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Jul 29, 2023
Vera Bradley Q2 2024 Earnings Report
Achieved meaningful year-over-year improvement in earnings due to gross margin expansion and expense reduction.
Key Takeaways
Vera Bradley, Inc. reported consolidated net revenues of $128.2 million for the second quarter of fiscal year 2024. The company's net income totaled $9.3 million, or $0.30 per diluted share, and non-GAAP net income totaled $10.2 million, or $0.33 per diluted share. The balance sheet was strengthened with cash and cash equivalents of $48.5 million and inventories down 22.4% year-over-year.
Consolidated net revenues totaled $128.2 million.
Net income totaled $9.3 million, or $0.30 per diluted share; non-GAAP net income totaled $10.2 million, or $0.33 per diluted share.
The balance sheet strengthens, with cash and cash equivalents of $48.5 million, no debt, and year-over-year inventories down 22.4%.
Total second quarter revenues for the Vera Bradley brand were down 1.2% from last year.
Vera Bradley
Vera Bradley
Vera Bradley Revenue by Segment
Revenue by Segment
VB Direct Revenue
CapyFin.comVB Indirect Revenue
CapyFin.com Forward Guidance
Management is updating certain components of guidance for the fiscal year ending February 3, 2024, based on first half performance, Company initiatives underway, and current macroeconomic trends and expectations. The Company has narrowed the guidance range for diluted earnings per share.
Positive Outlook
- Consolidated net revenues of $490 to $500 million.
- A consolidated gross profit percentage of 53.0% to 53.8% compared to 51.4% in Fiscal 2023. The Fiscal 2024 gross profit rate is expected to be favorably impacted by lower year-over-year freight expense, cost reduction initiatives, and the sell-through of previously-reserved inventory, partially offset by an increase in promotional activity.
- Consolidated SG&A expense of $237 to $243 million compared to $245.3 million in Fiscal 2023. An expected decline in SG&A expense is being driven by Company-wide cost reduction initiatives, partially offset by restoring short-term and long-term incentive compensation to more normalized levels and incremental marketing investment intended to accelerate customer file growth.
- Consolidated operating income of $24 to $28 million compared to $12.3 million in Fiscal 2023.
- Free cash flow of between $40 and $45 million compared to a cash usage of $21.7 million in Fiscal 2023.
Challenges Ahead
- Possible adverse changes in general economic conditions and their impact on consumer confidence and spending
- Possible inability to predict and respond in a timely manner to changes in consumer demand
- Possible loss of key management or design associates or inability to attract and retain the talent required for our business
- Possible inability to maintain and enhance our brands
- Possible inability to successfully implement the Company’s long-term strategic plans
Revenue & Expenses
Visualization of income flow from segment revenue to net income