Pain at the pump has made an unwelcome return, with gas prices rapidly rising across the United States. The national average recently climbed to $3.88 per gallon, while some states now face prices approaching or exceeding $6 per gallon.
In California, gas prices have spiked to $5.79 on average, up 31 cents in just the past week. It’s even worse in metro Los Angeles where prices hit $6.07, a 49 cent weekly jump. Besides California, drivers in 11 states now face average gas prices of $4 or more.
This resurgence complicates the Federal Reserve’s fight against high inflation. Oil prices are the key driver of retail gas costs. With oil climbing back to $90 per barrel, pushed up by supply cuts abroad, gas prices have followed.
West Texas Intermediate crude rose to $93.74 on Tuesday, its highest level in 10 months, before retreating below $91 on Wednesday. The international benchmark Brent crude hit highs above $96 per barrel. Goldman Sachs warned Brent could reach $107 if OPEC+ nations don’t unwind production cuts.
For consumers, higher gas prices add costs and sap purchasing power, especially for lower-income families. Drivers once again face pain filling up their tanks. Households paid an average of $445 a month on gas during the June peak when prices topped $5 a gallon. That figure dropped to $400 in September but is rising again.
Politically, high gas also causes headaches for the Biden administration. Midterm voters tend to blame whoever occupies the White House for pain at the pump, whether justified or not. President Biden has few tools to immediately lower prices set by global markets.
However, economists say oil and gas prices must rise significantly further to seriously jeopardize the U.S. economy. Past recessions only followed massive oil price spikes of at least 100% within a year. Oil would need to double from current levels, to around $140 per barrel, to inevitably tip the economy into recession, according to analysis.
Nonetheless, the energy resurgence does present challenges for the Fed’s inflation fight. While core inflation has cooled lately, headline inflation has rebounded in part due to pricier gas. Consumer prices rose 0.1% in August, defying expectations of a drop, largely because of rising shelter and energy costs.
This complicates the Fed’s mission to cool inflation through interest rate hikes. Some economists believe the energy volatility will lead the Fed to pencil in an additional quarter-point rate hike this year to around 4.5%. However, a dramatic policy response is unlikely with oil still below $100 per barrel.
In fact, some argue the energy spike may even inadvertently help the Fed. By sapping consumer spending power, high gas prices could dampen demand and ease price pressures. If energy costs siphon purchases away from discretionary goods and services, it may allow inflation to fall without more aggressive Fed action.
Morgan Stanley analysis found past energy price shocks had a “small” impact on core inflation but took a “sizable bite out of” consumer spending. While bad for growth, this demand destruction could give the Fed space to cool inflation without triggering serious economic damage.
For now, energy volatility muddies the inflation outlook and complicates the Fed’s delicate task of engineering a soft landing. Gas prices swinging upward once again present both economic and political challenges. But unless oil spikes drastically higher, the energy complex likely won’t force the Fed’s hand. The central bank will keep rates elevated as long as underlying inflation remains stubbornly high.
Public Storage recently placed a major $2.2 billion bet on acquisitions to fuel its growth. The self-storage titan just closed on its purchase of rival Simply Self Storage for $2.2 billion, expanding its footprint while the market gets more crowded.
The deal underscores how mergers and buyouts offer an avenue for rapid growth in competitive industries. With over 127 properties across 18 states, the Simply Self Storage acquisition significantly boosted Public Storage’s presence, especially in high-demand Sunbelt markets.
These new assets align with Public Storage’s strategy of focusing on regions with above-average population expansion. The company can leverage its operational expertise and industry-leading brand to optimize performance across the acquired locations.
Importantly, the $2.2 billion purchase grows Public Storage’s portfolio by a whopping 33% since 2019, equivalent to over 54 million square feet added through acquisitions and developments. This exemplifies how buyouts can catalyze step-function growth.
With its formidable size and balance sheet, Public Storage boasts the financial flexibility to pursue transformative deals in the fragmented self-storage industry. The Simply Self Storage acquisition was financed through $2.2 billion in new debt issuance.
