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Vera Bradley Inc VRA shares are trading lower following a worse-than-expected first-quarter FY25 earnings. The company reported a first-quarter sales decline of 14.6% year-on-year to $80.

60 million, missing the analyst consensus estimate of $90.39 million. Adjusted EPS loss of $0.

21 widened from the prior year’s $0.09 loss. Direct segment revenue decreased by 4.

2% to $56.4 million, and Indirect segment revenues declined by 25% to $11.5 million.

The gross margin contracted 280 basis points year over year to 52%, and the gross profit dropped 18.9% to $41.9 million.

The quarter’s operating loss widened to $11.4 million, compared to $6.4 million last year.

The company held $55.2 million in cash and equivalents as of May 4. Cash used in operating activities for three months totaled $14.

5 million. Total quarter-end inventory was $125.2 million, down 12% from $142.

7 million at the end of last year’s first quarter. In the first-quarter, Vera repurchased approximately $6.3 million of its shares.

About $19.2 million remains under the company’s $50.0 million repurchase authorization that expires in December 2024.

“As anticipated, economic and pre-transformation headwinds continue to affect first half results as we prepare for our July launch, and we expect to bear the fruits of Project Restoration in the second half,” said CEO Jackie Ardrey. “We are seeing the impact of reduced visits and spending across all household incomes and channels at Vera Brad.