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  Title	Vera Bradley (VRA) Q1 2026 Earnings Call Transcript
  ID	10455193
  External ID	7829050778
  Author	Unknown
  Published Date	June 11, 2025, 10:41 a.m.
  Summary	Image source: The Motley Fool. DATE Wednesday, June 11, 2025, at 9:30 a.m. EDT CALL PARTICIPANTS Executive Chairman — Ian Bickley Chief Executive Officer — Jackie Ardrey Chief Financial Officer
  Tags	press-release
  URL	https://www.aol.com/vera-bradley-vra-q1-2026-145631060.html
  Sentiment	Negative: 0.97439    Neutral: 0.01402    Positive: 0.01159
  Relevance	0.02415

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  Content ID	6871575
  Key	e89d99f4-2558-4819-a0c4-c7f1d1e9232b
  Content	Image source: The Motley Fool. DATE Wednesday, June 11, 2025, at 9:30 a.m. EDT CALL PARTICIPANTS Executive Chairman — Ian Bickley Chief Executive Officer — Jackie Ardrey Chief Financial Officer — Michael Schwindle Need a quote from one of our analysts? Email pr@fool.com RISKS Management suspended prior guidance due to "significant uncertainties surrounding the consumer environment" and executive turnover. Net loss from continuing operations (non-GAAP) increased to $10 million from $600,000 in the prior year's first quarter, reflecting deteriorating profitability. Comparable sales declined 25%, driven by lower store traffic and conversion, indicating ongoing demand pressure. Gross margin (non-GAAP) contracted to 47.5% from 51.3% in the prior year's first quarter, impacted by channel mix shifts and higher outbound freight costs. TAKEAWAYS Revenue : $51.7 million, down from $67.9 million in the prior year first quarter (non-GAAP), reflecting lower year-over-year demand. Net Loss (Non-GAAP) : $10 million from continuing operations, compared to $600,000 in the prior year first quarter; diluted EPS loss of $0.36 versus $0.22. Store Footprint Changes : 10 new stores opened and 7 closed since the prior year, affecting total revenue results offset by store closures. Vera Bradley Direct Segment Revenue : $43.1 million, a 23.6% decrease. Indirect Segment Revenue : $8.6 million, down 25.6% due to declines in specialty and key account orders. Comparable Sales Decline : 25% decrease, attributed to traffic and conversion drops in stores and a shift to online channels. Gross Margin (Non-GAAP) : $24.6 million or 47.5%, down from $34.8 million or 51.3%, driven by changes in channel mix. SG&A Expense (Non-GAAP) : $38.3 million, 74.2% of revenue, down from $44.7 million in the prior year first quarter, reflecting cost reduction initiatives. Operating Loss (Non-GAAP) : $13.6 million, 26.3% margin loss, compared to a $9.4 million loss, 13.8% margin loss in the prior year first quarter. Cash and Cash Equivalents : $11.3 million with no borrowings on the $75 million ABL facility at quarter end. Inventory : $99.2 million, down 3% compared to $101.8 million at the end of the first quarter last year, driven by changes in merchandising processes. Pura Vida Segment : Sold during the quarter; now classified as discontinued operations for all financial comparisons. Customer File Composition : Recently acquired new customers comprised 45% of the active 12-month file, up from 30% at the end of the prior year's first quarter. Store Closures Planned : Plans to close 10 unprofitable full-line stores during the year to improve profitability. New CFO Appointment : Martin "Marty" Lading joins as Chief Financial Officer, with relevant prior transformation experience. Strategy and Transformation Committee : Formed to refine strategic direction and accelerate operational change, joined by Andrew Meslow. SUMMARY Vera Bradley (NASDAQ:VRA) announced executive transitions, with Ian Bickley assuming interim leadership as executive chairman following CEO Jackie Ardrey's planned July departure and a nationwide CEO search. The board formed a new strategy and transformation committee, including Andrew Meslow, to accelerate operational and strategic initiatives. The company suspended previous guidance, citing leadership changes and uncertainty in the consumer environment. Sale of the Pura Vida segment during the quarter materially alters segment reporting and comparative results. Executives highlighted intensified efforts on cost controls, brand relevance, and wholesale expansion, while acknowledging shifting customer demographics and demand patterns. Schwindle said, "All the numbers I am discussing today are non-GAAP and exclude the charges outlined in today's press release." Bickley stated, "I am approaching this role not merely as a caretaker, but as someone committed to driving performance and needed change for the company." The shift in customers shows a higher proportion of younger and new customers, influencing future product strategies. Schwindle said, "Given these changes as well as significant uncertainties surrounding the consumer environment, the company is suspending its prior year guidance and is currently not providing any forward guidance." Planned