Vera Bradley Inc. (NASDAQ: VRA) reported its fiscal third-quarter financial results before the markets opened on Wednesday. The company had $0.27 in earnings per share (EPS) on $126.7 million in revenue. Thomson Reuters consensus estimates had called for $0.20 in EPS on revenue of $121.14 million. In the same period of the previous year, the company posted EPS of $0.21 and $125.20 million in revenue.

Direct segment revenues totaled $84.1 million, a 7.9% increase from $77.9 million in the prior year third quarter. Comparable sales decreased 9.5% for the quarter but were offset by new store growth. Third quarter comparable sales were negatively impacted by year-over-year declines in store and e-commerce traffic, largely resulting from reduced promotional activity.

In terms of the indirect segment, revenues decreased 10% to $42.5 million from $47.3 million last year, primarily due to lower average order size from the company’s specialty retail accounts and a modest year-over-year reduction in the total number of specialty retail accounts.

Looking ahead to the fiscal fourth quarter, Vera Bradley expects EPS in the range of $0.40 to $0.43 and net revenues in the range of $151 million to $155 million. The consensus estimates call for $0.39 in EPS on $149.18 million in revenue.

Robert Wallstrom, CEO of Vera Bradley, commented on earnings:

We are pleased that better than expected revenue and gross profit percentage performance, along with disciplined expense management, drove EPS well above our guidance, despite a rather challenging retail environment.

He added:

We are most proud of our year-over-year 540 basis point gross profit percentage improvement in the quarter, largely driven by various sourcing efficiencies, our made-for-outlet products, and reduced promotional activity. In our full-line stores and on verabradley.com, we eliminated our hyper-promotions of 60% to 70% off and pared back our promotional days by approximately 50% during the third quarter.

Shares of Vera Bradley soared Wednesday morning, up 34% at $15.66, in a 52-week trading range of $9.21 to $23.44. The consensus analyst price target is $13.50.

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