The company is also integrating 25 additional properties into its third-party management platform, expanding its revenue streams. Overall, the mega $2.2 billion deal reshapes Public Storage’s footprint and offerings to align with market growth opportunities.
However, the self-storage landscape is getting more crowded, heightening the need for competitive differentiation. Public Storage’s larger rival, Extra Space Storage, recently closed an even bigger $1.6 billion acquisition of Life Storage to become the sector’s largest operator.
Businesses across real estate and other industries often turn to mergers and acquisitions when organic growth slows. Buyouts can rapidly scale up platforms, capabilities and talent. Public Storage’s appetite for $2.2 billion in acquisitions highlights their role in growth strategies when conditions get tougher.
Yet deals come with integration risks and may face pricing pressure in downturns. As interest rates rise, Public Storage faces macroeconomic headwinds that could offset its bigger footprint. Its performance integrating Simply Self Storage properties will be pivotal.
With self-storage development accelerating, Public Storage’s recent mega-buyout represents a bold bet on external growth to stay ahead. Its ability to successfully absorb these new $2.2 billion in assets and thrive in a more crowded competitive landscape will determine if this big-money M&A pays off.
GXO Logistics’ $181 million acquisition of ecommerce fulfillment provider PFSweb signals the immense growth runway ahead for logistics providers as online retail continues rapid expansion.
The deal provides GXO greater exposure to high-growth ecommerce categories like health, beauty, luxury goods, apparel and more where PFSweb has cultivated specialized omnichannel capabilities. GXO also gains PFSweb’s proprietary order management systems, fraud protection, customer care services and distribution technologies that will strengthen its end-to-end fulfillment offerings.
PFSweb serves over 100 prominent consumer brands, including L’Oreal, Pandora, Kendra Scott and others through its facilities across North America, the UK and Belgium. This expands GXO’s relationships in categories experiencing online growth thanks to shifting consumer preferences.
The transformational rise of ecommerce is reshaping logistics networks and fueling acquisitions across fulfillment, last-mile delivery and automation. According to Statista, global ecommerce sales are projected to reach $5.4 trillion in 2023, highlighting the seismic shift to online shopping.
As volumes accelerate, logistics providers aim to capture demand through robust delivery solutions tailor-made for ecommerce. Fulfillment and last-mile acquisitions have increased as giants like GXO, XPO Logistics, UPS and FedEx move to capitalize on the boom in digital orders.
GXO is making sizable investments in automation, AI and optimizing warehouse flows to cement itself as the leader in orchestrating complex ecommerce fulfillment. The PFSweb deal aligns with its focus on allocating capital to high-growth, high-return logistics verticals.
For GXO, the acquisition deepens its competitive moat and brand relationships in strategically important retail categories. PFSweb’s expertise in direct-to-consumer support across the customer journey helps expand GXO’s proposition.
The blockbuster deal also gives GXO access to PFSweb’s 21-year track record successfully servicing and retaining top tier brands. PFSweb has developed a strong reputation for customized branded experiences and excellence in omnichannel execution.
GXO’s chief executive Malcolm Wilson emphasized how PFSweb complements GXO with brand relationships in rapidly expanding ecommerce verticals. The combination cross-sells more comprehensive logistics solutions to each company’s customer base.
For investors, GXO’s move spotlights the immense potential for logistics providers to capitalize on the secular shift online. Ecommerce has fundamentally transformed fulfillment, shipping and reverse logistics processes, with orders that are more variable, faster and customized compared to store replenishment.
Logistics companies essential to ecommerce are primed for significant growth as this trend accelerates. GXO, XPO, UPS, FedEx and other leaders stand to benefit from the structural shift given their networks, expertise and new technology investments.
Already PFSweb’s stock price has jumped nearly 50% following the acquisition news, underscoring Wall Street’s positive perspective. With ecommerce projected to continue double-digit expansion, the logistics sector remains firmly positioned to thrive into the future.
