Retail and Consumer Archives

Release – 1-800-FLOWERS.COM, Inc. Reports Fiscal 2025 First Quarter Results

Posted on October 31, 2024October 31, 2024 by aweinsoff@channelchek.com

Oct 31, 2024

Generates Revenues of $242.1 million and a Net Loss of $34.2 million

Gross Profit Margin Increases 20 basis points to 38.1%

Reports Adjusted EBITDA⁽¹⁾ Loss of $27.9 million

(1) Refer to “Definitions of Non-GAAP Financial Measures” and the tables attached at the end of this press release for reconciliation of non-GAAP results to applicable GAAP results.)

JERICHO, N.Y.–(BUSINESS WIRE)– 1-800-FLOWERS.COM, Inc. (NASDAQ: FLWS), a leading provider of gifts designed to help inspire customers to give more, connect more, and build more and better relationships, today reported results for its Fiscal 2025 first quarter ended September 29, 2024.

“Our first quarter performance generally came in-line with our expectations, as we began to see a slight improvement in our e-commerce revenue trends during the quarter, our gross profit margin continued to grow, and we reduced expenses as a result of our Work Smarter initiatives to operate more efficiently,” said Jim McCann, Chairman and Chief Executive Officer of 1-800-FLOWERS.COM, Inc. “We expect the improvement in our e-commerce revenue trends to accelerate as we move closer to the holiday selling season, and our revenues will further benefit from the growth of wholesale orders this year. Through the Relationship Innovation initiatives that we implemented over the last two years, we have expanded our offerings and broadened our price points, providing gift givers with more choices at prices that span from budget-friendly to premium. We look forward to helping our customers connect and express their sentiments with the important people in their lives.”

Fiscal 2025 First Quarter Highlights

Total consolidated revenues decreased 10.0% to $242.1 million, as compared with the prior year period.
E-commerce revenues decreased 8.0% over the prior year period, comprised of a 6.5% decline in orders and a 1.5% decline in Average Order Value (AOV).
Gross profit margin increased 20 basis points to 38.1%, as compared with the prior year period.
Operating expenses declined $0.2 million to $139.3 million, as compared with the prior year period. Excluding the impact of non-recurring charges in the current period associated with new systems implementation costs, as well as the impact of the Company’s non-qualified deferred compensation plan in both periods, operating expenses declined by $4.2 million to $135.8 million, as compared with the prior year period.
Net loss for the quarter was $34.2 million, or ($0.53) per share, as compared to a net loss of $31.2 million, or ($0.48) per share in the prior year period.
Adjusted Net Loss¹ was $32.9 million, or ($0.51) per share, compared with an Adjusted Net Loss¹ of $31.2 million, or ($0.48) per share, in the prior year period.
Adjusted EBITDA¹ loss for the quarter was $27.9 million, as compared with an Adjusted EBITDA¹ loss of $22.5 million in the prior year period.
1-800-FLOWERS.COM, Inc. was named one of Newsweek’s Most Admired Workplaces for 2025.

Segment Results

The Company provides Fiscal 2025 first quarter financial results for its Gourmet Foods and Gift Baskets, Consumer Floral and Gifts, and BloomNet^® segments in the tables attached to this release and as follows:

Gourmet Foods and Gift Baskets: Revenues for the quarter declined 14.4% to $84.0 million as compared with the prior year period. This decline reflects the timing of approximately $3.0 million of wholesale orders that shifted from the first quarter into the second quarter. Gross profit margin increased 50 basis points to 32.0%, benefiting from the Company’s inventory optimization efforts and a decline in certain commodity costs. Excluding the impact of the systems implementation costs, adjusted segment contribution margin¹ loss was $11.3 million, compared with a loss of $11.0 million in the prior year period.
Consumer Floral & Gifts: Revenues for the quarter declined 4.9% to $135.2 million as compared with the prior year period. Gross profit margin increased 30 basis points to 39.9%. Segment contribution margin¹ was $4.9 million, compared with $8.8 million in the prior year period.
BloomNet: Revenues for the quarter declined 20.1% to $23.1 million as compared with the prior year period. Revenue and gross margin were impacted by the lower volume of lower margin orders processed by BloomNet. Gross profit margin decreased 20 basis points to 50.0% due to deleveraging on the lower sales volume. Segment contribution margin¹ was $6.8 million, compared with $9.4 million in the prior year period.

Company Guidance

For Fiscal 2025, the Company continues to expect its revenue trend to improve as the fiscal year progresses benefiting from the Company’s Relationship Innovation initiatives that have expanded the Company’s product offerings, broadened price points, and enhanced the user experience, combined with increased marketing spend. The Adjusted EBITDA range reflects the acknowledgement that the consumer environment remains uncertain.

As a result, for Fiscal 2025 the Company continues to expect:

total revenues on a percentage basis to be in a range of flat to a decrease in the low-single digits, as compared with the prior year;
Adjusted EBITDA¹ to be in a range of $85 million to $95 million; and
Free Cash Flow¹ to be in a range of $45 million to $55 million.

Conference Call

The Company will conduct a conference call to discuss the above details and attached financial results today, October 31, 2024, at 8:00 a.m. (ET). The conference call will be webcast from the Investors section of the Company’s website at www.1800flowersinc.com. A recording of the call will be posted on the Investors section of the Company’s website within two hours of the call’s completion. A telephonic replay of the call can be accessed beginning at 2:00 p.m. (ET) today through November 7, 2024, at: (US) 1-877-344-7529; (Canada) 855-669-9658; (International) 1-412-317-0088; enter conference ID #: 1727189.

Definitions of non-GAAP Financial Measures:

We sometimes use financial measures derived from consolidated financial information, but not presented in our financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain of these are considered “non-GAAP financial measures” under the U.S. Securities and Exchange Commission rules. Non-GAAP financial measures referred to in this document are either labeled as “non-GAAP” or designated as such with a “1”. See below for definitions and the reasons why we use these non-GAAP financial measures. Where applicable, see the Selected Financial Information below for reconciliations of these non-GAAP measures to their most directly comparable GAAP financial measures. Reconciliations for forward-looking figures would require unreasonable efforts at this time because of the uncertainty and variability of the nature and amount of certain components of various necessary GAAP components, including, for example, those related to compensation, tax items, amortization or others that may arise during the year, and the Company’s management believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors. For the same reasons, the Company is unable to address the probable significance of the unavailable information. The lack of such reconciling information should be considered when assessing the impact of such disclosures.

EBITDA and Adjusted EBITDA:

We define EBITDA as net income (loss) before interest, taxes, depreciation, and amortization. Adjusted EBITDA is defined as EBITDA adjusted for the impact of stock-based compensation, Non-Qualified Plan Investment appreciation/depreciation, and for certain items affecting period-to-period comparability. See Selected Financial Information for details on how EBITDA and Adjusted EBITDA were calculated for each period presented. The Company presents EBITDA and Adjusted EBITDA because it considers such information meaningful supplemental measures of its performance and believes such information is frequently used by the investment community in the evaluation of similarly situated companies. The Company uses EBITDA and Adjusted EBITDA as factors to determine the total amount of incentive compensation available to be awarded to executive officers and other employees. The Company’s credit agreement uses EBITDA and Adjusted EBITDA to determine its interest rate and to measure compliance with certain covenants. EBITDA and Adjusted EBITDA are also used by the Company to evaluate and price potential acquisition candidates. EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. Some of the limitations are: (a) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, the Company’s working capital needs; (b) EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on the Company’s debts; and (c) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future and EBITDA does not reflect any cash requirements for such capital expenditures. EBITDA and Adjusted EBITDA should only be used on a supplemental basis combined with GAAP results when evaluating the Company’s performance.

Segment Contribution Margin and Adjusted Segment Contribution Margin

We define Segment Contribution Margin as earnings before interest, taxes, depreciation, and amortization, before the allocation of corporate overhead expenses. Adjusted Segment Contribution Margin is defined as Segment Contribution Margin adjusted for certain items affecting period-to-period comparability. See Selected Financial Information for details on how Segment Contribution Margin and Adjusted Segment Contribution Margin were calculated for each period presented. When viewed together with our GAAP results, we believe Segment Contribution Margin and Adjusted Segment Contribution Margin provide management and users of the financial statements meaningful information about the performance of our business segments. Segment Contribution Margin and Adjusted Segment Contribution Margin are used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. The material limitation associated with the use of Segment Contribution Margin and Adjusted Segment Contribution Margin is that they are an incomplete measure of profitability as they do not include all operating expenses or non-operating income and expenses. Management compensates for this limitation when using these measures by looking at other GAAP measures, such as Operating Income and Net Income.

