Vera Bradley Announces Second Quarter Fiscal Year 2026 Results

Core Insights - Vera Bradley, Inc. reported financial results for the second quarter of fiscal year 2026, showing a net revenue of $70.9 million, a decrease from $94.0 million in the same quarter last year [6][8] - The company experienced a net loss from continuing operations of $4.7 million, or $0.17 per diluted share, compared to a net income of $7.5 million, or $0.25 per diluted share in the prior year [7][8] - The company is focusing on revitalizing its market position through product innovation and strategic merchandising, aiming to re-engage its customer base and expand into new market segments [5][12] Financial Performance Summary - Consolidated net revenues for the second quarter were $70.9 million, down from $94.0 million in the prior year [6] - The net loss from continuing operations for the current year second quarter was ($4.7) million, compared to a net income of $7.5 million in the prior year [7][8] - For the six-month period, consolidated net revenues totaled $122.5 million, down from $162.0 million in the prior year [9] Segment Performance - Direct segment revenues decreased by 16.2% to $60.5 million from $72.2 million in the prior year [12] - Indirect segment revenues saw a significant decline of 52.5%, totaling $10.3 million compared to $21.8 million in the prior year [13] - Comparable sales declined by 17.3% in the second quarter, primarily due to conversion declines across various channels [12] Gross Profit and Margins - Gross profit for the second quarter was $35.5 million, representing 50.1% of net revenues, compared to 49.7% in the prior year [14] - The gross margin improved sequentially by 600 basis points over the first quarter, aided by a favorable product sales mix [14] Operating Expenses - Selling, general, and administrative (SG&A) expenses totaled $40.4 million, or 57.1% of net revenues, compared to $44.4 million, or 47.3% in the prior year [15] - On a non-GAAP basis, SG&A expenses were $36.3 million, or 51.2% of net revenues, down from $43.6 million, or 46.4% in the prior year [15] Operating Loss - The operating loss from continuing operations for the second quarter was ($4.6) million, or (6.5%) of net revenues, compared to an operating income of $2.4 million, or 2.5% in the prior year [16] - On a non-GAAP basis, the operating loss was ($0.6) million, or (0.8%) of net revenues, compared to an operating income of $3.3 million, or 3.5% in the prior year [16] Balance Sheet Highlights - Cash and cash equivalents as of August 2, 2025, totaled $15.2 million, down from $29.3 million at the end of the prior year's second quarter [23] - Total quarter-end inventory was $96.7 million, compared to $111.4 million at the end of the prior year's second quarter [24] Strategic Initiatives - The company is making adjustments to product design and assortment, bringing back iconic styles and introducing new designs [3] - A comprehensive strategy is being implemented to leverage the brand's emotional connection with consumers, focusing on strategic merchandising, product innovation, and targeted marketing [5]