Vera Bradley Announces Fourth Quarter and Fiscal Year 2021 Results
Vera Bradley, Inc. reported a net income of $8.7 million, or $0.26 per diluted share for Fiscal 2021, with non-GAAP net income at $21.4 million, or $0.63 per diluted share. E-commerce sales nearly reached 50% of total revenues, increasing by almost 50% year-over-year. The company anticipates total revenue growth of 17% to 23% for the fiscal year ending January 29, 2022. Despite pandemic challenges, Vera Bradley's consolidated revenue for Fiscal 2021 decreased to $468.3 million from $495.2 million in the previous year, impacted by COVID-19 and store impairments.
- E-commerce sales surged by nearly 50% year-over-year, comprising almost half of total revenue.
- Management expects total revenue growth of 17% to 23% for the upcoming fiscal year.
- Strong cash position with $65.5 million in cash and no debt.
- Consolidated net revenues decreased to $468.3 million from $495.2 million in the prior year.
- Net income declined from $16.0 million in Fiscal 2020 to $8.7 million in Fiscal 2021.
For the fiscal year, Vera Bradley, Inc. net income totaled
excluding certain items, Vera Bradley, Inc. non-GAAP net income totaled
E-commerce sales comprised nearly half of total Company revenues for the fiscal year; Vera Bradley brand e-commerce sales grew nearly
Balance sheet remains strong, with cash, cash equivalents, and investments of
Management provides guidance for fiscal year ending January 29, 2022; total revenues expected to grow
FORT WAYNE, Ind., March 10, 2021 (GLOBE NEWSWIRE) -- Vera Bradley, Inc. (Nasdaq: VRA) (“Vera Bradley” or the “Company”) today announced its financial results for the fourth quarter and fiscal year ended January 30, 2021 (“Fiscal 2021”).
Rob Wallstrom, Chief Executive Officer of the Company, noted, “I am proud of how our organization navigated through the last year. Our extraordinary culture has allowed us to not only persevere through the crisis, but it has made us stronger. In spite of an extremely challenging overall retail environment and a very difficult handbag and accessories market in particular, we delivered some best-in-class operating results. On a non-GAAP basis, excluding certain items, our fiscal year operating income was nearly
“Despite significant sales disruption, we had several financial successes during the year. E-commerce sales comprised nearly half of total Company revenues for the fiscal year; Vera Bradley brand e-commerce sales grew nearly
“For the year, we expanded our consolidated gross margin rate primarily through product innovation (cotton masks and product collaborations) and more full-priced selling,” Wallstrom added. “We diligently managed our expenses, and we ended the fiscal year with a solid balance sheet with ample cash and no debt. We are in a strong position to drive growth by continuing to invest in our two brands and to take advantage of additional acquisition opportunities over time.”
Pura Vida Acquisition and Accounting
In the Company’s prior year second fiscal quarter (on July 16, 2019), Vera Bradley acquired a
Summary of Financial Performance for the Fourth Quarter
Consolidated net revenues totaled
For the current year fourth quarter, Vera Bradley, Inc. consolidated net income totaled
For the prior year fourth quarter, Vera Bradley, Inc. consolidated net income totaled
Summary of Financial Performance for the Fiscal Year
Consolidated net revenues totaled
For the current fiscal year, Vera Bradley, Inc.’s consolidated net income totaled
For Fiscal 2020, Vera Bradley, Inc. consolidated net income totaled
Key Accomplishments for Fiscal 2021
Wallstrom noted, “In Fiscal 2021, we concluded the final year of Vision 20/20 – our aggressive three-year plan to restore the Vera Bradley brand and business to a healthy foundation, and we completed the first full year of consolidated operations of Pura Vida. Despite the pandemic challenges, we strengthened our infrastructure and better positioned both the Pura Vida and Vera Bradley brands for the future. Some of our major achievements for the year included:
For Pura Vida:
- Pura Vida’s e-commerce revenues increased nearly
15% for the fiscal year, despite the pandemic and significant supply chain disruptions during the lockdown. Average order values and conversion rates continued to grow year-over-year. - Fiscal 2021 was focused on building a strong foundation of growth for Pura Vida.
- Using Vera Bradley’s global sourcing expertise, we significantly strengthened Pura Vida’s supply chain, diversifying raw material sourcing, and adding three additional production facilities in countries outside of El Salvador.
- We re-examined promotional activity and eliminated deep discounting, particularly around Black Friday, which led to gross margin rate improvement.
- We laid the groundwork for growth initiatives beyond jewelry to further expand Pura Vida’s lifestyle brand reach.
- In the Product area:
- Pura Vida continued to show strength as a lifestyle brand by successfully expanding into new product categories. Nearly
50% of our e-commerce business is now comprised of jewelry categories other than traditional string bracelets, such as metal, semi-precious stones, charms, and the engravable collection, underscoring the brand’s lifestyle appeal. This lifestyle appeal will continue to be a key driver of growth. - Charity bracelets continue to be an important element of the Pura Vida lifestyle and an important draw for our cause-minded customers. To date, Pura Vida has donated over
$3.0 million to more than 200 charities.
- Pura Vida continued to show strength as a lifestyle brand by successfully expanding into new product categories. Nearly
- On the Distribution front:
- Pura Vida expanded on the distribution front by launching fulfillment capabilities in Canada and entering into a third-party agreement for the wholesale distribution of our products in Europe to complement our existing e-commerce business and third-party operations there.
