Vera Bradley swings to loss
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Fort Wayne-based Vera Bradley Inc. (Nasdaq: VRA) is reporting a fiscal second quarter net loss of $29.8 million, compared to net income of $9.1 million during the same period last year. Although total revenues fell short of expectations, Chief Executive Officer Rob Wallstrom says the company continued to drive product innovation, initiated cost reductions, and completed $6 million of share repurchases during the quarter.
Last month, Wallstrom announced cost-cutting measures, as well as his plans to step down from his role as president and CEO. Wallstrom, who has served as CEO since 2013, will retire when a replacement is named next year.
Wallstrom says inflationary pressures, including higher gas prices, continued to negatively impact purchases by customers with lower household incomes, as well as traffic and spending at Vera Bradley factory stores.
“We are continuing to see bifurcation in the spending of our customer base,” said Wallstrom. “At Vera Bradley, Direct Full-Price Channel comparable revenues were nearly flat to last year and up double digits to fiscal 2020 as customers with higher household incomes remained engaged and continued to spend. Our Vera Bradley Indirect Channel continued to experience a healthy year-over-year rebound. Pura Vida’s ecommerce revenues continued to be affected by the shift in social and digital media effectiveness and escalating digital media costs.”
According to Wallstrom, the company plans to continue to optimize the travel category, as well as maximize back-to-campus opportunities with “strategic assortment enhancements.” Wallstrom says the company will also continue its product collaborations and expand its footwear and home assortments this fall.
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