Adjusted Net Income (Loss) and Adjusted or Comparable Net Income (Loss) Per Common Share:

We define Adjusted Net Income (Loss) and Adjusted or Comparable Net Income (Loss) Per Common Share as Net Income (Loss) and Net Income (Loss) Per Common Share adjusted for certain items affecting period-to-period comparability. See Selected Financial Information below for details on how Adjusted Net Income (Loss) Per Common Share and Adjusted or Comparable Net Income (Loss) Per Common Share were calculated for each period presented. We believe that Adjusted Net Income (Loss) and Adjusted or Comparable Net Income (Loss) Per Common Share are meaningful measures because they increase the comparability of period-to-period results. Since these are not measures of performance calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, GAAP Net Income (Loss) and Net Income (Loss) Per Common Share, as indicators of operating performance and they may not be comparable to similarly titled measures employed by other companies.

Free Cash Flow:

We define Free Cash Flow as net cash provided by operating activities less capital expenditures. The Company considers Free Cash Flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases of fixed assets, which can then be used to, among other things, invest in the Company’s business, make strategic acquisitions, strengthen the balance sheet, and repurchase stock or retire debt. Free Cash Flow is a liquidity measure that is frequently used by the investment community in the evaluation of similarly situated companies. Since Free Cash Flow is not a measure of performance calculated in accordance with GAAP, it should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. A limitation of the utility of Free Cash Flow as a measure of financial performance is that it does not represent the total increase or decrease in the Company’s cash balance for the period.

About 1-800-FLOWERS.COM, Inc.

1-800-FLOWERS.COM, Inc. is a leading provider of gifts designed to help inspire customers to give more, connect more, and build more and better relationships. The Company’s e-commerce business platform features an all-star family of brands, including: 1-800-Flowers.com®, 1-800-Baskets.com®, Cheryl’s Cookies®, Harry & David®, PersonalizationMall.com®, Shari’s Berries®, FruitBouquets.com®, Things Remembered®, Moose Munch®, The Popcorn Factory®, Wolferman’s Bakery®, Vital Choice®, Simply Chocolate® and Scharffen Berger®. Through the Celebrations Passport® loyalty program, which provides members with free standard shipping and no service charge on eligible products across our portfolio of brands, 1-800-FLOWERS.COM, Inc. strives to deepen relationships with customers. The Company also operates BloomNet®, an international floral and gift industry service provider offering a broad-range of products and services designed to help members grow their businesses profitably; Napco℠, a resource for floral gifts and seasonal décor; DesignPac Gifts, LLC, a manufacturer of gift baskets and towers; Alice’s Table®, a lifestyle business offering fully digital livestreaming and on demand floral, culinary and other experiences to guests across the country; and Card Isle®, an e-commerce greeting card service. 1-800-FLOWERS.COM, Inc. was recognized among America’s Most Trustworthy Companies by Newsweek. 1-800-FLOWERS.COM, Inc. was also recognized as one of America’s Most Admired Workplaces for 2025 by Newsweek and was named to the Fortune 1000 list in 2022. Shares in 1-800-FLOWERS.COM, Inc. are traded on the NASDAQ Global Select Market, ticker symbol: FLWS. For more information, visit 1800flowersinc.com.

FLWS–COMP
FLWS-FN

Special Note Regarding Forward Looking Statements:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent the Company’s current expectations or beliefs concerning future events and can generally be identified using statements that include words such as “estimate,” “expects,” “project,” “believe,” “anticipate,” “intend,” “plan,” “foresee,” “forecast,” “likely,” “should,” “will,” “target” or similar words or phrases. These forward-looking statements are subject to risks, uncertainties, and other factors, many of which are outside of the Company’s control, which could cause actual results to differ materially from the results expressed or implied in the forward-looking statements, including, but not limited to, statements regarding the Company’s ability to achieve its guidance for the full Fiscal year; the Company’s ability to leverage its operating platform and reduce its operating expense ratio; its ability to successfully integrate acquired businesses and assets; its ability to successfully execute its strategic initiatives; its ability to cost effectively acquire and retain customers; the outcome of contingencies, including legal proceedings in the normal course of business; its ability to compete against existing and new competitors; its ability to manage expenses associated with sales and marketing and necessary general and administrative and technology investments; its ability to reduce promotional activities and achieve more efficient marketing programs; and general consumer sentiment and industry and economic conditions that may affect levels of discretionary customer purchases of the Company’s products. The Company undertakes no obligation to publicly update any of the forward-looking statements, whether because of new information, future events or otherwise, made in this release or in any of its SEC filings. Consequently, you should not consider any such list to be a complete set of all potential risks and uncertainties. For a more detailed description of these and other risk factors, refer to the Company’s SEC filings, including the Company’s Annual Reports on Form 10-K and its Quarterly Reports on Form 10-Q.

Note: The following tables are an integral part of this press release without which the information presented in this press release should be considered incomplete.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241031507666/en/

Investor Contact:

Andy Milevoj

amilevoj@1800flowers.com

Media Contact:

Cherie Gallarello

cgallarello@1800flowers.com

Source: 1-800-FLOWERS.COM, Inc.

US Goods Trade Deficit Hits 2.5-Year High Amid Import Surge

Posted on October 29, 2024October 29, 2024 by slightbourne@noblecapitalmarkets.com

Key Points:
– Goods trade deficit rose by 14.9% to $108.2 billion, the highest in over two years.
– Goods imports increased by 3.8%, reflecting a rise in consumer and capital goods.
– Inventory growth in retail, especially for motor vehicles, is likely to cushion GDP impact.

The U.S. goods trade deficit soared in September to its highest level since March 2022, reaching $108.2 billion. This rise, primarily driven by a 3.8% jump in imports, underscores strong consumer demand but has led some economists to scale back their growth projections for the third quarter. Released by the Commerce Department, the deficit reflects the challenges of balancing robust domestic consumption with slowing exports, which declined by 2%.

Economists noted that while a larger trade deficit traditionally weighs down gross domestic product (GDP), this impact may be mitigated by increased retail inventories, particularly in motor vehicles. Consumer spending remains strong, anticipated to be a major driver of growth for the third quarter. Yet, the trade data has led analysts to revise their economic forecasts downward, with some now expecting annualized GDP growth to hit 2.7% rather than the initially forecasted 3.2%.

Imports of consumer goods led the surge, climbing by 5.8%, while food imports saw a 4.6% boost. The demand for capital goods also rose, with businesses stocking up on equipment and industrial supplies, including petroleum and automotive parts. Analysts suggest that businesses were also building up inventories in anticipation of potential supply disruptions, such as the recently resolved dockworkers strike.

Although the high import figures signal economic strength, the dip in exports of consumer goods, industrial supplies, and capital goods points to potential headwinds for U.S. trade competitiveness. The export decline in consumer goods, down by 6.3%, indicates that external demand may be softening, potentially challenging U.S. exporters.

Meanwhile, both wholesale and retail inventories saw shifts in September. Wholesale inventories slipped slightly by 0.1%, while retail inventories rose 0.8%, reflecting sustained consumer demand. Motor vehicle and parts inventories surged by 2.1%, while non-automotive retail inventories grew modestly. Rising inventories support GDP growth, though they also suggest that retailers may have overestimated sales for the period.

Economists are closely watching inventory levels as they provide insight into whether consumer demand can match the increased supply. According to Carl Weinberg, chief economist at High Frequency Economics, an unexpected rise in retail inventories could signal a slowdown in consumer demand but could still provide short-term GDP support.

The recent trade data arrives ahead of Wednesday’s anticipated GDP report, which is expected to provide a clearer picture of the U.S. economy’s trajectory. While strong consumer demand is evident, analysts remain cautious, noting that the elevated goods trade deficit may continue to be a drag on economic growth in the near term.

CVS Health Replaces CEO Karen Lynch Amid Earnings Struggles and Investor Pressure

Posted on October 21, 2024October 21, 2024 by slightbourne@noblecapitalmarkets.com

Key Points:
– CVS ousts CEO Karen Lynch, appointing David Joyner as the new Chief Executive.
– Lynch’s departure follows repeated earnings misses and rising investor concerns.
– CVS stock dropped 7.9% following the leadership change announcement.

CVS Health has made a major leadership change, replacing CEO Karen Lynch with David Joyner, following a period of financial struggles and pressure from activist investors. Joyner, a seasoned executive with extensive experience in pharmacy benefits management (PBM), took over as CEO on Thursday. His appointment comes as CVS grapples with missed earnings targets, rising medical costs, and competition from rivals like Amazon and Walmart.

Shares of CVS fell nearly 8% after the announcement, adding to a 19% drop this year. The company also revealed that its third-quarter earnings would miss Wall Street expectations, prompting CVS to pull its 2024 earnings guidance due to high medical expenses. In a memo to employees, Joyner acknowledged the challenges ahead and called for support in stabilizing the company’s operations. He emphasized the need for operational and financial improvements to maintain CVS’s position as a leading healthcare provider.