- We added Pura Vida shop-in-shops to six full-line Vera Bradley stores and expanded our presence in wholesale partners with larger in-store presentations.
- In the Marketing area:
- Pura Vida’s social media engagement is exceptional, remaining one of the most highly-engaged brands in the accessories space on social media, with over 2.0 million Instagram followers. TikTok has also taken off with well over 200,000 followers, and a team of Brand Ambassadors and close to 150,000 micro influencers are an active part of the brand and a key part of our marketing strategy.
- We entered into an agreement with the “reigning queen of TikTok,” Charli D’Amelio, for our collaborative Pura Vida bracelet style pack which launched on March 5, 2021. Charli’s astounding 150 million plus social media followers and her target demographic fits perfectly with the Pura Vida brand.
- Pura Vida continued to rank at the top of the industry for our net promoter and customer satisfaction scores.
- Earned media was strong with healthy returns on spend, and we doubled our SMS list from Fiscal 2020 to well over one million active subscribers, which drove meaningful revenue.
For Vera Bradley:
- In the Product area:
- We accelerated our robust fabric innovation pipeline to develop new fabric offerings and build on our platform of sustainable fabrics. We expanded our full-line Performance Twill and recycled Re-Active collections, introduced our Ultralight fabrication in our Factory stores, and developed our recycled cotton collection that will launch in spring 2021.
- We quickly reacted to the consumer demand for personal protective equipment, producing and selling millions of cotton face masks, generating meaningful revenue and gross margin dollars for the fiscal year.
- We continued another year of collaborations with several iconic brands, including Crocs, Disney, and Gillette Venus to create and sell limited-edition product collections; introduced our signature masks and 1982 backpacks in Target stores and on target.com; and launched our collaboration with Warner Bros. Consumer Products for the creation of our Harry Potter™ + Vera Bradley collection.
- On the Distribution front:
- We continued to strengthen and rationalize our store base. We opened six new factory stores and closed 13 underperforming full-line stores, ending the fiscal year with 75 full-line and 69 factory locations.
- We expanded and strengthened our partnerships with key online retailers such as Amazon.
- In the Marketing area:
- Our loyal customer retention improved year-over-year which was a testament to our customers’ loyalty and our enhanced digital and data analytics programs.
- Our customer service model and voice of the customer program continued to drive industry-leading customer satisfaction scores, despite pandemic-related disruptions.
- We successfully launched our new verabradley.com site which allowed us to improve our customer’s online buying experience and offer enhanced content to guide purchasing. We added a number of key site capabilities to support customers who shifted to online purchasing during the pandemic.
- Our well-timed investments in customer data science and business analytics positioned us well as we navigated through the pandemic, allowing us to collect and analyze data and respond to customer changes and adjust marketing spend in an agile way.
- Our targeted digital media efforts drove increased brand awareness and improved earned media, with total media impressions up more than
170% to almost 10 billion for the year.
- We reinforced our commitment to be an ESG-driven organization.
- We continued to strengthen our community support and charitable efforts under the umbrella of VB Cares, particularly through organizations that can profoundly improve the lives of women and children, including raising and donating
$1.4 million to the Vera Bradley Foundation Center for Breast Cancer Research; over$630,000 t o the Coronavirus Response Fund for Nurses; and donations to New Hope Girls, Blessings in a Backpack, and several other causes. - Another aspect of our VB Cares focus is caring for our Associates, and we were able to pay over
$800,000 in bonuses to those serving on the front lines during the pandemic. - We launched our Company-wide diversity and inclusion initiative, Project Quilt, to continue to enhance diversity, equality, and inclusion, focusing on three key areas – the Associate Experience, the Customer Experience, and the Community Experience.
- We continued to strengthen our community support and charitable efforts under the umbrella of VB Cares, particularly through organizations that can profoundly improve the lives of women and children, including raising and donating
In the Information Technology area:
- We completed Project Novus, our information technology platform conversion, migrating our e-commerce site to a best-in-class, cloud-based solution and replacing our existing ERP, POS, Business Intelligence, and Order Management systems with cloud-based Microsoft D365. This conversion not only lessened the complexity of our IT systems but has provided us with a more efficient technology platform enabling our entire enterprise to make quick, data-based, informed decisions; further enhance our customer experience; and achieve our long-term growth objectives.”
Organizational Structure Changes to Drive Growth
Wallstrom noted, “Today, we are also announcing changes to the leadership structure of our Company and the Vera Bradley brand to position us for an exciting future.
“As we conclude Vision 20/20, we are embarking on the next important phase of our Company’s growth by enhancing our multi-brand portfolio, further expanding our ESG initiatives, and driving additional value for all of our stakeholders. In order to strengthen our position and strategic vision as a purpose-driven, multi-brand, high-growth company, we are realigning our organizational and leadership structure.
“Vera Bradley and Pura Vida are the two lifestyle brands currently under our Vera Bradley, Inc. umbrella. We not only intend to nurture and grow both of those brands, but we will also look for other lifestyle brands that could strengthen our capabilities and diversify our revenue streams. While I will continue as CEO of Vera Bradley, Inc., each brand will have their own leadership team that will focus on building customer engagement and expanding revenue, while protecting and cultivating the distinct ethos and entrepreneurial spirit of each unique brand.”
