Buzzer within Traders Radar: Vera Bradley, Inc. (NASDAQ:VRA)

On Friday 31 March, Vera Bradley, Inc. (NASDAQ:VRA) has shown upward/downward move of +1.67% and ended the last trade at $10.95. The trading volume was recorded to 426,701 shares as compared to average traded volume of 382,028 shares.

Vera Bradley, Inc. (VRA) recently reported its financial results for the fourth quarter and fiscal year ended February 2, 2019 (“Fiscal 2019”).

Summary of Financial Performance for the Fourth Quarter

Net revenues totaled $118.2M for the current year fourth quarter ended February 2, 2019, contrast to $132.0M in the previous year fourth quarter ended February 3, 2018.  Revenues were at the high end of the Company’s guidance range of $114 to $119M.

For the current year fourth quarter, the Company posted net income of $8.6M, or $0.25 per diluted share, which was at the high end of the Company’s guidance range of $0.22 to $0.25 per diluted share.

Summary of Financial Performance for the Fiscal Year

Net revenues totaled $416.1M for Fiscal 2019, contrast to $454.6M in Fiscal 2018.  Revenues were at the upper end of the Company’s $412 to $417M guidance range.

For Fiscal 2019, the Company posted net income of $20.8M, or $0.59 per diluted share. “We are happy with our Fiscal 2019 performance, which was not only at the high end of our guidance range of $0.57 to $0.60 per diluted share but was meaningfully better than the $0.35 to $0.45 per share yearly guidance we provided at this time last year,” Wallstrom noted.

For Fiscal 2018, the Company posted net income of $7.0M, or $0.19 per diluted share.  These results included $14.5M of after-tax charges comprised of:

  • severance charges of $4.2M;
  • store impairment charges of $4.0M;
  • planned plan (Vision 20/20) consulting fees of $2.9M;
  • a tax charge of $2.1M related to recent federal tax reform legislation; and
  • other charges of $1.3M, including inventory adjustments related to the discontinuation of certain product categories and net lease termination charges.

On a non-GAAP basis, not including these charges, the Company’s net income totaled $21.5M, or $0.60 per diluted share, for Fiscal 2018.

Fourth Quarter Details

The previous year non-GAAP fourth quarter income statement numbers referenced below exclude the before outlined severance, store impairment, and other charges.

Current year fourth quarter Direct section revenues totaled $98.0M, an 11.2% decrease from $110.4M in the previous year fourth quarter.  Comparable sales (including e-commerce) reduced 11.2% for the quarter (reflecting a 2.4% decline in comparable store sales and a 27.4% decrease in e-commerce sales).  Comparable sales continued to be negatively influenced by the predictable year-over-year declines in store and e-commerce traffic.  The Company closed 10 full-line stores and opened six factory outlet stores in the last twelve months.  In the previous year fourth quarter, the additional week contributed about $3.0M in net revenues.

Indirect section revenues reduced 6.4% to $20.2M from $21.6M in the previous year fourth quarter, reflecting a reduction in orders coupled with a reduction in the number of specialty accounts.  In the previous year fourth quarter, the additional week contributed about $1.1M in net revenues.

The company has PEG ratio of 1.40 and price to cash ratio of 2.70. Net profit margin of the firm was recorded at 5.00% and operating profit margin was calculated at 6.50% while gross profit margin was measured as 57.30%. Beta factor, which measures the riskiness of the security, was registered at 0.74.

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