Picture supply: The Motley Idiot.
DATE
- Wednesday, June 11, 2025, at 9:30 a.m. EDT
CALL PARTICIPANTS
- Government Chairman — Ian Bickley
- Chief Government Officer — Jackie Ardrey
- Chief Monetary Officer — Michael Schwindle
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RISKS
- Administration suspended prior steerage on account of “important uncertainties surrounding the patron setting” and government turnover.
- Internet loss from persevering with operations (non-GAAP) elevated to $10 million from $600,000 within the prior yr’s first quarter, reflecting deteriorating profitability.
- Comparable gross sales declined 25%, pushed by decrease retailer site visitors and conversion, indicating ongoing demand stress.
- Gross margin (non-GAAP) contracted to 47.5% from 51.3% within the prior yr’s first quarter, impacted by channel combine shifts and better outbound freight prices.
TAKEAWAYS
- Income: $51.7 million, down from $67.9 million within the prior yr first quarter (non-GAAP), reflecting decrease year-over-year demand.
- Internet Loss (Non-GAAP): $10 million from persevering with operations, in comparison with $600,000 within the prior yr first quarter; diluted EPS lack of $0.36 versus $0.22.
- Retailer Footprint Adjustments: 10 new shops opened and seven closed because the prior yr, affecting whole income outcomes offset by retailer closures.
- Vera Bradley Direct Phase Income: $43.1 million, a 23.6% lower.
- Oblique Phase Income: $8.6 million, down 25.6% on account of declines in specialty and key account orders.
- Comparable Gross sales Decline: 25% lower, attributed to site visitors and conversion drops in shops and a shift to on-line channels.
- Gross Margin (Non-GAAP): $24.6 million or 47.5%, down from $34.8 million or 51.3%, pushed by adjustments in channel combine.
- SG&A Expense (Non-GAAP): $38.3 million, 74.2% of income, down from $44.7 million within the prior yr first quarter, reflecting value discount initiatives.
- Working Loss (Non-GAAP): $13.6 million, 26.3% margin loss, in comparison with a $9.4 million loss, 13.8% margin loss within the prior yr first quarter.
- Money and Money Equivalents: $11.3 million with no borrowings on the $75 million ABL facility at quarter finish.
- Stock: $99.2 million, down 3% in comparison with $101.8 million on the finish of the primary quarter final yr, pushed by adjustments in merchandising processes.
- Pura Vida Phase: Offered throughout the quarter; now labeled as discontinued operations for all monetary comparisons.
- Buyer File Composition: Just lately acquired new clients comprised 45% of the energetic 12-month file, up from 30% on the finish of the prior yr’s first quarter.
- Retailer Closures Deliberate: Plans to shut 10 unprofitable full-line shops throughout the yr to enhance profitability.
- New CFO Appointment: Martin “Marty” Lading joins as Chief Monetary Officer, with related prior transformation expertise.
- Technique and Transformation Committee: Shaped to refine strategic path and speed up operational change, joined by Andrew Meslow.
SUMMARY
Vera Bradley (VRA -18.72%) introduced government transitions, with Ian Bickley assuming interim management as government chairman following CEO Jackie Ardrey’s deliberate July departure and a nationwide CEO search. The board shaped a brand new technique and transformation committee, together with Andrew Meslow, to speed up operational and strategic initiatives. The corporate suspended earlier steerage, citing management adjustments and uncertainty within the client setting. Sale of the Pura Vida section throughout the quarter materially alters section reporting and comparative outcomes. Executives highlighted intensified efforts on value controls, model relevance, and wholesale growth, whereas acknowledging shifting buyer demographics and demand patterns.
- Schwindle mentioned, “All of the numbers I’m discussing at present are non-GAAP and exclude the costs outlined in at present’s press launch.”
- Bickley acknowledged, “I’m approaching this function not merely as a caretaker, however as somebody dedicated to driving efficiency and wanted change for the corporate.”
- The shift in clients exhibits a better proportion of youthful and new clients, influencing future product methods.
- Schwindle mentioned, “Given these adjustments in addition to important uncertainties surrounding the patron setting, the corporate is suspending its prior yr steerage and is at present not offering any ahead steerage.”
