UPDATE: Vera Bradley Issues Downbeat Outlook, Shares Tumble

Shares of Vera Bradley

tumbled more than 14% in pre-market trading after the company reported downbeat quarterly sales and lowered its outlook for the year. Vera Bradley's quarterly net income fell to $6.6 million, or $0.16 per share, versus $9.2 million, or $0.23 per share, in the year-ago quarter. Its sales dropped to $113.5 million from $123.0 million. However, analysts were expecting earnings of $0.13 per share on revenue of $118 million. Total comparable store sales slipped 9.4%, including a 14.4% drop in store sales and a 3.2% fall in e-commerce sales. Direct segment revenue declined to $73.4 million from $73.7 million, while indirect segment revenue fell 18.9% to $40.0 million from $49.3 million. Robert Wallstrom, Chief Executive Officer, said, "While our first quarter revenues were modestly below our expectations, we were able to post earnings per share above our guidance due to better than expected gross margin and expense performance." Vera Bradley now expects Q2 earnings of $0.18 to 0.20 per share on sales of $113 million to $120 million. However, analysts expected earnings of $0.30 per share on sales of $127.50 million. It also projects FY15 earnings of $1.00 to $1.10 per share on sales of $510 million to $530 million. However, analysts estimated a profit of $1.26 per share on sales of $553.60 million. The executive continued, "However, we continue to face a difficult environment, one that is proving much more challenging than we anticipated just two short months ago," Vera Bradley shares dropped 14.06% to $21.70 in pre-market trading.