Vera Bradley's Q4 Highlights: Earnings Beat, 1.7% Top-Line Decline, Margin Pressure, Mixed Outlook & More

  • Vera Bradley, Inc. VRA reported a fourth-quarter FY23 revenue decline of 1.7% year-over-year to $147.09 million, beating the consensus of $137.51 million.
  • Adjusted EPS was $0.16, nearly flat with last year, beating the estimate of $0.15.
  • Gross margin contracted 1,009 basis points Y/Y to 40.8%, negatively affected by higher inbound and outbound freight expense and increased promotional activity, partially offset by price increases.
  • Adjusted SG&A expense was $64.4 million, or 43.8% of net revenues, compared to $67.1 million, or 44.8% of net revenues in 4Q22.
  • Adjusted operating income was $7 million (-23.1% Y/Y) with an operating margin of 4.8%, compared to 6.1% in the prior year.
  • The company held $46.6 million in cash and equivalents as of Jan. 28, 2023, and no debt.
  • During the quarter, the company repurchased ~$0.8 million of its shares, which brings the fiscal total to $18.1 million. VRA's $50 million share repurchase authorization expires in December 2024.
  • "We anticipate the Fiscal 2024 macroeconomic environment to continue to be unpredictable and that this year will be a rebuilding year for both of our brands. We expect to take advantage of gross margin improvement opportunities and manage our expense structure diligently", commented CEO Jackie Ardrey.
  • FY24 Outlook: Vera Bradley is not providing detailed guidance for the first fiscal quarter of 2024 but expects revenues and loss per share to be approximately in line with the prior year.
  • VRA sees FY24 revenues of $490 million - $510 million, compared to a consensus of $507.77 million. It sees EPS of $0.40 - $0.50 vs. consensus of $0.35.
  • It expects a consolidated gross profit percentage of 52.6% - 53.6%, operating income of $17.3 million - $21.7 million, and Free cash flow of $25 million - $30 million.
  • Price Action: VRA shares are trading higher by 5.70% at $5.75 on the last check Wednesday.
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Posted In: EarningsNewsGuidanceBriefs
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