Vera Bradley Investors Left Holding The Bag After Q3 Sales Miss, Guidance Cut

Vera Bradley, Inc. VRA shares have been on a downward spiral since Wednesday morning after it reported sub-par third-quarter top- and bottom-line performances and reduced guidance.

Sub-Par Q3 Showing

The company reported third-quarter adjusted net income of $0.20 per share compared to $0.27 per share last year. Net revenues were flat at $126.7 million.

Analysts, on average, estimated earnings of $0.23 per share on revenues of $129.55 million.

Continued weakness in the specialty channel and incremental promotional activity in factory stores hurt its bottom line, the company clarified. Additionally, the company said its online store performance lagged due to reduced levels of retirement product.

Guidance Slashed

For the fourth quarter, the company expects earnings of $0.23–$0.25 on net revenues of $135 million to $140 million. The company's full-year guidance calls for adjusted earnings of $0.62–$0.65 per share on revenues of $486 million to $491 million. The guidance is below Street estimates.

The full-year guidance represented a mark down from the previous estimate released along with its second quarter results. At that time, the company had estimated earnings of $0.88–$0.92 per share on revenues of $510 million to $515 million.

Among Peers

• Coach Inc COH reported better-than-expected fiscal first-quarter earnings per share, but its sales were light. Coach said it continues to expect full-year revenue growth to be in the low- to mid-single-digits. The stock rose over 2 percent on November 1, when it released its results.
• Kate Spade & Co KATE reported above-consensus third-quarter earnings per share and revenues for the third quarter and issued in-line full-year guidance. Notwithstanding the performance, the stock tanked over 10 percent on the day of the release but recovered thereafter.
• Michael Kors Holdings Ltd KORS reported in mid-November better-than-expected second-quarter results but trimmed its full-year forecast. The lowered full-year guidance and the third-quarter guidance were below the consensus estimates. The stock fell over 5 percent in reaction to the results.

At Time Of Writing

• Coach was adding 0.42 percent to $37.68.
• Kate Spade was surging up 0.84 percent to $15.53.
• Michael Kors was edging down 0.17 percent at $48.29.
• Vera Bradley was slumping 5.73 percent at $13.83.