Wallstrom continued, “With the retail industry continuing its rapid transformation into a customer-centric, data-driven, technology-enabled, and digitally-driven industry, Vera Bradley will double down on these focus areas. Serving as Vera Bradley’s Chief Customer Officer for the past two and a half years, Daren Hull and his team have already radically strengthened the way we engage with our customers. Now, Daren Hull has been appointed as the Vera Bradley Brand President and will continue to lead our digital-first transformation. In his new role, Daren is being supported by a new streamlined leadership structure focused on three critical areas: what we bring to market, how to sell the market, and how we raise customer engagement and interest in the brand.”
“On a corporate level, we will offer consolidated back-office support and an efficient and lean corporate platform to enhance the growth of each brand,” Wallstrom added. “We will continue our technology and customer insights evolution to build an integrated ecosystem of capabilities on an enterprise level that will allow our brands to respond more quickly to our customers’ wants and needs.
“These changes will better prepare us to adapt to the ever-changing retail landscape, allow us to better react to customer needs, strengthen our positioning, and propel us toward more profitable growth. I am so proud of all that the teams have accomplished over the past year. I am confident that we have an exciting future ahead as we are poised to take advantage of additional acquisition opportunities and to evolve into an even more modern and relevant multi-brand retailer.”
Looking Ahead
Wallstrom commented, “Our enterprise’s forward-looking strategy is to be a purpose-driven, multi-lifestyle brand, high-growth company, and we are just beginning the journey. Our strong cash position, debt-free balance sheet, and ability to generate free cash flow will allow us to seek out appropriate acquisitions of other comfortable, affordable, purpose-driven, digitally-native brands, similar to our successful Pura Vida acquisition, over time. We will also expand our reach by adding adjacent product categories and geographies.
“For Fiscal 2022, the Company’s four key growth drivers are:
- Driving our digital-first strategy, by evolving the digital distribution of our products and further refining and utilizing digital experiences to serve our customers. This will be supported by continuously refining our technology, developing business process and technology platforms to improve agility, data-based decision making, customer centricity, and speed-to-market.
- Enhancing our product innovation pipeline, collaborations, and category extensions to attract new customers and increase share of wallet with existing customers.
- Building our community, through marketing and by creating an impactful, positive brand movement that not only changes lives but deepens her brand loyalty.
- Evolving our distribution channels, by focusing on future growth opportunities and addressing the drastically changing retail environment and the consumer marketplace.”
Wallstrom concluded, “We have a long-term vision for the future of our Company and a clear path to achieve our goals. Our team is focused, our balance sheet is solid, our brands are strong, and we are positioned for growth. We are excited about the possibilities for Vera Bradley, Inc.”
Non-GAAP Numbers
The current year non-GAAP fourth quarter income statement numbers referenced below exclude the previously outlined store impairment charges and intangible asset amortization. The current year non-GAAP income statement numbers for the fiscal year referenced below exclude the previously outlined intangible asset amortization, store impairment charges, Project Novus expenses, charges related to the cancellation of certain purchase orders resulting from COVID-19, an adjustment to the Pura Vida earn-out liability, and certain department store exit costs resulting from COVID-19. The prior year non-GAAP income statement numbers for the fourth quarter and fiscal year referenced below exclude the previously outlined Pura Vida acquisition-related charges and Project Novus expenses.
Fourth Quarter Details
Current year fourth quarter Vera Bradley Direct segment revenues totaled
Vera Bradley Indirect segment revenues totaled
Pura Vida segment revenues totaled
Fourth quarter consolidated gross profit totaled
Consolidated SG&A expense totaled
The Company’s fourth quarter consolidated operating income totaled
By segment:
- Vera Bradley Direct fourth quarter operating income was
$16.9 million , or18.2% of Direct net revenues, compared to$23.3 million , or22.5% of Direct net revenues, in the prior year. On a non-GAAP basis, excluding store impairment charges, current year fourth quarter Direct operating income totaled$20.5 million , or22.1% of Direct net revenues. On a non-GAAP basis, excluding a portion of Project Novus expenses and incremental stock compensation, prior year fourth quarter Direct operating income totaled$24.2 million , or23.4% of Direct net revenues. - Vera Bradley Indirect fourth quarter operating income was
$5.9 million , or39.0% of Indirect net revenues, compared to$6.9 million , or38.6% of Indirect net revenues, in the prior year. On a non-GAAP basis, excluding a portion of the incremental stock compensation, prior year fourth quarter Indirect operating income totaled$7.0 million , or39.2% of Indirect net revenues. - Pura Vida’s current year fourth quarter operating income was
$4.0 million , or11.7% of Pura Vida net revenues, compared to$1.8 million , or5.2% of Pura Vida net revenues, in the prior year. On a non-GAAP basis, excluding intangible asset amortization, Pura Vida’s current year fourth quarter operating income was$6.0 million , or17.6% of Pura Vida net revenues. On a non-GAAP basis, excluding the Pura Vida acquisition-related charges (intangible asset amortization and inventory step-up amortization), Pura Vida’s prior year fourth quarter operating income was$5.4 million , or15.1% of Pura Vida net revenues.
