Vera Bradley(VRA) - 2026 Q4 - Annual Report

Financial Performance - For fiscal 2026, net revenues decreased by $49.1 million, or 15.4%, to $269.7 million from $318.8 million in fiscal 2025[228] - VB Direct segment revenues decreased by $29.8 million, or 11.6%, to $227.8 million, with comparable sales down by $28.6 million, or 11.6%[229] - VB Indirect segment revenues decreased by $19.3 million, or 31.5%, to $41.9 million, primarily due to a decline in specialty and key account orders[231] - Gross profit for fiscal 2026 was $125.0 million, representing 46.4% of net revenues, down from 49.8% in fiscal 2025[226] - For fiscal 2026, gross profit decreased by $33.8 million, or 21.3%, to $125.0 million, with a gross profit margin of 46.4% compared to 49.8% in fiscal 2025[232] - Operating loss from continuing operations increased by $3.1 million, or 10.8%, to $(31.9) million, with an operating loss margin of (11.8)% for fiscal 2026[235] - Net loss from continuing operations decreased by $0.7 million, or 2.1%, to $(32.7) million for fiscal 2026[242] - Loss from discontinued operations decreased by $13.6 million, or 47.4%, to $(15.2) million in fiscal 2026[243] - Total net loss decreased by $14.3 million, or 23.1%, to $(47.8) million for fiscal 2026[244] Expenses and Cost Management - Selling, general, and administrative expenses (SG&A) were $158.1 million, or 58.6% of net revenues, compared to 59.1% in fiscal 2025[226] - SG&A expenses for fiscal 2026 decreased by $30.4 million, or 16.1%, to $158.1 million, representing 58.7% of net revenues, down from 59.1% in fiscal 2025[233] - The company implemented strategic price increases in late fiscal 2022 through fiscal 2024 and continued in fiscal 2026 to mitigate inflationary pressures[223] Store Operations - The company closed 12 underperforming full-line stores and one outlet store, ending the fiscal year with 29 full-line and 86 outlet locations[214] - Comparable sales, including e-commerce, decreased by 11.6% in fiscal 2026, following a 16.6% decrease in fiscal 2025[227] Cash Flow and Financial Flexibility - Net cash used in operating activities was $10.0 million in fiscal 2026, a decrease from $14.1 million in fiscal 2025, primarily due to a $14.3 million decrease in net loss[264] - Net cash used in investing activities was $1.5 million in fiscal 2026, down from $10.4 million in fiscal 2025, attributed to a $7.1 million reduction in spending on property, plant, and equipment[266] - Net cash used in financing activities decreased to $0.2 million in fiscal 2026 from $22.5 million in fiscal 2025, mainly due to a $21.8 million reduction in common stock repurchases[267] - The company has no debt outstanding under its $75.0 million asset-based revolving credit agreement as of January 31, 2026, providing additional financial flexibility[260] - As of January 31, 2026, the company had no borrowings outstanding under its Credit Agreement and had availability of $58.6 million[270] Strategic Initiatives - The company is focusing on Project Sunshine to enhance market position and streamline operations, aiming for improved agility and customer experience[210] - The macroeconomic environment has been challenging, with inflationary pressures impacting consumer discretionary spending and increasing digital media costs[220] Impairments and Adjustments - The company recorded impairment charges of $1.0 million in fiscal 2026, compared to $2.4 million in fiscal 2025[277] - The balance of inventory adjustments was $6.0 million as of January 31, 2026, compared to $0.7 million for the prior fiscal year[276] - The company recorded a loss on the sale of business amounting to $15.2 million during fiscal 2026[264] Foreign Exchange and Funding - The company has not been materially impacted by changes in foreign exchange rates, as purchases and sales are primarily denominated in U.S. dollars[280] - The company expects to fund material cash requirements using cash on hand, cash from operations, and borrowings under the Credit Agreement[271]