Vera Bradley Crushes Q3 Earnings, Offers Solid Guidance

By Chris Lange Updated Jan 13, 4:17PM EST · Published Dec 9, 11:05AM EST

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Vera Bradley Crushes Q3 Earnings, Offers Solid Guidance — © Thinkstock

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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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.