- Deliberate advertising campaigns intention to extend penetration within the 34-year-old demographic, with a July launch focusing on vacation and back-to-school intervals.
INDUSTRY GLOSSARY
- ABL facility: Asset-based lending credit score facility, secured by firm property equivalent to stock and receivables.
- Discontinued operations: Enterprise segments which were bought or divested, with monetary outcomes reported individually from persevering with operations.
- Channel combine: The proportional allocation of gross sales throughout distribution channels, equivalent to shops, on-line, and wholesale.
Full Convention Name Transcript
Ian Bickley: Thanks, Mark. Good morning, everybody. It’s a pleasure to talk with all of you. I wished to affix at present’s name to give you some perception on the adjustments which might be happening at Vera Bradley and to debate my function within the transition going ahead. However on behalf of all the board of administrators, I need to acknowledge each Jackie Ardrey and Michael Schwindle for his or her work and dedication in serving to place Vera Bradley, Inc. for its subsequent chapter on the transformation journey. And thank each for his or her dedication to facilitating a clean transition of management. We additionally want them nicely of their future endeavors.
As you heard from at present’s announcement, Jackie Ardrey will probably be departing the corporate in July. The board of administrators has launched a nationwide search to search out the following CEO. We’ve already seen many promising candidates and are targeted on hiring the very best particular person to drive Vera Bradley, Inc.’s continued transformation. Within the interim, the board believes it is very important have constant and regular management and requested me to imagine the function of government chairman till we’ve got a brand new CEO in place and able to lead the corporate once more. On this function, I will probably be working with Jackie Ardrey and the administration group to make sure a clean transition.
When Jackie Ardrey leaves in July, I’ll lead the corporate till our new CEO is onboard. Concurrent with this variation, the board has introduced the formation of a brand new technique and transformation committee. The aim of the committee is to work with the administration group and incoming management in refining the corporate’s strategic path and future progress initiatives, and speed up the corporate’s operational transformation. Director Andrew Meslow, former CEO of Bathtub and Physique Works, is becoming a member of me on this committee. We’re delighted that Andrew is prepared to serve on this necessary function. I’m approaching this function not merely as a caretaker, however as somebody dedicated to driving efficiency and wanted change for the corporate.
The board believes we should speed up our transformation and enhance our outcomes. We’ll give attention to refining our technique whereas driving operational efficiencies and price financial savings to enhance profitability and efficiency. I deliver over thirty years of related trade expertise, together with quickly scaling companies in addition to driving each model and operational enterprise transformation. I used to be president of Coach’s Worldwide Group and have served as an unbiased director on the Crocs board since 2015. Extra lately, I acted because the interim CEO at The Physique Store the place I helped stabilize the enterprise and navigate it by means of a profitable gross sales course of. I’m additionally happy that Martin “Marty” Lading will probably be becoming a member of the corporate because the Chief Monetary Officer.
Marty started his profession at Procter and Gamble and has intensive expertise in numerous CFO roles and likewise has a powerful monitor document of driving operational transformation and quickly scaling companies in each the private and non-private area. Having labored for manufacturers equivalent to Coach, Supreme, and most lately at Noodle. I’ve beforehand labored with Marty and look ahead to the numerous contribution he could make to enhancing efficiency and accelerating the tempo of change. However the present outcomes, Vera Bradley, Inc. is an iconic model with robust consciousness and deep emotional connections with shoppers of all generations.
I’m personally optimistic in regards to the alternative to revive the model’s cultural relevance with a brand new era of shoppers in addition to with lots of its longtime followers. Whereas on the identical time accelerating the simplification of the corporate’s working mannequin to drive better agility and effectivity. I look ahead to main and overseeing the continuation and acceleration of this necessary work till a brand new CEO has been introduced on board. I’m now going to show the decision over to Jackie Ardrey and Michael Schwindle to debate Q1 outcomes. Jackie Ardrey?
Jackie Ardrey: Thanks, Ian, and thanks all for becoming a member of us. I want to additionally take a second to thank Ian Bickley and our total Board of Administrators for his or her help and steerage since becoming a member of in 2022. I’m additionally grateful for the Board’s help throughout this transition as I step down from my management place. I’ll start with a evaluation of our first quarter earlier than turning the decision over to Michael Schwindle to debate the financials in better element. Our first quarter outcomes got here near plan because the residents of our complete strategic initiative to rework our enterprise mannequin and model positioning continues to enhance.
