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A Turnaround Is Coming At Vera Bradley

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A Turnaround Is Coming At Vera Bradley
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Bagging The Paisleys: Wunderlich's Bullish Thesis On Vera Bradley And PVH
Earnings Scheduled For March 8, 2017

Vera Bradley, Inc. (NASDAQ: VRA) is scheduled to announce its F1QY17 results on June 1. Wunderlich’s Eric Beder reiterated a Buy rating for the company, with a price target of $24. The analyst commented that while 1Q is unlikely to have been “the breakout quarter,” the company should report solid results.

Analyst Eric Beder said Vera Bradley’s 1Q performance is likely to have been impacted by its small size and continued weakness in the online segment. On the other hand, other handbag companies had reported strong results, driven by margin expansion and improving comps.

The industry’s focus has been shifting from market share to returns, and this shift offers Vera Bradley the opportunity to report solid margins, Beder stated. He added, “Company specific, we believe the shift to more non-cotton items continues to resonate, while higher margin focuses at the outlets and online should be key positives.”

Looking Ahead

The analyst expects management to announce a conservative guidance for 2Q, despite some key positives. He expects the online segment to return to positive top-line momentum in 2Q as well as the company's shift to less cotton product to drive solid store results.

“…with the overall handbag market stabilizing and focusing on higher returns and offering a materially more compelling and varied assortment, that the pieces are in place for a strong quarter and for management to reiterate that the turn is building,” Beder wrote. He further mentioned that the risk/reward for the stock was compelling.

Latest Ratings for VRA

DateFirmActionFromTo
Oct 2016KeyBancDowngradesOverweightSector Weight
Apr 2016Cowen & Co.MaintainsMarket Perform
Mar 2016WunderlichUpgradesHoldBuy

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Posted-In: Eric Beder WunderlichAnalyst Color Long Ideas Reiteration Analyst Ratings Trading Ideas

 

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