JP Morgan Reiterates Neutral, $35 Target on Vera Bradley
JP Morgan maintains its Neutral rating and $35 target price on Vera Bradley (NASDAQ: VRA) as company missed gross margin estimates and comps decelerated.
JPM says, “GMs came in down 220bps during the quarter (vs. expectations for flat) as opportunistic sales of retired inventory and lower supply chain absorption weighed on profitability. The off-price sales to TJMaxx and HomeGoods were said to be $3-4 million and negatively impacted margins by 140bps. Based on that math, we estimate that the sales were done at a ~10% margin (vs. 55% traditional wholesale margin).”
VRA closed at $37.16 per share on Tuesday.
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