Vera Bradley Tops Q2 Expectations, Shares Jump

Shares of

jumped over 21 percent in pre-market trading after the company reported better-than-expected results for the second quarter and issued a strong outlook. The Roanoke, Indiana-based company posted quarterly net income of $5.7 million, or $0.15 per share, compared to $7.6 million, or $0.19 per share, in the year-ago quarter. Its revenue from continuing operations increased to $120.7 million from $119 million. However, analysts were expecting a profit of $0.11 per share on revenue of $114.99 million. The average estimate among 6 Estimize users was for earnings of $0.09 per share and revenue of $113.87 million. Direct segment revenue rose 7.7 percent year-over-year to $83.8 million in the latest quarter, while indirect segment revenue dropped 10.3 percent to $36.9 million. Comparable sales, including e-commerce slipped 15.0 percent in the quarter. Gross profit increased to $66.6 million, or 55.1 percent of net revenue for the latest quarter, from $63.4 million, or 53.3 percent of net revenue. As of August 1, 2015, cash and cash equivalents totaled $76.0 million, versus $79.1 million at the end of year-ago quarter. Robert Wallstrom, Chief Executive Officer, said, "We are pleased that better than expected revenue, gross margin rate performance, and disciplined expense management drove EPS above our guidance. Wallstrom added, "We have made meaningful progress but know our turnaround will take time. We remain confident in our long-term strategic plan and believe that continuing to innovate and modernize our product offerings, prudently grow our distribution points, and elevate and target our marketing efforts will, over time, bring new customers to Vera Bradley and drive traffic and sales." For the current quarter, Vera Bradley projects revenue of $120 million to $123 million, versus analysts' estimates of $117.2 million. The company expects Q3 from continuing operations of $0.19 to $0.21 per share, versus analysts' expectations of $0.15 per share. For the full year, the company expects earnings of $0.72 to $0.78 per share, on revenue of $487 million to $495 million. Vera Bradley shares climbed 21.53 percent to $12.70 in pre-market trading.