CVS’s financial troubles stem largely from its health benefits division, particularly its Aetna insurance arm, where medical costs have outpaced expectations. The company announced a $1.1 billion charge to cover excess medical costs, further straining its finances. Analysts had anticipated issues in the health benefits segment, but CVS’s medical loss ratio of 95.2% for the third quarter was worse than expected, raising concerns among investors.

In response to these difficulties, hedge fund Glenview Capital Management, a CVS investor, has been pushing for changes within the company. Glenview supported the decision to replace Lynch, viewing it as a necessary step toward improving CVS’s financial performance and governance. In a statement, Glenview expressed interest in working with Joyner to enhance the company’s operations and create value for stakeholders.

Lynch’s departure ends a tumultuous tenure as CEO, which began in February 2021. She led CVS’s expansion into healthcare services, acquiring companies like Oak Street Health and Signify Health to strengthen CVS’s Medicare Advantage business. However, the timing of these acquisitions coincided with tighter restrictions on Medicare spending imposed by the Biden administration, which negatively impacted CVS’s margins.

CVS also faced setbacks in its PBM division, Caremark, losing a significant contract with Centene Corp., which chose to partner with Cigna instead. Caremark is also under investigation by the Federal Trade Commission (FTC) for its role in rising drug prices, including insulin. Joyner, who previously led Caremark, defended the company’s practices before Congress earlier this year, and his expertise in this area is expected to help CVS navigate regulatory challenges and increased competition.

The health benefits segment remains CVS’s most significant concern, particularly as the company experienced rapid growth in Medicare Advantage membership in 2024. However, the costs associated with that growth have exceeded projections, prompting CVS to withdraw its earnings forecast for 2024. The company had previously lowered its earnings guidance several times this year, with the most recent estimate between $6.40 and $6.55 per share. Analysts had already predicted a 25% drop in earnings per share for 2024 compared to the previous year, and that figure is expected to fall further.

With Joyner at the helm, CVS faces a critical moment. The board unanimously supported his appointment, and he is tasked with steering the company through its current challenges and restoring investor confidence in its future.

Apple Kicks Off iPhone 16 AI Event: What Investors Should Watch For

Posted on September 9, 2024September 9, 2024 by slightbourne@noblecapitalmarkets.com

Apple’s much-anticipated iPhone 16 event has begun, unveiling new Watches, AirPods, and a suite of AI-focused upgrades to its latest smartphone. At the Steve Jobs Theater in Cupertino, California, Apple CEO Tim Cook introduced the new Series 10 Watch, AirPods 4, and teased the AI-powered iPhone 16, which marks Apple’s first smartphone designed around artificial intelligence. While the product launch showcased exciting innovations, the event holds significant weight for investors who are closely watching how Apple navigates a slowing market and fierce competition.

With Apple’s share price remaining largely unchanged during the event, the unveiling signals that while new products are always welcome, the critical question for investors is whether this AI push will translate into meaningful revenue growth. Apple’s AI initiative, Apple Intelligence, aims to improve the user experience with advanced text, image, and content generation features. The company is betting on this technology to help boost sales, especially as iPhone revenues, which accounted for over half of Apple’s $383 billion in sales last year, have faced slower growth in recent quarters.

This AI-driven upgrade comes at a pivotal moment. Apple’s competitors, particularly in China, are aggressively expanding their AI capabilities. Notably, Huawei pre-empted Apple’s launch with its own tri-fold smartphone announcement, boasting over 3 million pre-orders. Huawei’s ability to navigate U.S. sanctions and its dominance in the Chinese market puts additional pressure on Apple, which has struggled in the region due to increasing competition and government restrictions. For investors, Apple’s performance in China remains a critical factor, as AI features will take longer to roll out in that market, further delaying potential growth.

The release of the iPhone 16 with Apple Intelligence is expected to drive upgrades, but the rollout of key AI features will be gradual. Apple plans to introduce these updates in the U.S. this fall, with a wider Siri upgrade slated for early 2025. However, investors will be keen to see whether Apple’s AI features can spur a major upgrade cycle, particularly as Google and other competitors are accelerating their own AI integrations.

Investors are not just looking at consumer interest but also the broader AI battle in the tech industry. Google, which has already showcased advanced AI features, such as Gemini Live, is also vying for dominance in the smartphone market. Google’s push into AI further intensifies competition in a segment where Apple has long reigned supreme.

Apple’s stock performance and future growth will be closely tied to how well the iPhone 16 and its AI capabilities resonate with consumers. The company is relying on this new technology to entice customers to upgrade, but it’s also worth noting that economic uncertainty and evolving tech regulations could influence both customer demand and the company’s bottom line.

This event comes on the heels of Apple’s recent AI-focused updates at its developer conference in June, where it laid the groundwork for the Apple Intelligence platform. With global demand for AI-driven features rising, particularly in markets like China, Apple is positioning itself for what could be the next major growth frontier. However, investors will need to watch for signs that this new strategy can deliver in the short term, especially as competition from companies like Huawei and Google heats up.

For investors, the big takeaway is whether Apple’s AI push will be enough to spur demand in a weakening smartphone market. The success of the iPhone 16 and its AI features could define Apple’s trajectory in the coming quarters, particularly as it faces increased competition and slowing sales in key markets.

Consumer Spending Surge: Fed’s Rate Cut Hopes Face Economic Resilience

Posted on August 30, 2024August 30, 2024 by slightbourne@noblecapitalmarkets.com

Key Points:
– U.S. consumer spending increased 0.5% in July, showing economic strength
– Inflation remains moderate, with PCE price index rising 2.5% year-on-year
– Robust spending challenges expectations for aggressive Fed rate cuts

In a surprising turn of events, U.S. consumer spending showed remarkable strength in July, potentially altering the Federal Reserve’s monetary policy trajectory. This robust economic indicator may put a damper on expectations for aggressive interest rate cuts, particularly the anticipated half-percentage-point reduction in September.

Consumer spending, which accounts for over two-thirds of U.S. economic activity, rose by 0.5% in July, following a 0.3% increase in June. This uptick, aligning with economists’ forecasts, suggests the economy is on firmer ground than previously thought. After adjusting for inflation, real consumer spending gained 0.4%, maintaining momentum from the second quarter. Conrad DeQuadros, senior economic advisor at Brean Capital, notes, “There is nothing here to push the Fed to a half-point cut. This is not the kind of spending growth associated with recession.”

While spending surged, inflation remained relatively contained. The Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge, rose 0.2% for the month and 2.5% year-on-year. Core PCE inflation, which excludes volatile food and energy prices, increased by 0.2% monthly and 2.6% annually. These figures, while showing progress towards the Fed’s 2% target, indicate that inflationary pressures persist, potentially complicating the central bank’s decision-making process.

Despite a jump in the unemployment rate to a near three-year high of 4.3% in July, which initially stoked recession fears, the labor market continues to generate decent wage growth. Personal income rose 0.3% in July, with wages climbing at the same rate. This suggests that the slowdown in the labor market is primarily due to reduced hiring rather than increased layoffs.

Fed Chair Jerome Powell recently signaled that a rate cut was imminent, acknowledging concerns over the labor market. However, the strong consumer spending data may force the Fed to reconsider the pace and magnitude of potential rate cuts. David Alcaly, lead macroeconomic strategist at Lazard Asset Management, offers a longer-term perspective: “There’s a lot of focus right now on the pace of rate cuts in the short term, but we believe it ultimately will matter more how deep the rate-cutting cycle goes over time.”

The Atlanta Fed has raised its third-quarter GDP growth estimate to a 2.5% annualized rate, up from 2.0%. This revision, coupled with the strong consumer spending data, paints a picture of an economy that’s more resilient than many had anticipated. The increase in spending was broad-based, covering both goods and services. Consumers spent more on motor vehicles, housing and utilities, food and beverages, recreation services, and financial services. They also boosted spending on healthcare, visited restaurants and bars, and stayed at hotels.

As the Fed navigates this complex economic landscape, investors and policymakers alike will be closely watching for signs of whether the central bank will prioritize fighting inflation or supporting economic growth in its upcoming decisions. The robust consumer spending data suggests that the economy may not need as much support as previously thought, potentially leading to a more cautious approach to rate cuts.

For investors, this economic resilience presents both opportunities and challenges. While strong consumer spending bodes well for many sectors, it may also lead to a less accommodative monetary policy than some had hoped for. As always, a diversified approach and close attention to economic indicators will be crucial for navigating these uncertain waters.