Details for the Fiscal Year
Vera Bradley Direct segment revenues for the current fiscal year totaled
Vera Bradley Indirect segment revenues for the fiscal year totaled
Pura Vida segment revenues totaled
Consolidated gross profit for the current fiscal year totaled
For the fiscal year, consolidated SG&A expense totaled
For the fiscal year, the Company’s consolidated operating income totaled
By segment:
- Vera Bradley Direct operating income was
$48.5 million , or16.8% of Direct net revenues, compared to$68.5 million , or19.7% of net revenues, in the prior year. On a non-GAAP basis, excluding store impairment charges, a portion of the charges for the cancellation of certain purchase orders, and a portion of Project Novus expenses, the current year Direct operating income was$59.0 million , or20.4% of Direct net revenues. On a non-GAAP basis, excluding a portion of the Project Novus expenses and incremental stock compensation, prior year Direct operating income was$70.5 million , or20.3% of Direct net revenues. - Vera Bradley Indirect operating income was
$24.5 million , or36.8% of Indirect net revenues, compared to$31.1 million , or38.0% of Indirect net revenues, in the prior year. On a non-GAAP basis, excluding certain department store exit costs and a portion of the charges for the cancellation of certain purchase orders, current year Indirect operating income totaled$24.9 million , or37.4% of Indirect net revenues. On a non-GAAP basis, excluding a portion of the incremental stock-based compensation, prior year Indirect operating income totaled$31.2 million , or38.1% of Indirect net revenues. - Pura Vida’s operating income was
$8.0 million , or7.1% of Pura Vida net revenues, compared to an operating loss of ($3.2) million , or (4.8% ) of Pura Vida net revenues, for the prior year. On a non-GAAP basis, excluding the intangible asset amortization, Pura Vida’s operating income was$17.0 million , or15.1% of Pura Vida net revenues, for the current year. On a non-GAAP basis, excluding the Pura Vida acquisition-related charges (inventory step-up amortization and intangible asset amortization), Pura Vida’s operating income was$10.5 million , or15.9% of Pura Vida net revenues, for the prior year (representing a partial period from the date of acquisition).
Balance Sheet
Net capital spending for the fiscal year totaled
Cash, cash equivalents, and investments as of January 30, 2021 totaled
Total fiscal year-end inventory was
During the first quarter of Fiscal 2021, the Company’s board of directors temporarily suspended share repurchases due to the pandemic, so no purchases have been made since that time. At the end of Fiscal 2021, the Company had approximately
Fiscal 2022 Outlook
The uncertainties surrounding the continuing effects of COVID-19 on the retail environment make future financial performance extremely difficult to predict. However, management is providing its estimates for Fiscal 2022 (outlined below) based on current expectations. Management expects store traffic and revenue to improve in the second half of the year as vaccines become more widely available.
All forward-looking guidance numbers referenced below are non-GAAP. The prior year gross profit, SG&A, and earnings per diluted share numbers exclude the previously disclosed net charges related to intangible asset amortization, store impairment charges, Project Novus expenses, cancellation of certain purchase orders related to the pandemic, adjustment to the Pura Vida earn-out liability, and certain department store exit costs related to the pandemic. Current year guidance excludes any similar charges.
For Fiscal 2022, the Company’s expectations are as follows:
- Consolidated net revenues of
$550 t o$575 million . Net revenues totaled$468.3 million in Fiscal 2021. Year-over-year Pura Vida revenues are expected to grow between20% and30% , and Vera Bradley revenues are expected to grow between15% and20% . - Free cash flow of between
$50 and$55 million compared to$15.0 million in the prior year. - A consolidated gross profit percentage of
56.0% to57.0% compared to57.0% in Fiscal 2021. The potential rate decline relates to an abatement in mask penetration in Fiscal 2022 coupled with incremental costs for inbound and outbound freight expense. - Consolidated SG&A expense of
$270 t o$276 million compared to$233.0 million in Fiscal 2021. The expected SG&A increase is primarily related to Vera Bradley stores being opened for the full year (stores were temporarily closed for between several weeks and several months in Fiscal 2021 due to the pandemic), non-comparable compensation and Cares Act savings in Fiscal 2021, and general variable increases associated with higher sales expectations. - Consolidated operating income of
$44 t o$49 million compared to$34.0 million in Fiscal 2021. - Consolidated diluted EPS of
$0.80 t o$0.90 b ased on diluted weighted-average shares outstanding of 34.6 million and an effective tax rate of between 23.0 and24.0% . Diluted EPS totaled$0.63 last year. Management’s expectation is to generally meet or exceed the Company’s pre-pandemic Fiscal 2020 non-GAAP diluted earnings per share of$0.82 . - Net capital spending of approximately
$8 t o$10 million compared to$5.7 million in the prior year, reflecting investments associated with new factory locations and technology and logistics enhancements.
Disclosure Regarding Non-GAAP Measures
The Company's management does not, nor does it suggest that investors should, consider the supplemental non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Further, the non-GAAP measures utilized by the Company may be unique to the Company, as they may be different from non-GAAP measures used by other companies.
The Company believes that the non-GAAP measures presented in this earnings release, including free cash flow; gross profit; selling, general, and administrative expenses; operating income; net income; net income attributable and available to Vera Bradley, Inc.; and diluted net income per share available to Vera Bradley, Inc. common shareholders, along with the associated percentages of net revenues, are helpful to investors because they allow for a more direct comparison of the Company’s year-over-year performance and are consistent with management’s evaluation of business performance. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures can be found in the Company’s supplemental schedules included in this earnings release.
Call Information
A conference call to discuss results for the fourth quarter and fiscal year is scheduled for today, Wednesday, March 10, 2021, at 9:30 a.m. Eastern Time. A broadcast of the call will be available via Vera Bradley’s Investor Relations section of its website, www.verabradley.com. Alternatively, interested parties may dial into the call at (800) 289-0571, and enter the access code 8012072. A replay will be available shortly after the conclusion of the call and remain available through March 24, 2021. To access the recording, listeners should dial (844) 512-2921, and enter the access code 8012072.
About Vera Bradley, Inc.