Gaming company Snail, Inc. is shaking up single-player games with the launch of Survivor Mercs, featuring groundbreaking Twitch integration that allows streamers to actively engage viewers.
Survivor Mercs is a roguelite military action game for PC. But what makes it truly unique is the ability for streamers to let their audience influence gameplay through real-time voting on upgrades, mercenaries and enemies.
This pioneering social element empowers streamers to meaningfully interact with fans during solo play for the first time. It expands engagement beyond passive viewing, creating a more immersive community experience.
As streaming continues growing, innovative integrations like Snail’s can profoundly impact both streamers and game developers. The company is leading the way in exploring how to make single-player gaming more social and fun to watch.
For streamers, it unlocks new ways to creatively involve their community. For developers, it opens up opportunities to design streamer-friendly games tailored for live audiences.
Snail’s CEO called the integration a “small step” toward reimagining audience participation in live gaming. But it could be a giant leap for revolutionizing solo play for the streaming era.
Beyond the groundbreaking Twitch element, Survivor Mercs promises challenging roguelite action with thousands of character combinations and procedurally generated maps.
Snail is pioneering the future of streaming-based gameplay. The company’s innovative integration of Twitch with solo play in Survivor Mercs kicks open the door to deeper social interaction and engagement between streamers and their loyal fans.
Consumer foods giant J.M. Smucker has agreed to purchase bakery company Hostess Brands for $5.6 billion in a major food industry acquisition. The deal will expand Smucker’s snacks and sweets portfolio with the addition of iconic Hostess brands such as Twinkies, Ding Dongs, and Donettes.
Under the terms of the acquisition, Smucker will pay $34.25 per share for Hostess in a cash and stock deal. This represents a premium of about 20% over Hostess’ closing share price on Friday. Smucker will also take on approximately $900 million of Hostess’ debt.
For Smucker, the deal provides an avenue for growth as demand for its key categories like jam and peanut butter has slowed. Twinkies and other Hostess snacks can tap into rising consumer appetites for nostalgic comfort foods. The acquisition also boosts Smucker’s presence in the in-store bakery section and convenience stores.
Meanwhile, Hostess Brands has faced slipping sales volumes after raising prices to offset inflationary pressures. As growth stalled, larger rivals circled with takeover interest to tap into the strong consumer awareness of brands like Twinkies. Hostess ultimately opted for Smucker’s buyout offer.
The transaction comes amid a wave of deal-making in the food industry, as companies look to acquisitions for expansion. With the Hostess deal, Smucker follows in the footsteps of rivals like Campbell Soup, Mars, and Unilever which have all acquired brands in recent months to spur growth.
The Hostess acquisition is expected to close in January 2024 after customary approvals. It will add an estimated $1.4 billion in Hostess net sales to Smucker’s portfolio upon completion.
Take a look at Fat Brands Inc., a leading global franchising company that acquires, markets and develops fast casual and casual dining restaurant concepts around the world.
Online grocery delivery firm Instacart is gearing up to go public and has set the terms for its initial public offering (IPO). In a regulatory filing on Monday, Instacart outlined plans to raise around $616 million through the offering of 22 million shares priced between $26 and $28 each.
The IPO would give Instacart a fully diluted valuation of up to $9.3 billion. This is below earlier estimates of a $40 billion valuation, indicating moderating growth expectations. Nonetheless, the offering could still mark one of the largest public listings this year amid a freeze on IPOs over the past year due to market volatility.
Founded in 2012, San Francisco-based Instacart has established itself as a leading online grocery platform in the U.S. It partners with grocers and retailers to deliver items to customers’ doors in as little as an hour. Instacart competes in a crowded space against entrenched firms like Walmart and Amazon as well as delivery apps like DoorDash and GoPuff.
Take a moment to look at 1-800 Flowers.com, a leading e-commerce business platform that delivers gifts designed to help inspire customers to give more, connect more, and build more relationships.