marketing campaigns aim to increase penetration in the 34-year-old demographic, with a July launch targeting holiday and back-to-school periods. INDUSTRY GLOSSARY ABL facility : Asset-based lending credit facility, secured by company assets such as inventory and receivables. Discontinued operations : Business segments that have been sold or divested, with financial results reported separately from continuing operations. Channel mix : The proportional allocation of sales across distribution channels, such as stores, online, and wholesale. Full Conference Call Transcript Ian Bickley: Thanks, Mark. Good morning, everyone. It is a pleasure to speak with all of you. I wanted to join today's call to provide you with some insight on the changes that are taking place at Vera Bradley and to discuss my role in the transition going forward. But on behalf of the entire board of directors, I want to acknowledge both Jackie Ardrey and Michael Schwindle for their work and dedication in helping position Vera Bradley, Inc. for its next chapter on the transformation journey. And thank both for their commitment to facilitating a smooth transition of leadership. We also wish them well in their future endeavors. As you heard from today's announcement, Jackie Ardrey will be departing the company in July. The board of directors has launched a nationwide search to find the next CEO. We have already seen many promising candidates and are focused on hiring the best person to drive Vera Bradley, Inc.'s continued transformation. In the interim, the board believes it is important to have consistent and steady leadership and asked me to assume the role of executive chairman until we have a new CEO in place and ready to lead the company again. In this role, I will be working with Jackie Ardrey and the management team to ensure a smooth transition. When Jackie Ardrey leaves in July, I will lead the company until our new CEO is onboard. Concurrent with this change, the board has announced the formation of a new strategy and transformation committee. The goal of the committee is to work with the management team and incoming leadership in refining the company's strategic direction and future growth initiatives, and accelerate the company's operational transformation. Director Andrew Meslow, former CEO of Bath and Body Works, is joining me on this committee. We are delighted that Andrew is willing to serve in this important role. I am approaching this role not merely as a caretaker, but as someone committed to driving performance and needed change for the company. The board believes we must accelerate our transformation and improve our results. We will focus on refining our strategy while driving operational efficiencies and cost savings to improve profitability and performance. I bring over thirty years of relevant industry experience, including rapidly scaling businesses as well as driving both brand and operational business transformation. I was president of Coach's International Group and have served as an independent director on the Crocs board since 2015. More recently, I acted as the interim CEO at The Body Shop where I helped stabilize the business and navigate it through a successful sales process. I am also pleased that Martin "Marty" Lading will be joining the company as the Chief Financial Officer. Marty began his career at Procter and Gamble and has extensive experience in various CFO roles and also has a strong track record of driving operational transformation and rapidly scaling businesses in both the public and private domain. Having worked for brands such as Coach, Supreme, and most recently at Noodle. I have previously worked with Marty and look forward to the significant contribution he can make to improving performance and accelerating the pace of change. Notwithstanding the current results, Vera Bradley, Inc. is an iconic brand with strong awareness and deep emotional connections with consumers of all generations. I am personally optimistic about the opportunity to restore the brand's cultural relevance with a new generation of consumers as well as with many of its longtime fans. While at the same time accelerating the simplification of the company's operating model to drive greater agility and efficiency. I look forward to leading and overseeing the continuation and acceleration of this important work until a new CEO has been brought on board. I am now going to turn the call over to Jackie Ardrey and Michael Schwindle to discuss Q1 results. Jackie Ardrey? Jackie Ardrey: Thank you, Ian, and thank you all for joining us. I would like to also take a moment to thank Ian Bickley and our entire Board of Directors for their support and guidance since joining in 2022. I am also grateful for the Board's support during this transition as I step down from my leadership position. I will begin with a review of our first quarter before turning the call over to Michael Schwindle to discuss the financials in greater detail. Our first quarter results came