Vera Bradley, Inc. operates two unique lifestyle brands – Vera Bradley and Pura Vida. Vera Bradley and Pura Vida are complementary businesses, both with devoted, emotionally-connected, and multi-generational female customer bases; alignment as causal, comfortable, affordable, and fun brands; positioning as “gifting” and socially-connected brands; strong, entrepreneurial cultures; a keen focus on community, charity, and social consciousness; multi-channel distribution strategies; and talented leadership teams aligned and committed to the long-term success of their brands.
Vera Bradley, based in Fort Wayne, Indiana, is a leading designer of women’s handbags, luggage and other travel items, fashion and home accessories, and unique gifts. Founded in 1982 by friends Barbara Bradley Baekgaard and Patricia R. Miller, the brand is known for its innovative designs, iconic patterns, and brilliant colors that inspire and connect women unlike any other brand in the global marketplace.
In July 2019, Vera Bradley, Inc. acquired a
The Company has three reportable segments: Vera Bradley Direct (“VB Direct”), Vera Bradley Indirect (“VB Indirect”), and Pura Vida. The VB Direct business consists of sales of Vera Bradley products through Vera Bradley full-line and factory outlet stores in the United States, verabradley.com, the Vera Bradley online outlet site, and the Vera Bradley annual outlet sale in Fort Wayne, Indiana. The VB Indirect business consists of sales of Vera Bradley products to approximately 2,000 specialty retail locations throughout the United States, as well as select department stores, national accounts, third party e-commerce sites, and third-party inventory liquidators, and royalties recognized through licensing agreements related to the Vera Bradley brand. The Pura Vida segment consists of sales of Pura Vida products through the Pura Vida websites, www.puravidabracelets.com, www.puravidabracelets.eu, and www.puravidabracelets.ca, and through the distribution of its products to wholesale retailers.
Website Information
We routinely post important information for investors on our website www.verabradley.com in the "Investor Relations" section. We intend to use this webpage as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investor Relations section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our webpage is not incorporated by reference into, and is not a part of, this document.
Investors and other interested parties may also access the Company’s most recent Corporate Responsibility and Sustainability Report outlining its ESG (Environmental, Social, and Governance) initiatives at https://www.verabradley.com/us/static/customerservice/corporateresponsibility.
Vera Bradley Safe Harbor Statement
Certain statements in this release are "forward-looking statements" made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the Company's current expectations or beliefs concerning future events and are subject to various risks and uncertainties that may cause actual results to differ materially from those that we expected, including: possible adverse changes in general economic conditions and their impact on consumer confidence and spending; possible inability to predict and respond in a timely manner to changes in consumer demand; possible loss of key management or design associates or inability to attract and retain the talent required for our business; possible inability to maintain and enhance our brand; possible inability to successfully implement the Company’s long-term strategic plan; possible inability to successfully open new stores, close targeted stores, and/or operate current stores as planned; incremental tariffs or adverse changes in the cost of raw materials and labor used to manufacture our products; possible adverse effects resulting from a significant disruption in our distribution facilities; or business disruption caused by COVID-19. Risks, uncertainties, and assumptions also include the possibility that Pura Vida acquisition benefits may not materialize as expected; that Pura Vida’s business may not perform as expected; and that the Company is unable to successfully implement integration strategies related to the acquisition. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended February 1, 2020. We undertake no obligation to publicly update or revise any forward-looking statement. Financial schedules are attached to this release.
CONTACTS:
Investors:
Julia Bentley, VP of Investor Relations and Communications
jbentley@verabradley.com
(260) 207-5116
Media:
mediacontact@verabradley.com
877-708-VERA (8372)
| Vera Bradley, Inc. | |||||||
| Condensed Consolidated Balance Sheets | |||||||
| (in thousands) | |||||||
| (unaudited) | |||||||
| January 30, 2021 | February 1, 2020 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 64,175 | $ | 49,917 | |||
| Short-term investments | 1,295 | 8,977 | |||||
