Vera Bradley CEO Says Turnaround is Bearing Fruit

Dow Jones
6 hours ago
 

Vera Bradley's turnaround is bearing fruit, Chief Executive Ian Bickley said, pointing to the company's continued sales growth and strong back-to-school season.

The handbags-and-accessories designer on Tuesday said sales ticked up roughly 1%, to $71.6 million, in the latest quarter. The increase marked Vera Bradley's second consecutive quarter of overall revenue growth and came after the company said in June that its turnaround had reached an inflection point.

"While the pace of growth was more modest than the nearly 8% we delivered last quarter, the underlying health of the business continued to strengthen across our direct channels, our margin structure and our balance sheet," Bickley said on a call with analysts Tuesday.

Shares jumped 31%, to $3.98, in afternoon trading, after Vera Bradley swung to a fiscal second-quarter profit. The company said the sales momentum has so far continued in the current quarter, while reaffirming its full-year revenue outlook.

Vera Bradley's direct-to-consumer sales--which Bickley said are the best indicator of how customers are responding to the company's product, marketing and strategic distribution choices--were up 8% to $65.4 million. The increase marked the fifth consecutive quarter of sequential improvement in the channel.

Comparable sales across the direct-to-consumer channel, including both brick-and-mortar and digital, were up 9.2%.

Sales accelerated as the quarter progressed, resulting in a stronger-than-expected back-to-school season. Vera Bradley is benefiting from its refreshed product assortment, a stepped-up marketing strategy, improved inventory management, and disciplined pricing and promotion governance, Bickley said.

Those turnaround actions have helped boost profitability as well, he added. An unexpected tariff refund also provided a lift to the company's bottom line.

Vera Bradley swung to a profit of $4.5 million, or 15 cents a share, for its quarter ended Aug. 1, compared with a loss of $4.67 million, or 17 cents a share, a year earlier. On an adjusted basis, quarterly earnings came out to 11 cents a share.

Looking ahead, the company continues to expect revenue of $255 million to $270 million for the year.

 
 

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