Shift4’s Acquisition of Givex: A Game-Changer in the Global Payment and Loyalty Solutions Market

Posted on August 27, 2024August 27, 2024 by slightbourne@noblecapitalmarkets.com

Key Points:
– Expansion of global reach with 130,000+ new locations
– Enhanced offering with advanced gift card and loyalty programs
– Strategic alignment for increased customer value and retention

Shift4, the leading integrated payments and commerce technology company, is set to make waves in the global market with its latest acquisition announcement. The company has signed a definitive arrangement agreement to acquire Givex Corp., a renowned provider of gift cards, loyalty programs, and point-of-sale solutions. This strategic move is poised to reshape the landscape of payment processing and customer engagement technologies.

The acquisition, expected to close in the fourth quarter of this year, will significantly expand Shift4’s global footprint. With Givex’s impressive network of over 130,000 active locations across more than 100 countries, Shift4 is positioning itself as a major player in the international payments arena. This expansion not only increases Shift4’s customer base but also opens up new markets and opportunities for growth.

One of the most compelling aspects of this acquisition is the enhancement of Shift4’s service offerings. Givex brings to the table a suite of robust gift card and e-gift solutions, along with customizable loyalty programs that have been adopted by industry giants such as Nike, Marriott, and Wendy’s. These additions will allow Shift4 to offer a more comprehensive package to its existing clients, potentially increasing customer retention and attracting new business.

The synergy between the two companies is evident in their complementary technologies. Shift4’s end-to-end payment solution, combined with Givex’s value-added engagement services, creates a powerful toolkit for businesses looking to streamline their operations and enhance customer relationships. This integration is expected to deliver an unparalleled package to both companies’ customer bases, setting a new standard in the industry.

From a financial perspective, this acquisition aligns perfectly with Shift4’s capital deployment strategy. By acquiring a company with an established customer base, Shift4 is effectively lowering its customer acquisition costs while simultaneously expanding its service portfolio. This approach is likely to contribute positively to Shift4’s bottom line and create long-term value for shareholders.

The merger also presents exciting opportunities for innovation. As the payments industry continues to evolve, the combined expertise of Shift4 and Givex could lead to the development of cutting-edge solutions that address emerging market needs. This potential for innovation could be a key differentiator in a highly competitive market.

As businesses increasingly prioritize customer engagement and loyalty, the timing of this acquisition couldn’t be better. The integration of Givex’s loyalty and gift card solutions into Shift4’s existing infrastructure will enable businesses to create more personalized and rewarding experiences for their customers. This focus on customer retention and engagement is crucial in today’s market, where consumer loyalty is harder than ever to maintain.

In conclusion, Shift4’s acquisition of Givex Corp. marks a significant milestone in the company’s growth strategy. By expanding its global reach, enhancing its product offerings, and strengthening its market position, Shift4 is well-positioned to capitalize on the growing demand for integrated payment and loyalty solutions. As the transaction moves towards completion, industry observers and stakeholders will be watching closely to see how this strategic move unfolds and shapes the future of payment processing and customer engagement technologies.

The Rise of Chinese E-commerce Giants and Their Impact on US Tech Earnings

Posted on July 29, 2024July 29, 2024 by slightbourne@noblecapitalmarkets.com

Key Points:
– Temu and Shein’s rapid growth in the US market is influencing tech earnings and competition.
– These platforms leverage low prices and aggressive marketing strategies to gain market share.
– The impact of Chinese e-commerce companies on US tech giants raises questions about fair competition and trade policies.

In recent months, the e-commerce landscape in the United States has been dramatically altered by the meteoric rise of Chinese discount shopping apps Temu and Shein. As Wall Street prepares for the latest round of tech earnings reports, the influence of these platforms on industry giants like Amazon, Meta, and eBay is becoming increasingly apparent.

Temu and Shein have captured the attention of American consumers with their rock-bottom prices and aggressive marketing campaigns. Temu, which launched in the US in 2022, quickly surpassed established social media apps in popularity on the Apple App Store. Shein, present in the US market since 2017, has seen similar success. Both platforms offer incredibly low-priced goods, such as $3 shoes or $15 smartwatches, directly from Chinese manufacturers to American consumers.

The success of these platforms is partially attributed to a trade loophole known as the de minimis exception. This rule allows packages valued under $800 to enter the US duty-free, giving Chinese retailers a significant competitive advantage. Amazon’s top public policy executive, David Zapolsky, has expressed concern about this trend, suggesting that some business models may be unfairly subsidized.

The impact of Temu and Shein extends beyond just e-commerce. Their substantial ad spending has become a significant revenue source for companies like Google and Facebook. However, recent data suggests that Temu may be adjusting its marketing strategy, potentially affecting ad revenue for these tech giants.

Established e-commerce players are responding to this new competition in various ways. Amazon, while emphasizing its delivery speed advantage, is reportedly planning to launch its own discount store featuring unbranded items priced below $20. eBay has stressed its differentiated selection, while Etsy has highlighted its focus on artisan goods.

The rise of these Chinese platforms has also sparked discussions about fair competition and trade policies. US officials, along with their counterparts in the European Union, are considering closing the de minimis loophole, which could significantly impact the growth of Temu and Shein.

Despite the challenges posed by these new entrants, analysts suggest that major players like Amazon and Walmart are relatively insulated from the competition. The established e-commerce giants’ superior shipping speeds and extensive logistics networks provide a significant competitive advantage.

As the tech industry braces for the upcoming earnings reports, all eyes will be on how companies address the impact of Temu and Shein. Investors will be particularly interested in any commentary on changes in e-commerce marketplaces and shifts in ad spending patterns.

The story of Temu and Shein’s rise in the US market is more than just a tale of successful market entry. It represents a shifting dynamic in global e-commerce, raising important questions about international trade policies, fair competition, and the future of retail. As these Chinese platforms continue to grow and evolve, their impact on the US tech industry and broader economy will likely remain a topic of intense scrutiny and debate.

Noble Capital Markets Emerging Growth TMT / Consumer Conference Presentation Replays

Posted on July 26, 2024July 26, 2024 by cpatches

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Emerging Growth Public TMT/Consumer Company Executive Presentations
Q&A Sessions Moderated by Noble’s Analysts
Scheduled 1×1 Meetings with Qualified Investors

Noble Capital Markets, a full-service SEC / FINRA registered broker-dealer, dedicated exclusively to serving emerging growth companies, is pleased to present the Consumer, Communications, Media, and Technology Emerging Growth Virtual Equity Conference, taking place June 26^th and 27^th, 2024. This virtual gathering is set to be an immersive experience, bringing together a unique blend of investors, industry leaders, and experts in the consumer, communications, media, and technology sectors..

Part of Noble’s Robust 2024 Events Calendar

The Consumer, Communications, Media, and Technology Emerging Growth Virtual Equity Conference is part of Noble’s 2024 event programming, featuring a range of c-suite interviews, in-person non-deal roadshows throughout the United States, two other sector-specific virtual equity conferences, and culminating in Noble’s preeminent in-person investor conference, NobleCon20, to be held at Florida Atlantic University in Boca Raton, Florida December 3-4. Keep an eye out for the official press release on NobleCon20 coming soon.

Check out the calendar of upcoming in-person non-deal roadshows here.

What to Expect

The Consumer, Communications, Media, and Technology Emerging Growth Virtual Equity Conference will feature 2 days of corporate presentations from up to 50 innovative public consumer, communications, media, and technology companies, showcasing their latest advancements and investment opportunities. Each presentation will be followed by a fireside-style Q&A session proctored by one of Noble’s analysts or bankers, with questions taken from the audience during the presentation. Panel presentations are planned, featuring key opinion leaders in these sectors, providing valuable insights on emerging trends. Scheduled one-on-one meetings with public company executives, coordinated by Noble’s dedicated Investor Outreach team, are also available to qualified investors.

Why Your Company Should Present

Looking to increase awareness in your company and increase liquidity? Paid participation in Noble’s investor conferences, both virtual and in-person, provides that opportunity, with a tailored experience aimed at delivering substantial value. After 40 years of serving emerging growth companies, and the investors who follow them, Noble has built an investor base eager to discover where the next success story lies.

Noble’s investor base is relevant and, in many cases, new to your company. Noble’s dedicated Investor Outreach team provides unmatched exposure to investors that can invest in your company, including small money managers, family offices, RIAs, wealth managers, self-directed investors, and institutions. Most of Noble’s investors specifically seek undervalued, overlooked, emerging investment opportunities.

The cost to present includes your corporate presentation with a Q&A session proctored by one of Noble’s analysts or bankers, a webcast recording, scheduled 1×1 meetings with qualified investors, and marketing on Channelchek.

Benefits for Investors

Hear directly from the c-suite of the next innovators in consumer, communications, media, and technology and learn about new investment opportunities. The Q&A portion of each presentation gives you the opportunity to have your questions answered during or after the proctored session. The planned panel presentations are sure to provide expert insight on growing trends in the healthcare space. And, for qualified investors, one-on-one meetings are available with company executives; scheduled by Noble’s dedicated Investor Outreach team. All from the comfort of your own desk, and at no cost.

