Dive Brief:
- Vera Bradley Inc.’s consolidated second-quarter net revenue decreased 1.7% year over year to $128.2 million, according to a company press release Wednesday.
- Vera Bradley Inc. reported a quarterly net income of $9.3 million compared to a loss of $36.9 million the year before. Meanwhile, operating income was $12.9 million, compared to a $42.8 million loss in the year-ago quarter, while inventory dropped 22.4% year over year. The company narrowed its fiscal 2024 outlook, now expecting net revenues between $490 million and $500 million instead of a previously expected top range of $510 million.
- The Vera Bradley brand — which sells bags, home goods, apparel and more — saw revenue decline 1.2% to $103 million, with direct revenue impacted by 19 full-line stores and two factory outlets being closed over the past year. Jewelry brand Pura Vida’s sales declined 3.6% to $25.1 million mainly due to a drop in wholesale revenue, which the company expects to improve in the second half of the year.
Dive Insight:
Vera Bradley’s sales decline comes as the company undergoes a transformation plan.
“Our transformational efforts continue to bear fruit and are the result of the hard work of our associates across the country,” CEO Jackie Ardrey said in a statement. “We are very pleased with the meaningful year-over-year improvement in second quarter earnings, driven by significant gross margin expansion and successful expense reduction efforts. During the quarter, we carefully managed our debt-free balance sheet, adding to our cash position while continuing to strategically improve our inventory position.”
As part of the company’s Project Restoration plan, the Vera Bradley brand is being strategically marketed as a feminine fashionable brand in order to restore brand relevancy, Ardrey said on a call with analysts Wednesday.
“For the product, we are refocusing on core categories and items we are best at by continually innovating and expanding within our core products,” Ardrey said. “Over the next 12 months, we will elevate our colorful feminine heritage keeping it distinctive but more trend-relevant through updated print and design.”
The results follow news in April that Vera Bradley’s John Enwright would step down as CFO due to a reorganization. Michael Schwindle took over the role, effective May 8. In an effort to reduce costs, the company also announced it would eliminate about two dozen corporate jobs.
The Vera Bradley brand in June extended its limited-edition collaboration with Tupperware with new food and drinkware containers. Ardrey said on the call that the brand’s Hello Kitty collaboration in June was a “great success” and it is enthusiastic about its National Football League collaboration launched in August.
“Product collaborations are an important part of our brand expression,” Ardrey said. “We will continue to pursue high-profile collaborations like Hello Kitty, Shark Week and Harry Potter that are always fan favorites and bring new customers to the brand.”
