Vera Bradley Stumbles on Weak Guidance

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Vera Bradley Inc. (NASDAQ: VRA) released its most recent earnings report before the markets opened on Wednesday. The company posted $0.20 in earnings per share (EPS) and $126.7 million in revenue. The Thomson Reuters consensus estimates were EPS of $0.23 and $129.55 million in revenue. In the same period of last year, the handbag maker posted $0.27 in EPS and revenue of $126.67 million.

Current year third-quarter Direct segment revenues totaled $86.1 million, a 2.3% increase over $84.1 million in the prior year third quarter. Comparable sales decreased 5.0% for the quarter (reflecting a 5.3% decline in comparable store sales and a 4.4% decrease in e-commerce sales), which was more than offset by new store growth.

At the same time, Indirect segment revenues decreased 4.6% to $40.6 million from $42.5 million in the prior year third quarter, primarily due to lower orders from the Company’s specialty retail accounts.

In terms of the fourth-quarter outlook, the company expects to have EPS in the range of $0.23 to $0.25 and net revenues between $135 million and $140 million. The consensus estimates call for $0.47 in EPS and $158.78 million in revenue.

On the books, Vera Bradley cash, cash equivalents and short-term investments totaled $83.0 million at the end of the quarter, up from to $61.8 million last year’s third quarter.

CEO Robert Wallstrom commented:

The third fiscal quarter was an important one for our Company with the launch of Vera Bradley’s new brand positioning, supported by our comprehensive marketing initiatives and the opening of our new SoHo flagship store.  We are pleased with improved consumer engagement driven by these initiatives.

Shares of Vera Bradley were last seen down about 7% at $13.66 on Wednesday, with a consensus analyst price target of $18.83 and a 52-week trading range of $12.11 to $20.69.

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