| Accounts receivable, net | 27,543 | 24,290 | |||||
| Inventories | 141,416 | 123,606 | |||||
| Income taxes receivable | 7,372 | 1,043 | |||||
| Prepaid expenses and other current assets | 17,882 | 10,956 | |||||
| Total current assets | 259,683 | 218,789 | |||||
| Operating right-of-use assets | 88,730 | 114,790 | |||||
| Property, plant, and equipment, net | 63,952 | 73,027 | |||||
| Intangible assets, net | 47,296 | 56,305 | |||||
| Goodwill | 44,254 | 44,254 | |||||
| Long-term investments | - | 14,912 | |||||
| Deferred income taxes | 3,530 | 7,656 | |||||
| Other assets | 6,342 | 5,328 | |||||
| Total assets | $ | 513,787 | $ | 535,061 | |||
| Liabilities, Redeemable Noncontrolling Interest, and Shareholders' Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 27,093 | $ | 20,235 | |||
| Accrued employment costs | 13,648 | 11,412 | |||||
| Short-term operating lease liabilities | 22,321 | 21,347 | |||||
| Earn-out liability | - | 18,448 | |||||
| Other accrued liabilities | 14,043 | 13,850 | |||||
| Income taxes payable | 321 | 2,113 | |||||
| Total current liabilities | 77,426 | 87,405 | |||||
| Long-term operating lease liabilities | 91,536 | 113,775 | |||||
| Other long-term liabilities | 109 | 62 | |||||
| Total liabilities | 169,071 | 201,242 | |||||
| Redeemable noncontrolling interest | 29,809 | 30,049 | |||||
| Shareholders' equity: | |||||||
| Additional paid-in-capital | 105,433 | 100,357 | |||||
| Retained earnings | 316,526 | 307,414 | |||||
| Accumulated other comprehensive income | 8 | 158 | |||||
| Treasury stock | (107,060 | ) | (104,159 | ) | |||
| Total shareholders' equity of Vera Bradley, Inc. | 314,907 | 303,770 | |||||
| Total liabilities, redeemable noncontrolling interest, and shareholders' equity | $ | 513,787 | $ | 535,061 | |||
| Vera Bradley, Inc. | ||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||
| (unaudited) | ||||||||||||||
| Thirteen Weeks Ended | Fifty-Two Weeks Ended | |||||||||||||
| January 30, 2021 | February 1, 2020 | January 30, 2021 | February 1, 2020 | |||||||||||
| Net revenues | $ | 142,369 | $ | 156,923 | $ | 468,272 | $ | 495,212 | ||||||
| Cost of sales | 64,491 | 70,793 | 202,754 | 223,411 | ||||||||||
| Gross profit | 77,878 | 86,130 | 265,518 | 271,801 | ||||||||||
| Selling, general, and administrative expenses | 68,948 | 68,960 | 252,588 | 253,425 | ||||||||||
| Other income | 46 | 77 | 135 | 1,098 | ||||||||||
| Operating income | 8,976 | 17,247 | 13,065 | 19,474 | ||||||||||
| Interest expense (income), net | 348 | (130 | ) | 1,203 | (1,085 | ) | ||||||||
| Income before income taxes | 8,628 | 17,377 | 11,862 | 20,559 | ||||||||||
| Income tax (benefit) expense | (297 | ) | 4,464 | 1,173 | 5,315 | |||||||||
| Net income | 8,925 | 12,913 | 10,689 | 15,244 | ||||||||||
| Less: Net income (loss) attributable to redeemable noncontrolling interest | 997 | 454 | 2,008 | (803 | ) | |||||||||
| Net income attributable to Vera Bradley, Inc. | $ | 7,928 | $ | 12,459 | $ | 8,681 | $ | 16,047 | ||||||
| Basic weighted-average shares outstanding | 33,414 | 33,620 | 33,390 | 33,983 | ||||||||||
| Diluted weighted-average shares outstanding | 34,291 | 34,086 | 33,914 | 34,288 | ||||||||||
| Basic net income per share available to Vera Bradley, Inc. common shareholders | $ | 0.24 | $ | 0.37 | $ | 0.26 | $ | 0.47 | ||||||
| Diluted net income per share available to Vera Bradley, Inc. common shareholders | $ | 0.23 | $ | 0.37 | $ | 0.26 | $ | 0.47 | ||||||
| Vera Bradley, Inc. | |||||||
| Condensed Consolidated Statements of Cash Flows | |||||||
| (in thousands) | |||||||
| (unaudited) | |||||||
| Fifty-Two Weeks Ended | |||||||
| January 30, 2021 | February 1, 2020 | ||||||
| Cash flows from operating activities | |||||||
| Net income | $ | 10,689 | $ | 15,244 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation of property, plant, and equipment | 13,483 | 18,447 | |||||
| Impairment charges | 7,446 | - | |||||
| Amortization of operating right-of-use assets | 21,128 | 21,969 | |||||
| Amortization of intangible assets | 9,009 | 5,359 | |||||
| Provision for doubtful accounts | 1,333 | 160 | |||||
| Stock-based compensation | 5,651 | 5,940 | |||||
| Deferred income taxes | 4,126 | (864 | ) | ||||
| Loss (gain) on investments | 13 | (188 | ) | ||||
| Adjustment of earn-out liability | 229 | (1,650 | ) | ||||
| Amortization of step-up in inventory basis | - | 8,274 | |||||
| Other non-cash (gain) charges, net | (1 | ) | 202 | ||||
| Changes in assets and liabilities: | |||||||
| Accounts receivable | (5,579 | ) | (1,013 | ) | |||
| Inventories | (17,810 | ) | (12,645 | ) | |||
| Prepaid expenses and other assets | (7,940 | ) | (4,477 | ) | |||
| Accounts payable | 7,353 | (615 | ) | ||||
| Income taxes | (8,121 | ) | (284 | ) | |||
| Operating lease liabilities, net | (22,680 | ) | (25,302 | ) | |||
| Accrued and other liabilities | 2,373 | (7,933 | ) | ||||