Instacart plans to sell 14.1 million newly issued shares in the IPO, with the remainder offered by existing shareholders. Multiple prominent investors have committed to buying shares in the offering, including PepsiCo, which is investing $175 million, and Norges Bank Investment Management, Norway’s sovereign wealth fund.
Proceeds from the IPO will provide funding for Instacart to invest in areas like technology, fulfillment, and advertising as it aims to turn a profit. The company posted revenues of $1.8 billion in 2020 but has yet to become profitable.
The upcoming listing will test investor appetite for high-growth tech IPOs after a yearlong freeze. Instacart’s debut performance will depend on prevailing market sentiment closer to its trading date. But a successful IPO could boost Instacart’s brand and validate its status as a leading next-generation grocery platform.
FORT WAYNE, Ind., May 30, 2023 (GLOBE NEWSWIRE) — Vera Bradley, Inc. (Nasdaq: VRA) (the “Company”) today announced the Company is set to rejoin the broad-market Russell 3000® Index and the small-cap Russell 2000® Index at the conclusion of the 2023 Russell indexes annual reconstitution, effective after the U.S. stock market opens on June 26, 2023, according to a preliminary list of additions announced on May 19, 2023.
The annual reconstitution process for the Russell indexes captures the 4,000 largest U.S. stocks as of April 28, 2023, ranking them by total market capitalization. Membership in the U.S. All-Cap Russell 3000® Index, which remains in place for one year, means automatic inclusion in the Large-Cap Russell 1000® Index or Small-Cap Russell 2000® Index, as well as the appropriate growth and value style indexes.
Russell indexes are widely used by investment managers and institutional investors for index funds and as benchmarks for active investment strategies. Approximately $17.9 trillion in assets is currently benchmarked against Russell’s U.S. indexes. Russell indexes are part of FTSE Russell, a leading global index provider.
Jackie Ardrey, Chief Executive Officer of the Company, noted, “We are pleased to rejoin the Russell 3000® Index and believe our inclusion will provide greater visibility, liquidity, and opportunity to reach a broader range of investment managers and institutional investors.”
For more information on the Russell 3000® Index and the Russell indexes reconstitution, go to the “Russell Reconstitution” section on the FTSE Russell website.
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.
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.
About FTSE Russell
FTSE Russell is a global index leader that provides innovative benchmarking, analytics and data solutions for investors worldwide. FTSE Russell calculates thousands of indexes that measure and benchmark markets and asset classes in more than 70 countries, covering 98% of the investable market globally.
FTSE Russell index expertise and products are used extensively by institutional and retail investors globally. Approximately $17.9 trillion is currently benchmarked to FTSE Russell indexes. For over 30 years, leading asset owners, asset managers, ETF providers and investment banks have chosen FTSE Russell indexes to benchmark their investment performance and create ETFs, structured products and index-based derivatives.
A core set of universal principles guides FTSE Russell index design and management: a transparent rules-based methodology is informed by independent committees of leading market participants. FTSE Russell is focused on applying the highest industry standards in index design and governance and embraces the IOSCO Principles. FTSE Russell is also focused on index innovation and customer partnerships as it seeks to enhance the breadth, depth and reach of its offering.
FTSE Russell is wholly owned by London Stock Exchange Group.
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 plans; 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. Risks, uncertainties, and assumptions also include the possibility that Pura Vida acquisition benefits may not materialize as expected and that Pura Vida’s business may not perform as expected. 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.
– Newly appointed CFO Michael Schwindle brings well-rounded fiscal, operational, and strategic leadership to support Project Restoration –
– Company targeting $12 million in incremental cost reductions in addition to $27 million previously identified –
FORT WAYNE, Ind., April 25, 2023 (GLOBE NEWSWIRE) — Vera Bradley, Inc. (Nasdaq: VRA) (the “Company”) today announced the Company is making additional corporate organizational changes and targeting $12 million in incremental cost reductions for the fiscal year ending February 3, 2024, including the elimination of approximately 25 corporate positions as part of an overall plan to further right-size the expense structure of the enterprise.