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Release – Xcel Brands To Host First Quarter 2024 Earnings Call On May 20

Posted on May 16, 2024May 16, 2024 by aweinsoff@channelchek.com

Research News and Market Data on XELB

May 16, 2024 at 8:01 AM EDT

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NEW YORK, May 16, 2024 (GLOBE NEWSWIRE) — Xcel Brands, Inc. (NASDAQ: XELB) (“Xcel” or the “Company”), today announced that it will report its first quarter 2024 financial results on May 20, 2024. The Company will hold a conference call with the investment community on May 20, 2024, at 5:00 p.m. ET.

A webcast of the conference call will be available live on the Investor Relations section of Xcel’s website at https://xcelbrands.co/pages/events-and-presentations or directly at https://edge.media-server.com/mmc/p/r52mtx59.

Interested parties unable to access the conference call via the webcast may dial 800-715-9871 or 646-307-1963 and use the Conference ID 3975904. A replay of the webcast will be available on Xcel’s website.

About Xcel Brands

Xcel Brands, Inc. (NASDAQ: XELB) is a media and consumer products company engaged in the design, marketing, live streaming, social commerce sales of branded apparel, footwear, accessories, fine jewelry, home goods and other consumer products, and the acquisition of dynamic consumer lifestyle brands. Xcel was founded in 2011 with a vision to reimagine shopping, entertainment, and social media as one thing. Xcel owns the Judith Ripka, Halston, LOGO by Lori Goldstein, and C. Wonder by Christian Siriano brands and a minority stake in the Isaac Mizrahi brand. It also owns and manages the Longaberger brand through its controlling interest in Longaberger Licensing LLC and a 50% interest in a JV in TWRHLL (“Tower Hill”) by Christie Brinkley. Also Xcel owns a 30% interest in Orme, a short-form video market place. Xcel is pioneering a true modern consumer products sales strategy which includes the promotion and sale of products under its brands through interactive television, digital live-stream shopping, social commerce, brick-and-mortar retail, and e-commerce channels to be everywhere its customer’s shop. The company’s brands have generated in excess of $4 billion in retail sales via livestreaming in interactive television and digital channels alone. Headquartered in New York City, Xcel Brands is led by an executive team with significant live streaming, production, merchandising, design, marketing, retailing, and licensing experience, and a proven track record of success in elevating branded consumer products companies. For more information, visit www.xcelbrands.com.

For further information please contact:
Seth Burroughs
Xcel Brands
sburroughs@xcelbrands.com

Source:

Discover Emerging Growth Consumer, Communications, Media, and Technology Companies at Noble Capital Markets’ June Virtual Equity Conference

Posted on April 8, 2024June 27, 2024 by cpatches

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Emerging Growth Public Consumer, Communications, Media, Technology (and more) Company Executive Presentations
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Release – Vera Bradley Announces Fourth Quarter and Fiscal Year 2024 Results

Posted on March 13, 2024March 13, 2024 by aweinsoff@channelchek.com

Research News and Market Data on VRA

Mar 13, 2024

Consolidated net revenues totaled $470.8 million for the fiscal year, compared to $500.0 million last year

Net income totaled $7.8 million, or $0.25 per diluted share, for the fiscal year, compared to a net loss of ($59.7) million, or ($1.90) per diluted share, last year

Non-GAAP net income totaled $17.2 million, or $0.55 per diluted share, for the fiscal year, compared to a net loss of ($3.2) million, or ($0.10) per diluted share, last year

Strong balance sheet, with cash and cash equivalents of $77.3 million, no debt, and year-over-year inventories down nearly 17%

Management provides guidance for fiscal year ending February 1, 2025

FORT WAYNE, Ind., March 13, 2024 (GLOBE NEWSWIRE) — Vera Bradley, Inc. (Nasdaq: VRA) (the “Company”) today announced its financial results for the fourth quarter and fiscal year ended February 3, 2024 (“Fiscal 2024”).

In this release, Vera Bradley, Inc. or “the Company” refers to the entire enterprise and includes both the Vera Bradley and Pura Vida brands. Vera Bradley on a stand-alone basis refers to the Vera Bradley brand.

Fourth Quarter and Fiscal Year-End Comments

Jackie Ardrey, Chief Executive Officer of the Company, stated, “We are pleased with the completion of the first full year of our turnaround story. We have successfully pivoted the organization toward a bright future and effectively managed both the existing business as well as the turnaround efforts, through Project Restoration, which will begin to bear fruit in the coming year. Our teams continued to carefully manage both gross margin and expenses in the fourth quarter, consistent with efforts earlier in the year.

“We have improved discipline around gross margin management and cost control, which will continue. In addition to this discipline, our strategic efforts are focused on stabilizing and growing our sales base. Our recent sales results demonstrate the need for change in our branding, product assortments, and store environments – the exact areas that Project Restoration addresses to position Vera Bradley, Inc. for long-term, profitable growth. After a year of foundational work, we are very excited about the customer-facing changes through Project Restoration that we will unveil this year.”

“For the fourth quarter, Vera Bradley brand revenues fell 6.1%, with soft sales in all Direct channels,” Ardrey continued. “Sales were also negatively impacted by store closures over the last twelve months. Customers responded to some of our latest product collaborations and to our newer product offerings like leather, but overall, they continued to be more discriminating with their discretionary spending in light of the macroeconomic environment. A bright spot was the November transformation of our online outlet from a flash-sale model to an everyday extension of our outlet stores. This brought new customers to the brand and helped offset weakness in the outlet store channel. On the Indirect side, our wholesale partners were cautious with inventory buys in the fourth quarter.

“Pura Vida year-over-year fourth quarter sales declined 21.6%, primarily due to decreases in ecommerce and wholesale revenues, as external marketing costs continued to rise and marketing effectiveness remained challenging. Our holiday gifts, like our annual Advent Box, and engraving categories performed best for the quarter. While we are actively addressing revenue stabilization and marketing effectiveness at Pura Vida, our key focus is managing the business for profitability. As a result, we drove meaningful year-over-year operating margin improvement for the fourth quarter and full year.”

Ardrey continued, “We continued to strengthen our already-strong balance sheet, adding to our year-over-year cash position while strategically reducing our inventory levels. This strength is critical as we navigate an uncertain retail climate while supporting Project Restoration initiatives.”

“We ended the fiscal year with consolidated revenues of nearly $471 million,” Ardrey added. “We generated GAAP net income of $7.8 million, or $0.25 per diluted share, a return to profitability from a sizable loss last year. Excluding charges on a non-GAAP basis, net income for the fiscal year totaled $17.2 million, or $0.55 per diluted share. This improved profitability was primarily driven by gross margin performance and disciplined expense control.”

Update on Project Restoration and Looking Ahead

Ardrey noted, “A little over a year ago, we began a comprehensive review of the consumer, brand, product, and channel components for both of our brands. This work culminated in our long-term strategic plan, Project Restoration, which addresses each of these four pillars. Through Project Restoration, we are taking targeted and prudent actions to stabilize revenues, while remaining focused on strong financial discipline. We believe execution of Project Restoration will drive long-term profitable growth and deliver value to our shareholders.

“Over the last twelve months, we have made significant progress on this Company-wide, comprehensive initiative, focusing on the four key pillars of the business for each brand.

“At Vera Bradley, Project “New Day” launches in mid-July, and is the first manifestation of our Project Restoration work and a full pivot from where we are today. It includes, among other things, the reveal of our new and elevated full-line branding and marketing, product, store design, and website. Our work on this initiative was informed by consumer research and current perceptions of the brand from both buyers and non-buyers. We believe we have the ability to attract new customers while keeping our current fans through product innovations and new marketing campaigns designed to inspire joy and connection. Our new assortment has broad appeal and uses new, higher quality, and softer fabrics and styles designed to not only look great, but feel great.

