Vera Bradley(US:VRA)2025-12-11 21:00Financial Performance - For the thirteen weeks ended November 1, 2025, net revenues decreased by $8.2 million, or 11.7%, to $62.3 million from $70.5 million in the prior year[157]. - Gross profit for the same period was $26.2 million, representing 42.1% of net revenues, compared to $38.4 million or 54.5% in the prior year[155]. - The operating loss from continuing operations for the thirteen weeks was $12.2 million, compared to a loss of $8.2 million in the prior year[155]. - For the thirty-nine weeks ended November 1, 2025, net revenues decreased by $47.6 million, or 20.5%, to $184.8 million from $232.4 million in the prior-year period[171]. - The operating loss from continuing operations for the thirty-nine weeks ended November 1, 2025, was $(12.2) million, an increase of $4.0 million, or 49.3%, from the prior-year period[164]. - For the thirty-nine weeks ended November 1, 2025, net loss from continuing operations was $(35.3) million, an increase of $21.9 million from $(13.4) million in the prior-year period[183]. Revenue Breakdown - VB Direct segment net revenues were $49.7 million, a decrease from $52.5 million, while VB Indirect segment revenues fell to $12.6 million from $18.0 million[156]. - For the thirteen weeks ended November 1, 2025, net revenues in the VB Direct segment decreased by $2.8 million, or 5.3%, to $49.7 million from $52.5 million in the prior-year period[158]. - VB Indirect segment net revenues decreased by $5.4 million, or 30.2%, to $12.6 million from $18.0 million in the prior-year period, primarily due to a decrease in specialty and key account orders[160]. - VB Direct segment net revenues for the thirty-nine weeks ended November 1, 2025, decreased by $27.9 million, or 15.4%, to $153.3 million, with comparable sales decreasing by 16.1%[172]. Expenses and Profitability - Selling, general, and administrative expenses (SG&A) were $38.7 million, accounting for 62.1% of net revenues, compared to $46.7 million or 66.3% in the prior year[155]. - Selling, General, and Administrative (SG&A) expenses decreased by $8.0 million, or 17.2%, to $38.7 million, with SG&A as a percentage of net revenues decreasing to 62.1% from 66.3%[162]. - Gross profit for the thirteen weeks ended November 1, 2025, decreased by $12.2 million, or 31.8%, to $26.2 million, with gross margin decreasing to 42.1% from 54.5% in the prior-year period[161]. - Gross profit for the thirty-nine weeks ended November 1, 2025, decreased by $34.7 million, or 29.1%, to $84.5 million, with gross margin decreasing to 45.7% from 51.3%[174]. Cash Flow and Financing - Net cash used in operating activities for the thirty-nine weeks ended November 1, 2025, was $27.3 million, a decrease from $35.8 million for the same period in 2024, primarily due to a net loss of $(50.5) million, which increased by $35.7 million year-over-year[188]. - Net cash used in investing activities was $2.0 million for the thirty-nine weeks ended November 1, 2025, down from $6.1 million in the prior year, attributed to $1.0 million proceeds from the sale of Pura Vida and a $3.0 million decrease in property, plant, and equipment spending[190]. - Net cash provided by financing activities was $9.8 million for the thirty-nine weeks ended November 1, 2025, compared to net cash used of $21.9 million in the prior year, mainly due to no common stock repurchases in the current year versus $21.2 million in the prior year[191]. - As of November 1, 2025, the Company had $10.0 million in borrowings outstanding and $65.0 million available under the Credit Agreement, compared to no borrowings and $75.0 million availability as of February 1, 2025[194]. - The Credit Agreement allows for an increase in the aggregate principal amount by up to $50.0 million, providing flexibility for financing general corporate purposes[192]. Strategic Initiatives and Market Conditions - The company is focusing on five key strategic initiatives to enhance brand focus, digital ecosystem, outlet strategy, go-to-market processes, and organizational structure[138][140][142]. - The company is actively managing the impact of elevated tariff costs and ongoing inflationary pressures affecting consumer discretionary spending[143]. - Comparable sales, including e-commerce, decreased by 5.8% for the thirteen weeks ended November 1, 2025, compared to a decrease of 27.2% in the prior year[156]. - The company completed the sale of Pura Vida on March 31, 2025, which was classified as discontinued operations[146]. - The total number of stores open at the end of the period was 117, with one store closed during the thirteen weeks[156]. - The effective tax rate for the thirteen weeks ended November 1, 2025, was (0.5)%, compared to (63.8)% for the prior-year period, primarily due to a full valuation allowance against net deferred tax assets[169]. - The Company has not experienced any material changes in market risks as of November 1, 2025[200]. - There were no material changes to cash requirements outside the ordinary course of business as of November 1, 2025[195]. - The Company reported a loss on the sale of business of $15.2 million, impacting cash flow from operating activities[188]. - The inventory reserve charge was $5.9 million, contributing to the changes in cash used in operating activities[188].