close to plan as the residents of our comprehensive strategic initiative to transform our business model and brand positioning continues to improve. The pivots we are making are starting to resonate and the composition of our customer file is beginning to meaningfully shift. I am particularly proud of how the organization is embracing new opportunities, especially in wholesale, while we react to demand and customer feedback. While we are on the path of restoring and modernizing the Vera Bradley, Inc. brand through the four pillars of product, brand, customer, and channel, we recognize that we need to offer a better balance of new and heritage product and are working to increase our penetration of classic Vera Bradley, Inc. product. We have brought back heritage styles, developed new heritage reimagined collections, increased deliveries of licensed products, and returned fan favorites to the assortment. We have also addressed customer feedback about zippers, pockets, and changes in strap length. We remain focused on being where she shops. We have quickly built momentum behind the strategy and are successfully diversifying our wholesale accounts with new relationships. We shipped our order to Costco in Q1, launched on Urban Outfitters marketplace last week, continued to deliver strong revenue increases on Target marketplace, and have a healthy pipeline of new partnerships for the rest of the year, including exclusive products for Anthropologie. These targeted partnerships are based on data insights from both our current customer and lookalike prospective customers and have guided our efforts and outreach. Our performance on Target Marketplace was a notable standout in Q1. The exceptional results have led to further discussions on how best to maximize the partnership. Our success with Target demonstrates the importance of being where she shops. Our first quarter revenues were $51.7 million with mixed direct channel performance. Traffic and conversion declines impacted the business, especially in the outlet and brand stores. E-commerce revenues are stronger, particularly in the value channels of our online outlet and Target marketplace. Our annual outlet sale happened mostly in Q1, where we welcomed tens of thousands of shoppers to Fort Wayne, Indiana and achieved our sales plan. The indirect segment was a bright spot in Q1, over-delivering by double digits as some of our key initiatives started to bear fruit. Channel mix and customer behavior impacted gross margins in the quarter though, primarily driven by material channel mix shifts. In most channels, customers continued to demonstrate pricing sensitivity evidenced by significantly higher clearance penetration despite similar inventory levels and promotional positioning. In light of this, we are testing price elasticity through promo adjustments and are proceeding with plans to close 10 unprofitable full-line store locations this year. Turning to product newness. We launched our new baby bag collection and a luggage program in the brand channels as well as continued relaunches of past customer favorites in the outlet channel, including the extremely successful update of the cult favorite, Glenna Satchel Bag. During Q1, we continued to see divergence in customer behavior by income level, which we believe is related to macroeconomic pressure. However, we are seeing encouraging shifts in our customer file. At the end of the quarter, recently acquired new customers comprised 45% of our active twelve-month file versus 30% last year. These recently acquired customers have a different age and income profile than our existing customers and are showing slightly different product affinities, which we are leaning into to inform future assortments. To further support our progress in driving customer growth in the 34-year-old demographic, our new social marketing campaign launches in July and will run through the holiday season. It will feature a return to nostalgia and fun highlighting the longstanding emotional connection of the Vera Bradley, Inc. brand, as well as offering some exciting new product introductions that will delight both new and existing customers. Looking forward, customer favorites like the Vera tote franchise will return to the outlet channel while traditional lanyard styles will appear soon in both brand and outlet channels as well as some exciting new IP collections and key items for back to school. Above all, we will continue to offer heritage patterns and styling in new reimagined and fun ways that will appeal to both existing and new customers. Now I will turn the call over to Michael Schwindle, who will discuss our financial results in more detail. Michael Schwindle: Thanks, Jackie Ardrey. Good morning, everyone, and thank you for joining us. I have a few brief comments to make about our performance for the quarter. As a reminder, we did complete the sale of Pura Vida during the first quarter. As a result, the operations of Pura Vida have been classified as discontinued