“I’d like to give you some more details on the progress within each pillar:

Consumer: We are focusing on restoring brand relevancy, targeting casual and feminine 35 to 54 year old women who value both fashion and function. Our focus on the 35 to 54 year old led us in search of data to understand where and how she shops. We are using this data to target new customers and embark on new partnerships, licensing deals, and collaborations to extend our reach.
Brand: We are strategically marketing our distinctive and unique position as a feminine, fashionable brand that connects with consumers on a deep, emotional level. Vera Bradley is a strong brand, with tremendous brand recognition, and we are going to make it even stronger by telling a new story about it. We are refocusing our marketing and elevating our creative efforts through digital marketing, public relations, and store initiatives to drive interest and gain new customers.
Product: We are refocusing on core categories and items we are “best at,” such as travel and bags, by innovating and expanding within our core products. We are elevating our colorful feminine heritage, keeping it distinctive but more trend-right and modern through updated prints, colors, styles, and designs. We’ve improved the quality of most of our fabrics while keeping our commitment to increased use of preferred fibers, and our retail price structure is unchanged. Although the assortment will look new, it is unmistakably Vera Bradley, and our existing customers will still recognize their favorite styles and our distinctive colors, patterns, and quilting.
Channel: We are building a balanced footprint that more clearly differentiates our full-line and outlet assortments and experience. We plan to open two full-line stores and one factory store this year, relocate existing stores where needed, and update our full-line stores with new branding and an improved shopping experience. We are also exploring new full-line formats with a focus on lifestyle centers. Finally, maintaining brand-right wholesale relationships is important, and we are actively working with new specialty retailers where we know our customer is shopping. We will also accelerate our digital-first focus and online reach. We are improving our online shopping experience and elevating creative and experiences, while offering our outlet assortment online on verabradleyoutlet.com for the first time ever.

“At Pura Vida, we are shifting our focus to delivering profitability and balancing the ecommerce business with wholesale and retail stores. Pura Vida’s revenues have declined the last two quarters largely as a result of increased digital media costs that led to lower new customer acquisition. We’ve diversified our marketing spend and are making additional efforts to retain customers while continuing to work on each pillar of Project Restoration.

Consumer: We are sharpening our focus on the 18 to 24 year old collegiate girl. We will shift our marketing strategy to increase appeal to Gen Z, based on our most recent research.
Brand: We are recentering our brand ethos on “living life to the fullest,” sharing real moments, places, and faces in our marketing campaigns, and sharpening our focus on Gen Z. We are also investing in new tools to improve site experience and conversion.
Product: We are focusing on delivering unique, fun, playful designs that are affordable and accessible with a dominant emphasis on bracelets and jewelry, as well as other strategic, adjacent categories. We will continue to innovate around string bracelets, jewelry, and accessories.
Channel: We continue to have a strong focus on restoring profitable e-commerce growth, with a greater focus on repeat purchases, as well as strategic growth of wholesale. Additionally, our success in retail stores has driven us to find new store locations for this year and beyond. We expect to open at least two additional stores this year.”

Summary of Financial Performance for the Fourth Quarter

Consolidated net revenues totaled $133.3 million for the current year fourth quarter compared to $147.1 million in the prior year fourth quarter.

For the current year fourth quarter, Vera Bradley, Inc.’s consolidated net loss totaled ($1.9) million, or ($0.06) per diluted share. These results included $5.4 million of net after tax charges, comprised of $4.2 million of intangible asset impairment charges, $0.6 million for the amortization of definite-lived intangible assets, $0.4 million of severance charges, and $0.2 million of professional and consulting fees associated with strategic initiatives. On a non-GAAP basis, Vera Bradley, Inc.’s consolidated fourth quarter net income totaled $3.5 million, or $0.11 per diluted share.

For the prior year fourth quarter, Vera Bradley, Inc.’s consolidated net loss totaled ($28.2) million, or ($0.91) per diluted share. These results included $27.2 million of net after tax charges, comprised of $22.6 million of goodwill and intangible asset impairment charges; $2.4 million of severance, retention, and stock-based retirement compensation charges; $0.8 million related to new CEO sign-on bonus and relocation expenses; $0.5 million for the amortization of definite-lived intangible assets; $0.6 million of purchase order cancellation fees; and $0.3 million of consulting and professional fees primarily associated with strategic initiatives. On a non-GAAP basis, Vera Bradley, Inc.’s prior year consolidated fourth quarter net loss totaled ($1.0) million, or ($0.03) per diluted share.

Summary of Financial Performance for the Fiscal Year

Consolidated net revenues totaled $470.8 million for Fiscal 2024 compared to $500.0 million for Fiscal 2023.

For the current fiscal year, Vera Bradley, Inc.’s consolidated net income totaled $7.8 million, or $0.25 per diluted share. These results included $9.4 million of net after tax charges, comprised of $4.2 million of intangible asset impairment charges, $2.3 million for the amortization of definite-lived intangible assets, $2.2 million of severance charges, and $0.7 million of consulting and professional fees primarily associated with strategic initiatives. On a non-GAAP basis, Vera Bradley, Inc.’s consolidated net income for the fiscal year totaled $17.2 million, or $0.55 per diluted share.

For the prior fiscal year, Vera Bradley, Inc.’s consolidated net loss totaled ($59.7) million, or ($1.90) per diluted share. These results included $56.5 million of net after tax charges, comprised of $40.7 million of goodwill and intangible asset impairment charges; $7.4 million of severance, retention, and stock-based retirement compensation charges; $3.3 million of consulting and professional fees primarily associated with cost savings initiatives, the CEO search, and strategic initiatives; $1.9 million for the amortization of definite-lived intangible assets; $1.2 million of purchase order cancellation fees; $1.1 million of store and right-of-use asset impairment charges; $0.8 million related to the new CEO sign-on bonus and relocation expenses; and $0.1 million of goodMRKT exit costs. On a non-GAAP basis, Vera Bradley, Inc.’s consolidated prior year net loss totaled ($3.2) million, or ($0.10) per diluted share.

Fourth Quarter Details

Current year fourth quarter Vera Bradley Direct segment revenues totaled $93.0 million, a 6.6% decrease from $99.5 million in the prior year fourth quarter. Comparable sales decreased 10.0% from the prior year. The Company also permanently closed eight full-line stores and one outlet store and opened three outlet stores in the last twelve months.

Vera Bradley Indirect segment revenues totaled $16.1 million, a 3.7% decrease over $16.7 million in the prior year fourth quarter. The decrease was primarily related to lower sales to certain specialty partners and key accounts.

Pura Vida segment revenues totaled $24.2 million, a 21.6% decrease from $30.9 million in the prior year fourth quarter, primarily due to declines in ecommerce and wholesale sales.

Fourth quarter consolidated gross profit totaled $69.6 million, or 52.3% of net revenues, compared to $60.0 million, or 40.8% of net revenues, in the prior year fourth quarter. On a non-GAAP basis, prior year consolidated gross profit totaled $60.7 million, or 41.3% of net revenues. The current year gross profit rate compared to the prior year non-GAAP rate was favorably impacted by lower year-over-year inventory reserve charges, lower inbound and outbound freight expense, lower supply chain costs, and the sell-through of previously-reserved inventory, partially offset by increased promotional activity. Prior year gross profit was materially impacted by inventory reserve charges and high inbound and outbound freight expense, as well as overhead costs.

Consolidated SG&A expense for the fourth quarter totaled $67.2 million, or 50.4% of net revenues, compared to $70.0 million, or 47.6% of net revenues, in the prior year fourth quarter. On a non-GAAP basis, consolidated SG&A expense totaled $65.7 million, or 49.3% of net revenues, compared to $64.4 million, or 43.8% of net revenues, in the prior year fourth quarter. Vera Bradley’s current year non-GAAP SG&A expenses were higher than the prior year primarily due to incremental marketing expenses in the quarter, partially offset by savings from Company-wide cost reduction initiatives across various areas of the enterprise.

The Company’s fourth quarter consolidated operating loss totaled ($2.8) million, or (2.1%) of net revenues, compared to an operating loss of ($49.8) million, or (33.8%) of net revenues, in the prior year fourth quarter. On a non-GAAP basis, fourth quarter consolidated operating income totaled $4.1 million, or 3.1% of net revenues, compared to a consolidated net operating loss of ($3.5) million, or (2.4%) of net revenues, in the prior year.

By segment:

Vera Bradley Direct fourth quarter operating income was $18.2 million, or 19.6% of Direct net revenues, compared to $18.5 million, or 18.6% of Direct net revenues, in the prior year. On a non-GAAP basis, current year Direct fourth quarter operating income was $18.4 million, or 19.8% of Direct net revenues, compared to $19.0 million, or 19.1% of Direct net revenues, in the prior year.
Vera Bradley Indirect fourth quarter operating income was $4.4 million, or 27.4% of Indirect net revenues, compared to $4.6 million, or 27.3% of Indirect net revenues, in the prior year. On a non-GAAP basis, current year Indirect fourth quarter operating income was $4.7 million, or 29.3% of Indirect sales, compared to $4.7 million, or 28.3% of Indirect net revenues, in the prior year.
Pura Vida’s current year fourth quarter operating loss was ($7.3) million, or (30.2%) of Pura Vida net revenues, compared to an operating loss of ($49.8) million, or (161.2%) of Pura Vida net revenues, in the prior year. On a non-GAAP basis, Pura Vida’s current year fourth quarter operating loss was ($1.0) million, or (4.1%) of Pura Vida net revenues, compared to ($8.8) million, or (28.4%) of Pura Vida net revenues, in the prior year.

