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Vera Bradley posts Q2 sales and profit growth

By Prachi Singh

Sep. 1, 2021

Business

Image: Vera Bradley, Facebook

Consolidated net revenues at Vera Bradley Inc. totalled 147 million dollars for the current year second quarter, an increase of 11.6 percent over the prior year second quarter.

Consolidated net income totalled 9.1 million dollars or 26 cents per diluted share, while on a non-GAAP basis, net income totalled 9.5 million dollars or 28 cents per diluted share. For the prior year second quarter, Vera Bradley’s consolidated net income totalled 7.2 million dollars or 42 cents per diluted share.

Commenting on the second quarter results, Rob Wallstrom, the company’s chief executive officer, noted: “The Apple iOS 14.5 update negatively affected Pura Vida revenues, primarily due to the impact it had on the effectiveness of Facebook and Instagram advertising. Second, like much of the industry, at Vera Bradley, we continued to experience supply chain challenges and significantly increased freight and tariff expenses that put meaningful pressure on gross margin in the quarter. We expect these pressures to continue for the moderate term.”

Review of Vera Bradley’s H1 results

The company’s consolidated net revenues totalled 256.1 million dollars for the six months compared to the prior year six-month period ended August 1, 2020.

Consolidated net income for the period totalled 6.9 million dollars or 20 cents per diluted share, while on a non-GAAP basis, net income totaled 7.8 million dollars or 23 cents per diluted share, for the six months. For the prior year’s six months, Vera Bradley’s consolidated net loss totaled 8.1 million dollars or loss of 24 cents per diluted share.

Vera Bradley direct segment revenues 163.9 million dollars, a 38.8 percent increase over the prior year. Vera Bradley indirect segment revenues for the six months totaled 32.1 million dollars, a 10.8 percent increase.

Pura Vida segment revenues totalled 60.2 million dollars, an 11.4 percent increase over 54 million dollars in the prior year.

Consolidated gross profit for the six months totalled 139.5 million dollars or 54.5 percent of net revenues, compared to 113.8 million dollars or 56.6 percent of net revenues, in the prior year. On a non-GAAP basis, prior year gross profit totalled 115.1 million dollars or 57.3 percent of net revenues.

For the six months, the company’s consolidated operating income totalled 10.7 million dollars or 4.2 percent of net revenues, compared to a consolidated operating loss of 8.1 million dollars or 4 percent of net revenues, in the prior year six-month period.

Highlights of Vera Bradley’s Q2 performance

Current year second quarter Vera Bradley direct segment revenues totalled 97.1 million dollars, a 19.6 percent. Vera Bradley indirect segment revenues totaled 16.8 million dollars, a 5.1 percent decrease from the prior year second quarter.

Pura Vida segment revenues totalled 33.1 million dollars, a 0.8 percent increase over 32.8 million dollars in the prior year.

Second quarter consolidated gross profit totalled 80.4 million dollars or 54.6 percent of net revenues, compared to 79.6 million dollars or 60.4 percent of net revenues, in the prior year.

The company’s consolidated operating income totalled 12.6 million dollars or 8.6 percent of net revenues, compared to 17.5 million dollars or 13.3 percent of net revenues, in the prior year second quarter. On a non-GAAP basis, the company’s current year consolidated operating income totalled 13.4 million dollars or 9.1 percent of net revenues, compared to 21.1 million dollars or 16 percent of net revenues, in the prior year.

Vera Bradley expects net revenues in the range of 550 to 564 million dollars for FY22

For fiscal 2022, the company expects consolidated net revenues of 550 to 565 million dollars. Net revenues totalled 468.3 million dollars in fiscal 2021.

Consolidated gross profit percentage is expected of 54.6 percent to 55.3 percent compared to 57 percent in fiscal 2021.

Consolidated operating income is anticipated in the range of 40 to 46 million dollars compared to 34 million dollars in fiscal 2021.

The company forecasts consolidated diluted EPS of 80 cents to 95 cents based on diluted weighted-average shares outstanding of 34.6 million and an effective tax rate of approximately 21 percent. Diluted EPS totalled 63 cents last year.