,516** | | Unallocated corporate expenses | N/A | $(20,992) | | **Consolidated Operating Loss** | **$127,501** | **$(1,476)** | [Management's Discussion and Analysis (MD&A)](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 financial results, highlighting the Pura Vida acquisition's impact on revenue growth and operating loss, alongside strong core brand performance and stable liquidity [Results of Operations (Q3 FY2020 vs Q3 FY2019)](index=41&type=section&id=Results%20of%20Operations%20-%20Q3%20FY2020) Q3 net revenues increased 30.5% to $127.5 million, driven by Pura Vida, but gross margin declined and SG&A expenses rose, resulting in a $1.5 million operating loss - **VB Direct segment comparable sales increased 4.7%**, reflecting a **6.9% increase in e-commerce** and a **4.0% increase in comparable store sales**[188](index=188&type=chunk) - **Gross profit was negatively impacted by $6.2 million (4.9% of net revenues)** from the amortization of the inventory step-up adjustment related to the Pura Vida acquisition[191](index=191&type=chunk) - **SG&A expenses increased by $17.5 million**, primarily due to **Pura Vida operating expenses ($11.4 million)**, **intangible asset amortization ($2.5 million)**, and **accretion of the earn-out liability ($1.8 million)**[192](index=192&type=chunk) - The Pura Vida segment reported an **operating loss of $4.5 million**, which included **$6.2 million for inventory step-up** and **$2.5 million for intangible asset amortization**[197](index=197&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity from cash, investments, and an undrawn $75.0 million credit facility, despite cash usage for operations and the Pura Vida acquisition - Primary liquidity sources are cash on hand, investments, and operating cash flow, with access to a **$75.0 million asset-based revolving credit agreement**, which had no borrowings outstanding[219](index=219&type=chunk) - **Net cash used in operating activities was $9.2 million** for the 39-week period, a decrease from **$11.6 million provided in the prior year**, primarily due to a **$22.0 million use of cash for inventory**[227](index=227&type=chunk) - **Net cash used in investing activities was $67.0 million**, primarily due to the acquisition of Pura Vida[229](index=229&type=chunk) [Market Risk Disclosures](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes to the market risks disclosed in the Annual Report on Form 10-K for the fiscal year ended February 2, 2019 - As of November 2, 2019, there was **no material change in the market risks** from those described in the Annual Report on Form 10-K for the fiscal year ended February 2, 2019[243](index=243&type=chunk) [Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective, excluding the newly acquired Pura Vida business from internal control assessment as permitted by SEC guidance - The CEO and CFO concluded that the Company's **disclosure controls and procedures were effective** as of November 2, 2019[244](index=244&type=chunk) - The company has excluded the acquired Pura Vida business from its **assessment of the effectiveness of internal control over financial reporting** for the year of acquisition, as allowed by SEC guidance[246](index=246&type=chunk) [Other Information](index=48&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in a lawsuit filed by Vesi Incorporated seeking at least $10.0 million in damages, with the company denying liability and filing a counterclaim - In August 2019, Vesi Incorporated filed a lawsuit against the Company related to its licensing business, alleging **breach of fiduciary duty and other torts**[248](index=248&type=chunk) - The complaint seeks **damages of not less than $10.0 million**. The Company denies liability, intends to vigorously defend itself, and has filed a counterclaim[248](index=248&type=chunk) [Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) New risk factors from the Pura Vida acquisition include integration challenges, compliance issues, potential impairment of goodwill and intangibles, and future financial obligations from a Put/Call agreement - The Pura Vida acquisition introduces risks such as **failure to perform as planned**, **difficulties in assimilating employees and operations**, and **diversion of management resources**[250](index=250&type=chunk)[252](index=252&type=chunk) - A significant portion of Pura Vida's assets are **goodwill ($44.6 million)** and **other intangible assets ($61.7 million)**, which could be subject to **impairment write-offs**, adversely affecting financial results[252](index=252&type=chunk) - A **Put/Call Agreement for the remaining 25% of Pura Vida** could require the company to purchase this interest after five years, representing a **potentially significant future financial obligation**[254](index=254&type=chunk)[255](index=255&type=chunk) [Share Repurchases](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 388,833 shares for $3.9 million during Q3 FY2020, with $38.1 million remaining under the program expiring in December 2020 Share Repurchases in Q3 2020 | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Dollar Value Remaining Under Program | | :--- | :--- | :--- | :--- | | Aug 4 - Aug 31, 2019 | 87,192 | $10.37 | $41,120,594 | | Sep 1 - Oct 5, 2019 | 189,894 | $9.66 | $39,285,941 | | Oct 6 - Nov 2, 2019 | 111,747 | $10.47 | $38,115,675 | | **Total for Quarter** | **388,833** | **$10.05** | **$38,115,675** | - The company purchased an aggregate of **$3.9 million of its common stock** during the thirteen weeks ended November 2, 2019[257](index=257&type=chunk) ```