Details for the Fiscal Year

Vera Bradley Direct segment revenues for the current fiscal year totaled $309.9 million, a 5.6% decrease from $328.2 million in the prior year. Comparable sales declined 7.1% for the fiscal year, and the Company permanently closed eight full-line stores and one outlet store while opening three outlet stores in the last twelve months.

Vera Bradley Indirect segment revenues for the fiscal year totaled $73.8 million, a 0.7% increase over $73.3 million in the prior year, primarily reflecting an increase in certain key account orders, partially offset by a decline in certain specialty partner revenues.

Current year Pura Vida segment revenues totaled $87.1 million, an 11.5% decrease from $98.4 million in the prior year, reflecting declines in ecommerce and wholesale sales, partially offset by growth in retail store sales.

Consolidated gross profit for the current fiscal year totaled $256.4 million, or 54.5% of net revenues, compared to $238.9 million, or 47.8% of net revenues, last year. On a non-GAAP basis, prior year gross profit totaled $240.5 million, or 48.1% of net revenues. The current year gross profit rate compared to the prior year non-GAAP rate was favorably impacted by lower year-over-year inventory reserve charges, lower year-over-year inbound and outbound freight expense, lower supply chain costs, and the sell-through of previously-reserved inventory, partially offset by an increase in promotional activity.

For the fiscal year, consolidated SG&A expense totaled $241.5 million, or 51.3% of net revenues, compared to $265.0 million, or 53.0% of net revenues, in the prior year. On a non-GAAP basis, SG&A expense totaled $234.7 million, or 49.9% of net revenues, in the current year, compared to $245.3 million, or 49.1% of net revenues, in the prior year. The decline in the current year non-GAAP SG&A expenses from the prior year was driven by Company-wide cost reduction initiatives across the enterprise.

For the fiscal year, the Company’s consolidated operating income totaled $10.4 million, or 2.2% of net revenues, compared to an operating loss of ($94.9) million, or (19.0%) of net revenues, in the prior year. On a non-GAAP basis, the Company’s consolidated operating income was $22.6 million, or 4.8% of net revenues, compared to a consolidated operating loss of ($4.4) million, or (0.9%) of net revenues, in the prior year.

By segment:

Vera Bradley Direct operating income was $61.9 million, or 20.0% of Direct net revenues, compared to $51.1 million, or 15.6% of Direct net revenues, in the prior year. On a non-GAAP basis, current year Direct operating income was $62.4 million, or 20.2% of Direct net revenues, compared to $53.2 million, or 16.2% of Direct net revenues, in the prior year.
Vera Bradley Indirect operating income was $24.3 million, or 32.9% of Indirect net revenues, compared to $23.0 million, or 31.3% of Indirect net revenues, in the prior year. On a non-GAAP basis, current year Indirect operating income totaled $24.6 million, or 33.3% of Indirect net revenues, compared to $23.3 million, or 31.7%, in the prior year.
Pura Vida’s operating loss was ($2.3) million, or (2.7%) of Pura Vida net revenues, compared to an operating loss of ($78.6) million, or (79.9%) of Pura Vida net revenues, in the prior year. On a non-GAAP basis, Pura Vida’s current year operating income was $6.3 million, or 7.2% of Pura Vida net revenues, compared to an operating loss of ($5.4) million, or (5.5%) of Pura Vida net revenues, in the prior year.

Balance Sheet

Net capital spending for the fiscal year totaled $3.8 million compared to $8.2 million in the prior year.

Cash and cash equivalents as of February 3, 2024 totaled $77.3 million compared to $46.6 million at the prior fiscal year end. The Company had no borrowings on its $75 million ABL credit facility at fiscal year end.

Total fiscal year-end inventory was $118.3 million, compared to $142.3 million at last fiscal year end. Total current year inventory was lower than the prior year primarily due to reduced year-over-year inventory purchases and reduced inbound shipping cost and overhead expenses.

During the fourth quarter, the Company repurchased approximately $0.3 million of its common stock (approximately 39,000 shares at an average price of $7.39), bringing the Company’s Fiscal 2024 purchases to $2.2 million (approximately 0.4 million shares at an average price of $6.10). There is $25.5 remaining under the Company’s $50.0 million share repurchase authorization, which expires in December 2024. Since Fiscal 2015, the Company has repurchased $135.1 million, or approximately 12.4 million shares, of its common stock.

Forward Outlook

Management is providing estimates for the fiscal year ending February 1, 2025 (“Fiscal 2025”) based on current macroeconomic trends and expectations and implementation of components of Project Restoration. Ardrey noted, “We anticipate the Fiscal 2025 macroeconomic environment to continue to be unpredictable and that this year will continue to be a rebuilding year for the Company, as we start to unveil the results of Project Restoration mid-year. We expect to continue to take advantage of gross margin improvement opportunities and will manage our expense structure diligently.”

Excluding net revenues, all guidance-related numbers referenced below are non-GAAP. The prior year income statement numbers used in the forward-looking discussion below are also non-GAAP because they exclude the previously disclosed charges for intangible asset impairment charges, amortization of definite-lived intangible assets, severance charges, and professional and consulting fees primarily associated with strategic initiatives. Current year guidance also excludes any similar charges.

For Fiscal 2025, the Company’s expectations are as follows:

Consolidated net revenues of $460 to $480 million. Net revenues totaled $470.8 million in Fiscal 2024. We expect Vera Bradley brand sales to grow by low-single digits for the year, with accelerating sales in the second half as we launch our new products, branding, and marketing. We anticipate Pura Vida brand sales will decline in the mid-teen range as we continue to manage the business for profitability by addressing marketing efficiencies impacting ecommerce sales, partially offset by increased retail sales.
A consolidated gross profit percentage of 54.0% to 55.0% compared to 54.5% in Fiscal 2024. The fiscal 2025 gross profit rate is expected to be relatively flat to last year due to product margin improvements and lower supply chain costs, offset by increased shipping costs.
Consolidated SG&A expense of $229 to $239 million compared to $234.7 million in Fiscal 2024. Year-over-year SG&A expenses are expected to be relatively flat to last year, driven by incremental marketing investment intended to drive sales and accelerate customer file growth, offset by Company-wide expense reductions and lower Pura Vida expenses.
Consolidated operating income of $21.0 to $24.5 million compared to $22.6 million in Fiscal 2024.
Free cash flow of approximately $10 million compared to $44.2 million in Fiscal 2024.
Consolidated diluted EPS of $0.54 to $0.62 based on diluted weighted-average shares outstanding of 30.1 million and an effective tax rate of approximately 28%. Diluted EPS totaled $0.55 last year.
Net capital spending of approximately $12 to $14 million compared to $3.8 million in the prior year, reflecting investments associated with new and remodeled stores as well as technology and logistics enhancements.

53rd Week

The current year fourth quarter consisted of 14 weeks compared to 13 weeks in the prior year fourth quarter ended January 28, 2023. Fiscal 2024 consisted of 53 weeks compared to 52 weeks in the prior fiscal year ended January 28, 2023 (“Fiscal 2023”). Comparable sales were calculated based on 13 weeks in each fourth quarter and 52 weeks in each fiscal year. Management estimates that the additional week contributed approximately $6 million in net revenues and increased diluted earnings per share by approximately $0.01 for both the current year fourth quarter and Fiscal 2024.

Non-GAAP Numbers

The current year non-GAAP fourth quarter and fiscal year income statement numbers referenced in this release exclude the previously outlined intangible asset impairment charges, amortization of definite-lived intangible assets, severance charges, and professional and consulting fees primarily associated with strategic initiatives. The prior year non-GAAP fourth quarter income statement numbers referenced in this release exclude the previously outlined charges for goodwill and intangible asset impairment; severance, retention, and stock-based retirement compensation; new CEO sign-on bonus and relocation; amortization of definite-lived intangible assets; purchase order cancellation fees; and consulting and professional fees primarily associated with strategic initiatives. The prior year non-GAAP fiscal year income statement numbers also exclude the previously outlined charges for cost savings initiatives and the CEO search, store and right-of-use asset impairment charges, and goodMRKT exit costs.

Disclosure Regarding Non-GAAP Measures

The Company’s management does not, nor does it suggest that investors should, consider the supplemental non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Further, the non-GAAP measures utilized by the Company may be unique to the Company, as they may be different from non-GAAP measures used by other companies.

The Company believes that the non-GAAP measures presented in this earnings release, including free cash flow (cash usage); gross profit; selling, general, and administrative expenses; operating income (loss); net income (loss); net income (loss) attributable and available to Vera Bradley, Inc.; and diluted net income (loss) per share available to Vera Bradley, Inc. common shareholders, along with the associated percentages of net revenues, are helpful to investors because they allow for a more direct comparison of the Company’s year-over-year performance and are consistent with management’s evaluation of business performance. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures can be found in the Company’s supplemental schedules included in this earnings release.