| Net cash provided by operating activities | 20,702 | 20,624 | |||||
| Cash flows from investing activities | |||||||
| Purchases of property, plant, and equipment | (5,743 | ) | (13,317 | ) | |||
| Purchases of investments | (851 | ) | (18,950 | ) | |||
| Proceeds from maturities and sales of investments | 23,281 | 38,333 | |||||
| Cash received (paid) for business acquisition, net of cash acquired | 993 | (76,032 | ) | ||||
| Net cash provided by (used in) investing activities | 17,680 | (69,966 | ) | ||||
| Cash flows from financing activities | |||||||
| Tax withholdings for equity compensation | (575 | ) | (1,155 | ) | |||
| Repurchase of common stock | (3,077 | ) | (11,341 | ) | |||
| Distributions to redeemable noncontrolling interest | (1,817 | ) | (1,789 | ) | |||
| Borrowings under asset-based revolving credit agreement | 60,000 | - | |||||
| Repayment of borrowings under asset-based revolving credit agreement | (60,000 | ) | - | ||||
| Payment of contingent consideration for business acquisition | (18,677 | ) | - | ||||
| Net cash used in financing activities | (24,146 | ) | (14,285 | ) | |||
| Effect of exchange rate changes on cash and cash equivalents | 22 | 51 | |||||
| Net increase (decrease) in cash and cash equivalents | $ | 14,258 | $ | (63,576 | ) | ||
| Cash and cash equivalents, beginning of period | 49,917 | 113,493 | |||||
| Cash and cash equivalents, end of period | $ | 64,175 | $ | 49,917 | |||
| Vera Bradley, Inc. | |||||||||||
| Fourth Quarter Fiscal 2021 | |||||||||||
| GAAP to Non-GAAP Reconciliation Thirteen Weeks Ended January 30, 2021 | |||||||||||
| (in thousands, except per share amounts) | |||||||||||
| (unaudited) | |||||||||||
| Thirteen Weeks Ended | |||||||||||
| As Reported | Other Items | Non-GAAP (Excluding Items) | |||||||||
| Gross profit | $ | 77,878 | $ | - | $ | 77,878 | |||||
| Selling, general, and administrative expenses | 68,948 | 5,662 | 1 | 63,286 | |||||||
| Operating income (loss) | 8,976 | (5,662 | ) | 14,638 | |||||||
| Income (loss) before income taxes | 8,628 | (5,662 | ) | 14,290 | |||||||
| Income tax (benefit) expense | (297 | ) | (2,596 | ) | 2 | 2,299 | |||||
| Net income (loss) | 8,925 | (3,066 | ) | 11,991 | |||||||
| Less: Net income (loss) attributable to redeemable noncontrolling interest | 997 | (506 | ) | 1,503 | |||||||
| Net income (loss) attributable to Vera Bradley, Inc. | 7,928 | (2,560 | ) | 10,488 | |||||||
| Diluted net income (loss) per share available to Vera Bradley, Inc. common shareholders | $ | 0.23 | $ | (0.07 | ) | $ | 0.31 | ||||
| Vera Bradley Direct segment operating income (loss) | $ | 16,890 | $ | (3,640 | ) | 3 | $ | 20,530 | |||
| Vera Bradley Indirect segment operating income | $ | 5,927 | $ | - | $ | 5,927 | |||||
| Pura Vida segment operating income (loss) | $ | 3,985 | $ | (2,022 | ) | 4 | $ | 6,007 | |||
| Unallocated corporate expenses | $ | (17,826 | ) | $ | - | $ | (17,826 | ) | |||
| 1Items include | |||||||||||
| 2Related to the tax impact of the charges mentioned above | |||||||||||
| 3Related to store impairment charges | |||||||||||
| 4Related to the amortization of definite-lived intangible assets | |||||||||||
| Vera Bradley, Inc. | |||||||||||
| Fourth Quarter Fiscal 2020 | |||||||||||
| GAAP to Non-GAAP Reconciliation Thirteen Weeks Ended February 1, 2020 | |||||||||||
| (in thousands, except per share amounts) | |||||||||||
| (unaudited) | |||||||||||
| Thirteen Weeks Ended | |||||||||||
| As Reported | Other Items | Non-GAAP (Excluding Items) | |||||||||
| Gross profit (loss) | $ | 86,130 | $ | (1,044 | ) | 1 | $ | 87,174 | |||
| Selling, general, and administrative expenses | 68,960 | 1,803 | 2 | 67,157 | |||||||
| Operating income (loss) | 17,247 | (2,847 | ) | 20,094 | |||||||
| Income (loss) before income taxes | 17,377 | (2,847 | ) | 20,224 | |||||||
| Income tax expense (benefit) | 4,464 | (88 | ) | 3 | 4,552 | ||||||
| Net income (loss) | 12,913 | (2,759 | ) | 15,672 | |||||||
| Less: Net income (loss) attributable to redeemable noncontrolling interest | 454 | (880 | ) | 1,334 | |||||||
| Net income (loss) attributable to Vera Bradley, Inc. | 12,459 | (1,879 | ) | 14,338 | |||||||
| Diluted net income (loss) per share attributable to Vera Bradley, Inc. | $ | 0.37 | $ | (0.06 | ) | $ | 0.42 | ||||
| Vera Bradley Direct segment operating income (loss) | $ | 23,333 | $ | (864 | ) | 4 | $ | 24,197 | |||
| Vera Bradley Indirect segment operating income (loss) | $ | 6,884 | $ | (108 | ) | 5 | $ | 6,992 | |||
| Pura Vida segment operating income (loss) | $ | 1,846 | $ | (3,519 | ) | 6 | $ | 5,365 | |||
| Unallocated corporate expenses | $ | (14,816 | ) | $ | 1,644 | 7 | $ | (16,460 | ) | ||
| 1Related to a purchase accounting adjustment for the amortization of the step-up in inventory basis associated with the acquisition of Pura Vida | |||||||||||
| 2Items include | |||||||||||
| 3Related to the tax impact of the charges mentioned above | |||||||||||