Jackie Ardrey, Chief Executive Officer of the Company, noted, “We are committed to returning Vera Bradley and Pura Vida to profitable growth and generating strong cash flow as a Company, which I believe will deliver value to our shareholders over the long term. Earlier this year, we launched Project Restoration, focusing on four key pillars of the business for each brand – Consumer, Brand, Product, and Channel – to drive this long-term profitable growth.”
“The work on Project Restoration started this quarter,” Ardrey continued, “and it is supported by improved financial discipline and cost control. These efforts together will make us a stronger, healthier Company on the top and bottom line.”
“I am pleased to announce that Michael Schwindle will join the Company as Chief Financial Officer on May 8. His track record of driving profitable growth, along with his passion for retail and operational excellence, will be instrumental as the Company executes Project Restoration and in the years beyond,” Ardrey said.
Schwindle is a retail industry veteran with over 30 years of experience, including more than 15 years in Chief Financial Officer roles, delivering strong results through profit improvement and by providing innovative solutions. Since early 2020, he has served as CFO for accessory and jewelry retailer Claire’s. Previously, he held CFO roles at specialty retailers Fleet Farm, Payless ShoeSource, Harry & David, and Musician’s Friend, as well as other key financial roles at Home Depot and Limited Brands. Schwindle began his career at Deloitte & Touche LLP.
John Enwright, the Company’s Chief Financial Officer, will be stepping down as a result of the reorganization. Enwright will work closely with Schwindle through early June to ensure a smooth transition. Ardrey noted, “On behalf of the Board and our entire team, I want to thank John for his many contributions during his nine years of service and for his commitment to our Company, brands, culture, and Associates. We wish him all the best in the future.”
The Company is making several organizational changes in the Marketing, Ecommerce, Product Design, and Product Development areas that will eliminate approximately 25 corporate positions. The Company will also reduce other non-payroll costs throughout the organization, including but not limited to: non-working marketing expenses, third-party contracts and professional services, logistics, operational costs, and travel.
Ardrey noted, “This flattened and streamlined organizational structure will help us improve execution; make faster decisions; and provide support for the Consumer, Brand, Product, and Channel pillars of Project Restoration. These most recent organizational changes and non-payroll expense reductions are expected to produce annualized savings of approximately $12 million, on top of the $27 million of cost reductions previously identified and largely realized in fiscal 2023. All of these initiatives should position Vera Bradley, Inc. to be a stronger, more nimble organization.”
“We are committed to delivering improved value to our shareholders,” Ardrey continued. “These efforts will allow us to reset our expense base and simplify the organization, so we can focus fully on Project Restoration and on delivering both healthy top- and bottom-line growth in the future.”
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.
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 plans; 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. Risks, uncertainties, and assumptions also include the possibility that Pura Vida acquisition benefits may not materialize as expected and that Pura Vida’s business may not perform as expected. 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.
CONTACTS: Investors: Julia Bentley, VP of Investor Relations and Communications jbentley@verabradley.com (260) 207-5116
One popular meme stock, Bed Bath & Beyond (BBBY) is being delisted from the Nasdaq exchange, according to a company announcement. There are a number of reasons a public company can delist from an exchange. In BBBY’s case it is related to their recent bankruptcy filing, according to management. Below are examples of the many reasons a company would delist, what happened in BBBY’s case, and what delisting means for investors.
Many Reasons to Delist
Delisting from the stock exchange refers to the removal of a company’s shares from public trading on a particular exchange. It occurs by management choice or at the exchange’s request. The process can happen for various reasons, such as regulatory violations, bankruptcy, or a company’s decision to go private. Delisting can have significant consequences for the corporation and its investors, including decreased liquidity and visibility in the market.
A common reason for delisting is regulatory violations. For example, if a company fails to comply with the reporting requirements of the Securities and Exchange Commission (SEC), it may face delisting from the stock exchange. This was the case with Chinese tech giant Alibaba, which was delisted from the Hong Kong Stock Exchange in 2020 because of regulatory violations.
