Vera Bradley(VRA)2024-12-11 19:33Financial Performance - Net revenues for the thirteen weeks ended November 2, 2024, were $80.578 million, a decrease from $114.987 million for the same period in 2023, representing a decline of approximately 29.9%[134] - Gross profit for the thirteen weeks ended November 2, 2024, was $43.609 million, down from $63.007 million in the prior year, reflecting a gross profit margin of 54.1% compared to 54.8%[134] - The company reported an operating loss of $10.474 million for the thirteen weeks ended November 2, 2024, compared to an operating income of $6.786 million for the same period in 2023[134] - Net loss for the thirteen weeks ended November 2, 2024, was $12.800 million, compared to a net income of $5.118 million in the prior year, resulting in a net loss margin of 15.9%[134] - For the thirteen weeks ended November 2, 2024, net revenues decreased by $34.4 million, or 29.9%, to $80.6 million from $115.0 million in the comparable prior-year period[138] - For the thirty-nine weeks ended November 2, 2024, net revenues decreased by $65.5 million, or 19.4%, to $272.0 million from $337.5 million in the comparable prior-year period[154] Segment Performance - In the VB Direct segment, net revenues decreased by $19.8 million, or 27.4%, to $52.5 million, with comparable sales down 27.2%, including a 32.6% decrease in comparable store sales and a 17.5% decrease in e-commerce sales[139] - The VB Indirect segment saw net revenues decrease by $7.0 million, or 27.9%, to $18.0 million, primarily due to a decline in specialty and key account orders[140] - Pura Vida segment net revenues decreased by $7.6 million, or 42.9%, to $10.1 million, primarily due to a decline in e-commerce and wholesale sales[141] - In the VB Direct segment for the thirty-nine weeks, net revenues decreased by $35.8 million, or 16.5%, to $181.1 million, with comparable sales down 16.0%[155] - Pura Vida segment net revenues for the thirty-nine weeks decreased by $23.3 million, or 37.1%, to $39.6 million, primarily due to a decline in e-commerce and wholesale sales[157] Cost and Expense Management - Selling, general, and administrative expenses (SG&A) for the thirteen weeks ended November 2, 2024, were $54.220 million, which is 67.3% of net revenues, compared to 49.0% in the same period last year[134] - SG&A expenses decreased by $2.2 million, or 3.8%, to $54.2 million, but as a percentage of net revenues, SG&A expenses increased to 67.3% from 49.0% in the prior-year period[143] - SG&A expenses decreased by $12.7 million, or 7.3%, to $161.6 million, but as a percentage of net revenues, they increased to 59.4% from 51.6% in the prior year[159] - The company is implementing cost reduction strategies across various areas, including retail efficiencies and marketing expenses, to improve long-term profitability[116] - The company is reviewing its expense structure for additional cost reduction opportunities to support future growth[116] Operating Loss and Profitability - The company reported an operating loss of $(10.5) million for the thirteen weeks ended November 2, 2024, a decrease of $17.3 million, or 254.3%, from operating income of $6.8 million in the prior-year period[145] - Operating loss for the thirty-nine weeks ended November 2, 2024, was $(19.0) million, a decrease of $32.3 million, or 243.4%, from operating income of $13.3 million in the prior year[162] - VB Direct segment operating income decreased by $24.2 million, or 55.3%, to $19.5 million, with a margin of 10.8% compared to 20.1% in the prior year[163] - Pura Vida segment reported an operating loss of $(3.8) million, a decrease of $8.8 million, or 176.7%, from operating income of $5.0 million in the prior year[165] Cash Flow and Financial Position - Net cash used in operating activities was $35.8 million for the thirty-nine weeks ended November 2, 2024, compared to net cash provided of $21.1 million in the prior year[174] - Net cash used in investing activities was $6.1 million, a decrease from $12.5 million in the prior year, primarily due to the prior year's purchase of a 25% interest in Pura Vida[176] - Net cash used in financing activities increased to $21.9 million from $2.9 million in the prior year, mainly due to $21.2 million in common stock repurchases[177] - The company has no debt outstanding as of November 2, 2024, and has access to a $75.0 million asset-based revolving credit agreement for additional liquidity if needed[170] Market Challenges - The company continues to face challenges from higher tariffs and inflationary pressures, impacting consumer discretionary spending and leading to weakness in both outlet and full-line stores[117] Strategic Initiatives - Project Restoration was launched in July 2025, focusing on new products, store remodels, and customer marketing to drive long-term growth[115] - Impairment charges of $2.2 million were recognized for store property, plant, and equipment during the thirteen weeks ended November 2, 2024[133] Tax Rate - The effective tax rate for the thirty-nine weeks ended November 2, 2024, was 15.3%, down from 28.3% in the prior year, reflecting changes in income projections and other factors[167]