Vera Bradley, Inc. (NASDAQ:VRA) Q3 2020 Earnings Conference Call December 11, 2019 9:30 AM ET Company Participants Mark Dely - Chief Administrative Officer Rob Wallstrom - Chief Executive Officer John Enwright - Chief Financial Officer Conference Call Participants Mark Altschwager - Baird Oliver Chen - Cowen and Company Eric Beder - SCC Research Steve Marotta - CL King Dana Telsey - Telsey Operator Good morning ladies and gentlemen. Thank you for standing-by. Welcome to the Vera Bradley Third Quarter Earni ...

Table of Contents x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended August 3, 2019 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From to Commission File Number: 001-34918 ___________________________ VERA BRADLEY, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________ FORM 10-Q ___________________________ (Exact name ...

Financial Data and Key Metrics Changes - Consolidated net revenues for Q2 totaled $119.8 million, including $5.4 million from Pura Vida, representing a 0.7% increase from $113.6 million in the prior year [18] - Net income attributable to Vera Bradley for Q2 was $8.7 million or $0.25 per diluted share, compared to $9.3 million or $0.26 per diluted share in the prior year [19] - For the six months, consolidated net revenues totaled $210.8 million, up from $200.2 million last year, with net income of $6.9 million or $0.20 per diluted share [25] Business Line Data and Key Metrics Changes - Direct segment revenues for Q2 were $94.4 million, a 3.7% increase from $91 million in the prior year, with comparable sales up 2.1% [20] - Indirect segment revenues decreased 11.4% to $20 million from $22.6 million, reflecting reduced orders and shipping delays [21] - For the six months, direct segment revenues totaled $165.5 million, a 5.7% increase, while indirect segment revenues decreased 8.7% to $39.9 million [26][27] Market Data and Key Metrics Changes - Comparable sales for the first half of the year increased by 3.3%, despite a challenging North American handbag market [8] - The overall retail environment remains challenging, particularly affecting the handbag market [4] Company Strategy and Development Direction - The company is focused on three key areas for fiscal 2020: growth, operational excellence, and ownership [8][9][11] - The acquisition of Pura Vida is seen as a strategic fit, enhancing the brand's lifestyle positioning and expanding customer engagement [12][14] - The company aims to reduce production exposure in China to less than 25% by the end of the fiscal year [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the pressure from tariffs and shipping costs impacting gross margins [5][22] - The company expects net sales for Q3 to be between $122 million and $129 million, including Pura Vida revenues [34] - Full-year net sales are projected to be between $490 million and $505 million, reflecting a return to positive sales growth [38] Other Important Information - The company has no debt outstanding and had cash and equivalents of $70.5 million at the end of Q2 [31] - Inventory at the end of Q2 was $130.7 million, with $26.2 million attributed to Pura Vida [32] Q&A Session Summary Question: Insights on customer profile from collaborations - Management noted that collaborations have attracted new customers, increasing brand awareness and engagement [76][77] Question: Impact of product and marketing initiatives on factory business - The focus on full-price business is expected to positively influence the factory channel, with strong performance noted in factory stores [79][80] Question: Revenue outlook for Pura Vida - Anticipated revenue for Pura Vida in the back half of the year is $65 million to $70 million, with expected growth in the coming years [81][82] Question: Challenges in the indirect channel - Management acknowledged pressures in the indirect channel but noted positive feedback from specialty accounts regarding full-price sell-through [85][86] Question: Traffic trends and merchandise margins - Traffic in the full-price segment has been softer, but promotional activity is being managed carefully to maintain margins [93][94] Question: Leveraging Pura Vida's digital expertise - The company plans to learn from Pura Vida's success in engaging younger customers and enhancing social media presence [97][98] Question: Seasonality and earnings contribution from Pura Vida - Pura Vida is expected to contribute positively to earnings without significant first-half losses anticipated [110][112] Question: Incremental tariffs and China exposure - Management confirmed that all purchases from China will incur tariffs by the end of the year, impacting costs [116][117]