Sometimes, companies have a reason to take themselves private and delist as part of that process. Going private means that a corporation’s shares are no longer traded on public stock exchanges. In 2013, computer maker Dell was taken private in a deal worth $24.9 billion. The company’s delisted its shares from the NASDAQ exchange. Twitter was recently purchased and taken private.
As is the case with Bed Bath and Beyond, bankruptcy often causes shares not to meet the exchange’s criteria, forcing a delisting. Another retailing example is Toys R Us in 2018. It filed for bankruptcy and was subsequently delisted from the New York Stock Exchange (NYSE).
Delisting can have significant implications for a company and its shareholders. One of the main consequences is a decrease in liquidity. When a company is delisted, its shares are no longer traded on public stock exchanges, which means that investors may have a harder time finding buyers or sellers for their shares.
Additionally, delisting can impact a company’s visibility in the market. Without a public listing, a company may find it more difficult to attract investors and raise capital. This can be particularly challenging for small and mid-sized companies that rely on the stock market to raise funds.
Bed Bath and Beyond’s Delisting
Trading in BBBY common stock will cease at the opening of the trading day on May 3 – according to a filing with the Securities and Exchange Commission (SEC).
In its bankruptcy announcement, the company said trading of shares would halt on the Nasdaq exchange. Nasdaq and the NYSE have standards companies need to meet for their stocks to be listed and stay listed. This includes minimum levels of liquidity, market value, or price level.
Back in January, Nasdaq warned the company its shares would be delisted after it failed to report quarterly results in a timely manner. The company eventually filed the report and returned to compliance. This time Bed Bath and Beyond said it doesn’t intend to appeal.
Shareholders will still own the stock and fractional shares of the company after May 3. However, without the help of a major exchange, trading between stockholders and speculators is usually much more difficult. Some bankrupt companies’ stocks continues to trade in over-the-counter markets (OTC). They typically have the letter “Q” at the end of their stock symbol. It isn’t yet clear if BBBY will trade as BBBYQ.
After a company files for Chapter 11, unsecured creditors—including suppliers and leaseholders—line up in an attempt to get repaid. How much creditors get paid back depends on how much money Bed Bath and Beyond can raise from the sale of either parts of its business or the chain itself.
Take Away
Delisting from major stock exchanges can happen for various reasons and can have significant consequences for investors. While regulatory violations and bankruptcy can lead to forced delisting, companies may choose to delist voluntarily to go private or for other strategic reasons. Regardless of the reason, delisting can impact a company’s liquidity and visibility in the market, making it important for investors to carefully consider the implications before investing in delisted companies or those facing delisting.
JERICHO, N.Y.–(BUSINESS WIRE)– 1-800-FLOWERS.COM, Inc. (NASDAQ: FLWS) (the “Company”),a leading provider of gifts designed to help inspire customers to give more, connect more, and build more and better relationships, today announced that the Company will release financial results for its fiscal 2023 third quarter on Thursday, May 11, 2023. The press release will be issued prior to market opening and will be followed by a conference call with members of senior management at 8:00 a.m. (ET).
The conference call will be available via live webcast from the Investors section of the Company’s website at 1800flowersinc.com. A recording of the call will be posted on the 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) on May 11, 2023, through May 18, 2023, at: (US) 1-877-344-7529; (Canada) 855-669-9658; (International) 1-412-317-0088; enter conference ID: #4785326.
Special Note Regarding Forward-Looking Statements:
Some of the statements contained in the Company’s scheduled Thursday, May 11, 2023, press release and conference call regarding its results for its fiscal 2023 third quarter, other than statements of historical fact, may be forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the applicable statements. For a more detailed description of these and other risk factors, please refer to the Company’s SEC filings including its Annual Reports and Forms 10K and 10Q available at the Investor Relations section of the Company’s website at 1800flowersinc.com. The Company expressly disclaims any intent or obligation to update any of the forward-looking statements made in the scheduled conference call and any recordings thereof, or in any of its SEC filings, except as may be otherwise stated by the Company.