| 4Related to | |||||||||||
| 5Related to incremental stock-based compensation | |||||||||||
| 6Related to the purchase accounting adjustments for the Pura Vida acquisition, including the amortization of the step-up in inventory basis and the amortization of definite-lived intangible assets | |||||||||||
| 7Related to | |||||||||||
| Vera Bradley, Inc. | |||||||||||
| GAAP to Non-GAAP Reconciliation Fifty-Two Weeks Ended January 30, 2021 | |||||||||||
| (in thousands, except per share amounts) | |||||||||||
| (unaudited) | |||||||||||
| Fifty-Two Weeks Ended | |||||||||||
| As Reported | Other Items | Non-GAAP (Excluding Items) | |||||||||
| Gross profit (loss) | $ | 265,518 | $ | (1,320 | ) | 1 | $ | 266,838 | |||
| Selling, general, and administrative expenses | 252,588 | 19,635 | 2 | 232,953 | |||||||
| Operating income (loss) | 13,065 | (20,955 | ) | 34,020 | |||||||
| Income (loss) before income taxes | 11,862 | (20,955 | ) | 32,817 | |||||||
| Income tax expense (benefit) | 1,173 | (5,985 | ) | 3 | 7,158 | ||||||
| Net income (loss) | 10,689 | (14,970 | ) | 25,659 | |||||||
| Less: Net income (loss) attributable to redeemable noncontrolling interest | 2,008 | (2,252 | ) | 4,260 | |||||||
| Net income (loss) attributable to Vera Bradley, Inc. | 8,681 | (12,718 | ) | 21,399 | |||||||
| Diluted net income (loss) per share available to Vera Bradley, Inc. common shareholders | $ | 0.26 | $ | (0.38 | ) | $ | 0.63 | ||||
| Vera Bradley Direct segment operating income (loss) | $ | 48,524 | $ | (10,482 | ) | 4 | $ | 59,006 | |||
| Vera Bradley Indirect segment operating income (loss) | $ | 24,502 | $ | (387 | ) | 5 | $ | 24,889 | |||
| Pura Vida segment operating income (loss) | $ | 8,031 | $ | (9,009 | ) | 6 | $ | 17,040 | |||
| Unallocated corporate expenses | $ | (67,992 | ) | $ | (1,077 | ) | 7 | $ | (66,915 | ) | |
| 1Related to charges for the cancellation of certain purchase orders as a result of COVID-19 | |||||||||||
| 2Items include | |||||||||||
| 3Related to the tax impact of the charges mentioned above | |||||||||||
| 4Related to | |||||||||||
| 5Related to | |||||||||||
| 6Related to the amortization of definite-lived intangible assets | |||||||||||
| 7Related to | |||||||||||
| Vera Bradley, Inc. | |||||||||||
| GAAP to Non-GAAP Reconciliation Fifty-Two Weeks Ended February 1, 2020 | |||||||||||
| (in thousands, except per share amounts) | |||||||||||
| (unaudited) | |||||||||||
| Fifty-Two Weeks Ended | |||||||||||
| As Reported | Other Items | Non-GAAP (Excluding Items) | |||||||||
| Gross profit (loss) | $ | 271,801 | $ | (8,274 | ) | 1 | $ | 280,075 | |||
| Selling, general, and administrative expenses | 253,425 | 11,008 | 2 | 242,417 | |||||||
| Operating income (loss) | 19,474 | (19,282 | ) | 38,756 | |||||||
| Income (loss) before income taxes | 20,559 | (19,282 | ) | 39,841 | |||||||
| Income tax expense (benefit) | 5,315 | (3,734 | ) | 3 | 9,049 | ||||||
| Net income (loss) | 15,244 | (15,548 | ) | 30,792 | |||||||
| Less: Net (loss) income attributable to redeemable noncontrolling interest | (803 | ) | (3,409 | ) | 2,606 | ||||||
| Net income (loss) attributable to Vera Bradley, Inc. | 16,047 | (12,139 | ) | 28,186 | |||||||
| Diluted net income (loss) per share attributable to Vera Bradley, Inc. | $ | 0.47 | $ | (0.35 | ) | $ | 0.82 | ||||
| Vera Bradley Direct segment operating income (loss) | $ | 68,505 | $ | (2,011 | ) | 4 | $ | 70,516 | |||
| Vera Bradley Indirect segment operating income (loss) | $ | 31,077 | $ | (108 | ) | 5 | $ | 31,185 | |||
| Pura Vida segment operating (loss) income | $ | (3,179 | ) | $ | (13,633 | ) | 6 | $ | 10,454 | ||
| Unallocated corporate expenses | $ | (76,929 | ) | $ | (3,530 | ) | 7 | $ | (73,399 | ) | |
| 1Related to a purchase accounting adjustment for the amortization of the step-up in inventory basis associated with the acquisition of Pura Vida | |||||||||||
| 2Items include | |||||||||||
| associated with the acquisition of Pura Vida; | |||||||||||
| 3Related to the tax impact of the charges mentioned above | |||||||||||
| 4Related to | |||||||||||
| 5Related to incremental stock-based compensation | |||||||||||
| 6Related to the purchase accounting adjustments for the Pura Vida acquisition, including the amortization of the step-up in inventory basis and the amortization of definite-lived intangible assets | |||||||||||
| 7Related to | |||||||||||
| Vera Bradley, Inc. | |||||||
| Free Cash Flow Reconciliation | |||||||
| (in thousands) | |||||||
| (unaudited) | |||||||
| Fifty-Two Weeks Ended | |||||||
| January 30, 2021 | February 1, 2020 | ||||||
| Net cash provided by operating activities | $ | 20,702 | $ | 20,624 | |||
| Purchases of property, plant, and equipment | (5,743 | ) | (13,317 | ) | |||
| Free cash flow | $ | 14,959 | $ | 7,307 | |||
FAQ
What were Vera Bradley's earnings for Fiscal 2021?
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