Women's accessory retailer Vera Bradley Inc. (VRA), Wednesday reported a decline in first-quarter profit, hurt mainly by a drop in operating margins that offset a five percent growth in sales. Nonetheless, both earnings and revenue for the quarter came in ahead of Wall Street estimates.
Moving forward, Vera Bradley detailed a weak guidance for the second quarter and slashed its outlook for fiscal year 2014. Shares of the company slid about 8 percent in after-hours trade on the Nasdaq.
Vera Bradley designs women's handbags and accessories, luggage and travel items, eyewear, stationery and gifts.
The Fort Wayne, Indiana-based company reported quarterly net income of $9 million or $0.23 per share, down from $12.6 million or $0.31 per share last year. On average, 11 analysts polled by Thomson Reuters expected earnings of $0.21 per share for the quarter.
Sales for the first quarter climbed to $123 million from $117 million in the prior year. Analysts on consensus estimated revenues of $121.01 million for the quarter.
In the Direct segment, sales grew 24 percent to $73.7 million, on growth across all channels. Comparable store sales edged up 0.9 percent. Improved website traffic helped e-commerce sales to surge 23 percent.
Indirect revenues meanwhile slid 15 percent to $49.3 million, due to cautious ordering from its specialty retailers.
Results were impacted by operating margin that slid to 12.3 percent from 17.8 percent a year ago.
For the second quarter, Vera Bradley expect earnings in the range of $0.31 to $0.33 per share on sales of $123 million to $126 million. Analysts currently expect earnings of $0.39 per share on sales of $136.20 million for the second quarter.
For fiscal year 2014, the company now projects earnings of $1.74 to $1.78 per share on sales of $570 million to $575 million. Earlier, Vera Bradley expected earnings of $1.83 to $1.88 per share on sales of $585 million to $590 million.
Analysts expect earnings of $1.81 per share on sales of $591.12 million for 2014.
Additionally, Vera Bradley also announced its Chief Executive Officer Michael Ray plans to retire from the company. The company's Board has formed a search committee and retained Spencer Stuart to assist in the replacement process. Ray will remain CEO through the transition period and plans to continue as a director. Ray has served as CEO of Vera Bradley since October 2007.
Vera Bradley shares closed Wednesday at $22.46, down 0.22%, on a volume of 0.9 million shares. In after hours, the stock dropped $1.83 or 8.15%.
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