Vera Bradley reports net loss of 1.9 mn dollars in H1

Vera Bradley’s net revenues totalled 208.6 million dollars for the six months to July 29, 2017 compared to 224.4 million dollars in the same period, last year. For the current year six months, the company posted a net loss of 1.9 million dollars or 0.05 dollar per diluted share compared to 7.5 million dollars or 0.20 dollar per diluted share, for the same period last year. On a non-GAAP basis, the company's net income totalled 1.4 million dollars or 0.04 dollar per diluted share compared to 9.1 million dollars or 0.24 dollar per diluted share, for the prior year six months.

Commenting on the first half results, Robert Wallstrom, the company’s CEO said in a media release: "Although comparable sales trends improved over those in the first quarter, challenges in the retail environment continued into the second quarter. Our second quarter net income per share of 0.13 dollar exceeded guidance, primarily due to diligent expense management."

Second quarter net revenues in line with expectations

The company said, current year second quarter net revenues of 112.4 million dollars were in line with the company's guidance range of 111 million dollars to 115 million dollars. Prior year second quarter revenues totalled 119.2 million dollars.

Direct segment revenues for the quarter totalled 89.3 million dollars, a 2.4 percent increase over 87.2 million dollars in the prior year second quarter. Comparable sales including e-commerce decreased 4.3 percent, reflecting a 4 percent decline in comparable store sales and a 4.9 percent decrease in e-commerce sales, which was more than offset by new store growth. The company opened two full-line and five factory outlet stores during the past 12 months.

Indirect segment revenues decreased 27.9 percent to 23.1 million dollars from 32 million dollars in the prior year second quarter, reflecting a reduction in the number of specialty accounts coupled with a reduction in orders from both specialty accounts and certain key accounts.

Direct segment revenues for the current year six month period totalled 158.2 million dollars, a 1.3 percent decrease from 160.2 million dollars in the prior year. Comparable sales including e-commerce decreased 7.8 percent for the period reflecting a 5.6 percent decline in comparable store sales and a 12.9 percent decrease in e-commerce sales, which was partially offset by new store growth. The company opened two full-line and five factory outlet stores during the past 12 months. Indirect segment revenues for the six months decreased 21.6 percent to 50.4 million dollars from 64.2 million dollars in the prior year.

Gross profit for the quarter totalled 63.3 million dollars or 56.3 percent of net revenues, compared to 68.4 million dollars or 57.4 percent of net revenues, in the prior year second quarter. Gross profit for the six months totalled 116 million dollars or 55.6 percent of net revenues, compared to 128 million dollars or 57.1 percent of net revenues, in the prior year.

Third quarter and fiscal year 2018 outlook

For the third quarter, the company expects net revenues of 112 million dollars to 117 million dollars compared to prior year third quarter revenues of 126.7 million dollars, a gross profit percentage of 57.1 percent to 57.6 percent compared to 57.6 percent in the prior year third quarter and diluted earnings per share of 0.13 to 0.15 dollar. Net income totalled 8.8 million dollars or 0.24 dollar per diluted share, in the prior year third quarter.

For fiscal 2018, the company expects, net revenues of 460 million to 470 million dollars compared to 485.9 million dollars last year, a gross profit percentage of 55.5 percent to 56 percent compared to 56.8 percent last year and diluted earnings per share of 0.44 to 0.50 dollar. Diluted earnings per share totalled 0.53 dollar last year.

Picture:Vera Bradley website