Vera Bradley swings to quarterly profit amid restructuring
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Fort Wayne-based Vera Bradley Inc. is reporting fiscal second quarter net income of $9.3 million, compared to a loss of $29.8 million during the same period last year.
CEO Jackie Ardrey says the switch to profitability is the result of continued efforts of the company’s Project Restoration initiative launched earlier this year.
“We are very pleased with the meaningful year-over-year improvement in second quarter earnings, driven by significant gross margin expansion and successful expense reduction efforts,” Ardrey said in a news release. “During the quarter, we carefully managed our debt-free balance sheet, adding to our cash position while continuing to strategically improve our inventory position.”
Ardrey said one of the company’s key goals in what she previously referred to as a “rebuilding year” is to stabilize revenues.
“We continue to make progress on that front, with second quarter consolidated revenues of $128.2 million only modestly below last year,” she said.
The 1.2% revenue decline in the second quarter, according to Ardrey, can be partially attributed to store closures over the last year, but the return of the Vera Bradley Annual Outlet Sale offset some weakness the company saw in its factory outlet stores.
The company permanently closed 19 full-line and two factory outlet stores and opened three factory outlet stores over the last 12 months, according to the company’s Q2 earnings report.
Vera Bradley’s Pura Vida brand, the jewelry and accessories brand acquired by Vera Bradley in 2019, saw a 3.6% decline in year-over-year sales, which Ardrey said was primarily due to a shortfall in wholesale revenues. She said the company believes that will improve in the second half of the year.
“In general, at both brands, customers have responded enthusiastically to our collaborations and to our product offerings when they are innovative and trend-right, even as they have been more selective in their discretionary spending in light of the current macro environment,” said Ardrey.
Project Restoration was launched as a means to return Vera Bradley to profitability with a focus on four key pillars: consumer, brand, product, and channel. Previous moves made as part of the restructuring have included efforts to cut nearly $40 million in costs—dating back to the previous fiscal year—that saw the elimination of nearly 30 corporate positions.
“Through the first half of Fiscal 2024, we have progressed as expected,” said Ardrey. “We anticipate execution of Project Restoration will drive this long-term profitable growth and deliver value to our shareholders.”
You can connect to the full earnings report by clicking here.