The pivots we’re making are beginning to resonate and the composition of our buyer file is starting to meaningfully shift. I’m significantly happy with how the group is embracing new alternatives, particularly in wholesale, whereas we react to demand and buyer suggestions. Whereas we’re on the trail of restoring and modernizing the Vera Bradley, Inc. model by means of the 4 pillars of product, model, buyer, and channel, we acknowledge that we have to supply a greater stability of recent and heritage product and are working to extend our penetration of basic Vera Bradley, Inc. product. We’ve introduced again heritage types, developed new heritage reimagined collections, elevated deliveries of licensed merchandise, and returned fan favorites to the assortment.
We’ve additionally addressed buyer suggestions about zippers, pockets, and adjustments in strap size. We stay targeted on being the place she outlets. We’ve rapidly constructed momentum behind the technique and are efficiently diversifying our wholesale accounts with new relationships. We shipped our order to Costco in Q1, launched on City Outfitters market final week, continued to ship robust income will increase on Goal market, and have a wholesome pipeline of recent partnerships for the remainder of the yr, together with unique merchandise for Anthropologie. These focused partnerships are based mostly on knowledge insights from each our present buyer and lookalike potential clients and have guided our efforts and outreach. Our efficiency on Goal Market was a notable standout in Q1.
The distinctive outcomes have led to additional discussions on how greatest to maximise the partnership. Our success with Goal demonstrates the significance of being the place she outlets. Our first quarter revenues have been $51.7 million with combined direct channel efficiency. Visitors and conversion declines impacted the enterprise, particularly within the outlet and model shops. E-commerce revenues are stronger, significantly within the worth channels of our on-line outlet and Goal market. Our annual outlet sale occurred principally in Q1, the place we welcomed tens of hundreds of consumers to Fort Wayne, Indiana and achieved our gross sales plan. The oblique section was a brilliant spot in Q1, over-delivering by double digits as a few of our key initiatives began to bear fruit.
Channel combine and buyer habits impacted gross margins within the quarter although, primarily pushed by materials channel combine shifts. In most channels, clients continued to exhibit pricing sensitivity evidenced by considerably larger clearance penetration regardless of related stock ranges and promotional positioning. In mild of this, we’re testing worth elasticity by means of promo changes and are continuing with plans to shut 10 unprofitable full-line retailer places this yr. Turning to product newness. We launched our new child bag assortment and a baggage program within the model channels in addition to continued relaunches of previous buyer favorites within the outlet channel, together with the extraordinarily profitable replace of the cult favourite, Glenna Satchel Bag.
Throughout Q1, we continued to see divergence in buyer habits by revenue degree, which we consider is expounded to macroeconomic stress. Nonetheless, we’re seeing encouraging shifts in our buyer file. On the finish of the quarter, lately acquired new clients comprised 45% of our energetic twelve-month file versus 30% final yr. These lately acquired clients have a unique age and revenue profile than our present clients and are exhibiting barely completely different product affinities, which we’re leaning into to tell future assortments. To additional help our progress in driving buyer progress within the 34-year-old demographic, our new social advertising marketing campaign launches in July and can run by means of the vacation season.
It would characteristic a return to nostalgia and enjoyable highlighting the longstanding emotional connection of the Vera Bradley, Inc. model, in addition to providing some thrilling new product introductions that may delight each new and present clients. Trying ahead, buyer favorites just like the Vera tote franchise will return to the outlet channel whereas conventional lanyard types will seem quickly in each model and outlet channels in addition to some thrilling new IP collections and key objects for again to high school. Above all, we are going to proceed to supply heritage patterns and styling in new reimagined and enjoyable methods that may enchantment to each present and new clients.
Now I’ll flip the decision over to Michael Schwindle, who will focus on our monetary ends in extra element.
