Plus   Neg

Vera Bradley Profit Falls, Yet Tops View; Cuts FY Outlook; Stock Down - Update

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%.

For comments and feedback contact: editorial@rttnews.com

Business News

Editors Pick
Commerzbank AG (CRZBY.PK) said Friday that it plans to cut 4,300 jobs, as part of its strategy. It also plans to sell its majority stake in mbank S.A. It is considering making a purchase offer to Comdirect's outstanding shareholders. Walmart, which has said its goal is to become America's neighborhood health destination, is hosting a free wellness event in its stores across the country on Saturday, September 21. The "Walmart Wellness Day" event will held be from 10 a.m. to 2 p.m. at more than 4,600 Walmart stores with pharmacies. Customers can visit these stores to get free health screenings and low-cost flu shots. Exploding Kittens Inc. recalled 11,235 units of safety goggles sold with Throw Throw Burrito Extreme Going Pro Edition Dodgeball Card Game sets for concerns of laceration hazard if shattered. These include 735 units sold in Canada, a statement published by the U.S. Consumer Product Safety Commission said.