Consistent with SEC regulations, the Company has not provided a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures in reliance on the “unreasonable efforts” exception set forth in the applicable regulations, because there is substantial uncertainty associated with predicting any future adjustments the Company may make to its GAAP financial measures in calculating non-GAAP financial measures.

Adjustments to Prior Year Non-GAAP Numbers

The Company continuously evaluates the non-GAAP financial measures it uses, the manner in which non-GAAP financial measures are calculated, and the adjustments it makes to GAAP results to derive non-GAAP financial measures. In the fourth quarter of Fiscal 2024, the Company has now excluded inventory reserve adjustments from non-GAAP financial measures and revised prior period non-GAAP financial measures to conform the calculation of non-GAAP financial measures across all periods and provide comparability. As a result, prior year fourth quarter and fiscal year gross margin, operating income, and net income numbers have been adjusted from those previously reported.

Call Information

A conference call to discuss results for the fourth quarter and fiscal year is scheduled for today, Wednesday, March 13, 2024, at 9:30 a.m. Eastern Time. A broadcast of the call will be available via Vera Bradley’s Investor Relations section of its website, www.verabradley.com. Alternatively, interested parties may dial into the call at (877) 407-0779, and enter the access code 13742953. A replay will be available shortly after the conclusion of the call and remain available through March 27, 2024. To access the recording, listeners should dial (844) 512-2921, and enter the access code 13742953.

About Vera Bradley, Inc.

Vera Bradley, Inc. operates two unique lifestyle brands – Vera Bradley and Pura Vida. Vera Bradley and Pura Vida are complementary businesses, both with devoted, emotionally-connected, and multi-generational female customer bases; alignment as casual, comfortable, affordable, and fun brands; positioning as “gifting” and socially-connected brands; strong, entrepreneurial cultures; a keen focus on community, charity, and social consciousness; multi-channel distribution strategies; and talented leadership teams aligned and committed to the long-term success of their brands.

Vera Bradley, based in Fort Wayne, Indiana, is a leading designer of women’s handbags, luggage and other travel items, fashion and home accessories, and unique gifts. Founded in 1982 by friends Barbara Bradley Baekgaard and Patricia R. Miller, the brand is known for its innovative designs, iconic patterns, and brilliant colors that inspire and connect women unlike any other brand in the global marketplace.

In July 2019, Vera Bradley, Inc. acquired a 75% interest in Creative Genius, Inc., which also operates under the name Pura Vida Bracelets (“Pura Vida”). Pura Vida, based in La Jolla, California, is a digitally native, highly-engaging lifestyle brand founded in 2010 by friends Paul Goodman and Griffin Thall. Pura Vida has a differentiated and expanding offering of bracelets, jewelry, and other lifestyle accessories. The Company acquired the remaining 25% of Pura Vida in January 2023.

The Company has three reportable segments: Vera Bradley Direct (“VB Direct”), Vera Bradley Indirect (“VB Indirect”), and Pura Vida. The VB Direct business consists of sales of Vera Bradley products through Vera Bradley Full-Line and Factory Outlet stores in the United States, www.verabradley.com, Vera Bradley’s online outlet site, and the Vera Bradley annual outlet sale in Fort Wayne, Indiana. The VB Indirect business consists of sales of Vera Bradley products to approximately 1,600 specialty retail locations throughout the United States, as well as select department stores, national accounts, third party e-commerce sites, and third-party inventory liquidators, and royalties recognized through licensing agreements related to the Vera Bradley brand. The Pura Vida segment consists of sales of Pura Vida products through the Pura Vida websites, www.puravidabracelets.com, www.puravidabracelets.ca, and www.puravidabracelets.eu; through the distribution of its products to wholesale retailers and department stores; and through its Pura Vida retail stores.

Website Information

We routinely post important information for investors on our website www.verabradley.com in the “Investor Relations” section. We intend to use this webpage as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investor Relations section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our webpage is not incorporated by reference into, and is not a part of, this document.

Investors and other interested parties may also access the Company’s most recent Corporate Responsibility and Sustainability Report outlining its ESG (Environmental, Social, and Governance) initiatives at https://verabradley.com/pages/corporate-responsibility.

Vera Bradley Safe Harbor Statement
Certain statements in this release are “forward-looking statements” made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the Company’s current expectations or beliefs concerning future events and are subject to various risks and uncertainties that may cause actual results to differ materially from those that we expected, including: possible adverse changes in general economic conditions and their impact on consumer confidence and spending; possible inability to predict and respond in a timely manner to changes in consumer demand; possible loss of key management or design associates or inability to attract and retain the talent required for our business; possible inability to maintain and enhance our brands; possible inability to successfully implement the Company’s long-term strategic plan; possible inability to successfully open new stores, close targeted stores, and/or operate current stores as planned; incremental tariffs or adverse changes in the cost of raw materials and labor used to manufacture our products; possible adverse effects resulting from a significant disruption in our distribution facilities; or business disruption caused by pandemics or other macro factors. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended January 28, 2023. We undertake no obligation to publicly update or revise any forward-looking statement. Financial schedules are attached to this release.

CONTACTS:
Investors:
Julia Bentley
jbentley@verabradley.com

Media:
mediacontact@verabradley.com
877-708-VERA (8372)

View full release here.

Release – ACCO Brands Corporation Announces Fourth Quarter and Full Year 2023 Earnings Webcast

Posted on February 13, 2024February 13, 2024 by aweinsoff@channelchek.com

Research News and Market Data on ACCO

02/13/2024

LAKE ZURICH, Ill.–(BUSINESS WIRE)– ACCO Brands Corporation (NYSE: ACCO) today announced that it will release its fourth quarter and full year 2023 earnings after the market close on February 22, 2024. The Company will host a conference call and webcast to discuss the results on February 23 at 8:30 a.m. EST. The webcast can be accessed through the Investor Relations section of www.accobrands.com and will be available for replay.

About ACCO Brands Corporation

ACCO Brands, the Home of Great Brands Built by Great People, designs, manufactures and markets consumer and end-user products that help people work, learn, play and thrive. Our widely recognized brands include AT-A-GLANCE®, Five Star®, Kensington®, Leitz®, Mead®, PowerA®, Swingline®, Tilibra® and many others. More information about ACCO Brands Corporation (NYSE: ACCO) can be found at www.accobrands.com.

Christopher McGinnis
Investor Relations
(847) 796-4320

Kori Reed
Media Relations
(224) 501-0406

Source: ACCO Brands Corporation

Release – Vera Bradley, Inc. Announces Reporting Date For Fourth Quarter And Fiscal Year 2024 Results

Posted on February 8, 2024February 8, 2024 by aweinsoff@channelchek.com

Research News and Market Data on VRA

Feb 8, 2024

FORT WAYNE, Ind., Feb. 08, 2024 (GLOBE NEWSWIRE) — Vera Bradley, Inc. (Nasdaq: VRA) (the “Company”) today announced that it plans to report results for the fourth quarter and fiscal year ended February 3, 2024 at 8:00 a.m. Eastern Time on Wednesday, March 13, 2024.

The Company will host a conference call to discuss its financial results at 9:30 a.m. Eastern Time that same day. A live webcast of the conference call will be available on the Investor Relations section of the Company’s website, www.verabradley.com. Alternatively, interested parties may dial into the call at (877) 407-0779, and enter the access code 13742953. A replay will be available shortly after the conclusion of the call and remain available through March 27, 2024. To access the recording, listeners should dial (844) 512-2921, and enter the access code 13742953.

ABOUT VERA BRADLEY, INC.

Vera Bradley, Inc. operates two unique lifestyle brands – Vera Bradley and Pura Vida. Vera Bradley and Pura Vida are complementary businesses, both with devoted, emotionally connected, and multi-generational female customer bases; alignment as causal, comfortable, affordable, and fun brands; positioning as “gifting” and socially-connected brands; strong, entrepreneurial cultures; a keen focus on community, charity, and social consciousness; multi-channel distribution strategies; and talented leadership teams aligned and committed to the long-term success of their brands.

In July 2019, Vera Bradley, Inc. acquired a 75% interest in Creative Genius, Inc., which also operates under the name Pura Vida Bracelets (“Pura Vida”). Pura Vida, based in La Jolla, California, is a digitally native, highly engaging lifestyle brand founded in 2010 by friends Paul Goodman and Griffin Thall. Pura Vida has a differentiated and expanding offering of bracelets, jewelry, and other lifestyle accessories. The Company acquired the remaining 25% of Pura Vida in January 2023.

CONTACTS:
Investors:
Julia Bentley
jbentley@verabradley.com

Media:
877-708-VERA (8372)
Mediacontact@verabradley.com