Michael Schwindle: Thanks, Jackie Ardrey. Good morning, everybody, and thanks for becoming a member of us. I’ve a couple of temporary feedback to make about our efficiency for the quarter. As a reminder, we did full the sale of Pura Vida throughout the first quarter. Consequently, the operations of Pura Vida have been labeled as discontinued operations within the consolidated monetary statements. Prior interval quantities have additionally been retrospectively adjusted to evolve to the present interval presentation. For the sake of readability, all of the numbers I’m discussing at present are non-GAAP and exclude the costs outlined in at present’s press launch.
A whole element of things excluded from the non-GAAP numbers in addition to a reconciliation of GAAP to non-GAAP could be present in that launch. For the primary quarter of 2026, our consolidated revenues totaled $51.7 million in comparison with $67.9 million within the prior yr first quarter. On a non-GAAP foundation, internet loss from persevering with operations for the primary quarter totaled $10 million or $0.36 per diluted share in comparison with a internet loss from persevering with operations of $600,000 final yr or $0.22 per diluted share. By way of section efficiency, the Vera Bradley, Inc. direct section revenues for the present yr first quarter totaled $43.1 million, a 23.6% lower from $56.4 million within the prior yr first quarter.
Comparable gross sales equally declined 25% pushed by site visitors and conversion declines in our full-line and outlet shops, as Jackie Ardrey talked about, as we skilled an total channel shift from our shops to our on-line websites. Whole revenues yr over yr have been additionally impacted by 10 new retailer openings and 7 retailer closures because the prior yr first quarter. Vera Bradley oblique section revenues for the primary quarter totaled $8.6 million, a 25.6% lower from the $11.5 million within the prior yr first quarter. The lower was associated primarily to a decline in specialty and key account orders.
Non-GAAP first quarter gross margin totaled $24.6 million or 47.5% of internet revenues, in comparison with $34.8 million or 51.3% of internet revenues within the prior yr. The year-over-year margin charge decline was pushed primarily by the channel shift from shops to on-line websites, as each Jackie Ardrey and I discussed a second in the past, which additionally contributed meaningfully to elevated outbound freight value. Non-GAAP SG&A expense totaled $38.3 million or 74.2% of internet revenues, in comparison with $44.7 million or 65.7% of internet revenues for the prior yr first quarter. The $6.4 million lower in bills was primarily on account of value discount initiatives together with decrease variable bills.
As we’ve got mentioned in prior updates, we’re targeted on robust working self-discipline and have been happy with the progress of the group in constructing this self-discipline thus far. We proceed to intently study all areas of our group for course of and price efficiencies. First quarter non-GAAP working loss from persevering with operations totaled $13.6 million or 26.3% of internet revenues in comparison with a $9.4 million loss or 13.8% of internet revenues within the prior yr. Now turning to the stability sheet. Money and money equivalents on the finish of the quarter totaled $11.3 million. We had no borrowings on our $75 million ABL facility at quarter finish.
First quarter stock decreased yr over yr by roughly 3% to $99.2 million in comparison with $101.8 million on the finish of the primary quarter final yr. This was pushed by continued adjustments in our merchandising processes. We’ve been intensely targeted on redefining how we method stock acquisition and administration, and we proceed to take strategic actions in our merchandising and sourcing processes, which can each enhance product stream in addition to high quality of stock. These efforts have already meaningfully impacted our skill to navigate the distinctive challenges of the present fiscal yr and can proceed to drive enhancements. Now shifting to steerage.
As famous in each press releases this morning, the corporate has introduced a number of government and Board management adjustments. Given these adjustments in addition to important uncertainties surrounding the patron setting, the corporate is suspending its prior yr steerage and is at present not offering any ahead steerage. In closing, all the Vera Bradley, Inc. group is working onerous on monumental enterprise adjustments, as Jackie Ardrey and I’ve mentioned in quite a few calls. I sincerely respect this effort and know will probably be pivotal within the subsequent section of the enterprise transformation in addition to improved efficiency sooner or later. Jackie Ardrey?
Jackie Ardrey: In closing, I want to thank all the group at Vera Bradley, Inc. for his or her onerous work and dedication. I’m happy with the transformational work that we’ve got performed throughout my time right here. And whereas it has taken longer than I had hoped, I consider the corporate is on monitor to ship improved efficiency going ahead. This concludes our name at present.
Operator: Girls and gents, this does conclude at present’s teleconference. You could disconnect your strains at the moment. Thanks to your participation and have an exquisite day.
