Thursday, December 07, 2017 1:00 am
Vera Bradley earnings fall
CEO says expenses also down amid 3-year turnaround
SHERRY SLATER | The Journal Gazette
Vera Bradley Inc. on Wednesday reported 1 cent of profit for each basic share of its stock last quarter as executives continue their quest to rekindle the once red-hot retailer.
The Fort Wayne company's reported earnings plummeted by more than $8.4 million to $359,000 for the third quarter from $8.78 million for last year's third quarter.
Vera Bradley designs, makes and sells women's handbags, luggage, accessories and home decor items. Like many retailers, the company follows a fiscal calendar that ends in late January.
Vera Bradley also posted net revenue of $114 million for the three months ended Oct. 28. That's a 10 percent decline from sales of almost $127 million for the same period of 2016.
Among the special charges for the most recent period were $3.7 million in store impairment, $1.8 million in severance and $1.5 million in strategic plan consulting fees. Amounts reflect after-tax totals.
Excluding those expenses, the company's earnings were $8.3 million, or 23 cents per diluted share.
CEO Rob Wallstrom put a positive spin on the financial filing, saying in a statement that efforts to cut expenses have moved ahead more quickly than expected.
“As we discussed last quarter, we have launched Vision 20/20, an aggressive plan to turn around our business over the next three years,” he said, adding that the company will offer fewer sales and discontinue less popular products.
Vera Bradley is now in the fourth quarter of its fiscal year 2018. Company officials revealed in a Securities and Exchange Commission filing that they expect revenue to drop by $30 million to $50 million in fiscal 2019 as compared with fiscal 2018.
Wallstrom's strategy includes focusing on customers and “driving brand desirability through product and marketing innovation, newness and creativity.”
Vera Bradley co-founder Barbara Bradley Baekgaard gave up creative control of the company effective Sept. 1. She was replaced by Beatrice Mac Cabe, who joined the company in 2016.
Baekgaard continues to be employed by the company and remains on its board. She is focusing on the Vera Bradley Foundation for Breast Cancer, a planned local boutique hotel, and personal appearances to support her book, “A Colorful Way of Living.” All of Baekgaard's royalties from the publication go to the foundation.
Wall Street apparently likes the direction Vera Bradley is taking. The company's shares closed Wednesday at $11.03, up $2.39, in trading on the New York Stock Exchange.