operations in the consolidated financial statements. Prior period amounts have also been retrospectively adjusted to conform to the current period presentation. For the sake of clarity, all the numbers I am discussing today are non-GAAP and exclude the charges outlined in today's press release. A complete detail of items excluded from the non-GAAP numbers as well as a reconciliation of GAAP to non-GAAP can be found in that release. For the first quarter of 2026, our consolidated revenues totaled $51.7 million compared to $67.9 million in the prior year first quarter. On a non-GAAP basis, net loss from continuing operations for the first quarter totaled $10 million or $0.36 per diluted share compared to a net loss from continuing operations of $600,000 last year or $0.22 per diluted share. In terms of segment performance, the Vera Bradley, Inc. direct segment revenues for the current year first quarter totaled $43.1 million, a 23.6% decrease from $56.4 million in the prior year first quarter. Comparable sales similarly declined 25% driven by traffic and conversion declines in our full-line and outlet stores, as Jackie Ardrey mentioned, as we experienced an overall channel shift from our stores to our online sites. Total revenues year over year were also impacted by 10 new store openings and seven store closures since the prior year first quarter. Vera Bradley indirect segment revenues for the first quarter totaled $8.6 million, a 25.6% decrease from the $11.5 million in the prior year first quarter. The decrease was related primarily to a decline in specialty and key account orders. Non-GAAP first quarter gross margin totaled $24.6 million or 47.5% of net revenues, compared to $34.8 million or 51.3% of net revenues in the prior year. The year-over-year margin rate decline was driven primarily by the channel shift from stores to online sites, as both Jackie Ardrey and I mentioned a moment ago, which also contributed meaningfully to increased outbound freight cost. Non-GAAP SG&A expense totaled $38.3 million or 74.2% of net revenues, compared to $44.7 million or 65.7% of net revenues for the prior year first quarter. The $6.4 million decrease in expenses was primarily due to cost reduction initiatives along with lower variable expenses. As we have discussed in prior updates, we are focused on strong operating discipline and have been pleased with the progress of the organization in building this discipline to date. We continue to closely examine all areas of our organization for process and cost efficiencies. First quarter non-GAAP operating loss from continuing operations totaled $13.6 million or 26.3% of net revenues compared to a $9.4 million loss or 13.8% of net revenues in the prior year. Now turning to the balance sheet. Cash and cash equivalents at the end of the quarter totaled $11.3 million. We had no borrowings on our $75 million ABL facility at quarter end. First quarter inventory decreased year over year by approximately 3% to $99.2 million compared to $101.8 million at the end of the first quarter last year. This was driven by continued changes in our merchandising processes. We have been intensely focused on redefining how we approach inventory acquisition and management, and we continue to take strategic actions in our merchandising and sourcing processes, which will both improve product flow as well as quality of inventory. These efforts have already meaningfully impacted our ability to navigate the unique challenges of the current fiscal year and will continue to drive improvements. Now shifting to guidance. As noted in both press releases this morning, the company has announced several executive and Board leadership changes. Given these changes as well as significant uncertainties surrounding the consumer environment, the company is suspending its prior year guidance and is currently not providing any forward guidance. In closing, the entire Vera Bradley, Inc. team is working hard on enormous business changes, as Jackie Ardrey and I have discussed in numerous calls. I sincerely appreciate this effort and know it will be pivotal in the next phase of the business transformation as well as improved performance in the future. Jackie Ardrey? Jackie Ardrey: In closing, I would like to thank the entire team at Vera Bradley, Inc. for their hard work and dedication. I am proud of the transformational work that we have done during my time here. And while it has taken longer than I had hoped, I believe the company is on track to deliver improved performance going forward. This concludes our call today. Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 996%* — a market-crushing outperformance compared to 174% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. See the stocks » *Stock Advisor returns as of June 9, 2025 This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Parts of this article were created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. 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