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®, Stock Yards® and Simply Chocolate®. Through the Celebrations Passport® loyalty program, which provides members with free standard shipping and no service charge 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; and Alice’s Table®, a lifestyle business offering fully digital livestreaming and on demand floral, culinary and other experiences to guests across the country. 1-800-FLOWERS.COM, Inc. was recognized among the top 5 on the National Retail Federation’s 2021 Hot 25 Retailers list, which ranks the nation’s fastest-growing retail companies, 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 or follow @1800FLOWERSInc on Twitter.
Elon Musk Announces New Financial Functionality on Twitter
Starting today, Twitter will provide tweeters the ability to buy and sell stocks and crypto on its platform via eTORO. Twitter owner, Elon Musk has been indicating he intends to turn the popular micro-blogging platform into a “super app.” Today’s move shows substantial headway in allowing financial transactions to be conducted on the social media platform. Other company goals since Musk’s purchase of the company include ride hailing, and attracting video influencers that may be disenchanted with YouTube restrictions on speech.
What Will the Twitter eTORO Partnership Provide?
Founded in 2007, eTORO has become one of the largest social investment networks and trading platforms. According to its website, it is “built on social collaboration and investor education: a community where users can connect, share, and learn.”
Twitter will partner with the platform to allow users (known as tweeters and Twitterers) to trade stocks and cryptocurrencies as part of a deal with the social investing company.
This partnership will provide access to view charts and trade stocks, cryptocurrencies, and other investment assets from eToro via its mobile platform. Together this significantly expands real-time trading data available to users who already have access on Twitter to real-time data, however this arrangement adds all the bells and whistles a modern trading app can provide.
Twitter will be expanding its use of cashtags as well. Twitter added pricing data for $Cashtags (company ticker preceded by “$”) in December 2022. Since January, there have been more than 420 million searches using Cashtags – the number of searches averages 4.7 million a day.
eToro CEO Yoni Assia told CNBC the deal will help better connect the two brands, adding that in recent years its users have increasingly turned to Twitter to “educate themselves about the markets.”
Assia said there is a great deal of “very high quality” content available in real-time and that the partnership with Twitter will help eToro expand to reach new audiences tapping this as a source of information.
Update on Elon
After Musk’s purchase of Twitter, many advertisers stepped back and watched to see how far the company would go to allow less moderated interaction. On Wednesday (April 12) Musk said that “almost all” advertisers had returned to the app. However, Stellantis and Volkswagen, two large competitors with Musk run Tesla, said they do not yet plan to resume advertising.
Musk told a Morgan Stanley conference last month he wants Twitter to become “the biggest financial institution in the world.” This begs those that follow Musk to ask, “Why stop there, why not include Mars?”
What Else
Be sure to follow Channelchek on Twitter (@channelchek) to stay up to date on market insights, news, videos, and of course, top-tier investment analyst research on small and microcap opportunities.
On May 11 the Covid National Emergency Will Be Declared Over – Are You in the Right Stocks?
Were there any companies that had lasting benefits from the shutdowns and lockdowns in response to the pandemic? During the first two years of the 2020s, pandemic consumer behavior caused sports equipment makers, communications, ecommerce, and healthcare companies to be favorites of investors. As investors then pivoted and began to look for the “post-covid” trade, many of these high-flyers, including Peleton (PTON), Teledoc (TDOC), Chlorox (CLX) and others, no longer held the advantage they had, and sold off. The focus then turned to energy, leisure, and other segments that had been decimated during forced lockdowns and fear. While some once strong sectors and segments faltered, some ecommerce companies, that were experiencing growth going into the pandemic, received a huge, albeit challenging, boost during the changed economy. The astute ones took the opportunity to grow deeper roots.
Online businesses are one segment where many companies maintained their bulge from the Covid lockdowns. The following insights are largely from a roadshow I attended, supplemented by research by Noble Capital Markets on Channelchek.com. While this isn’t the only ecommerce business that has retained substantial benefits from the pandemic, it is a company that can serve as a template as to what to look for when doing your own fundamental analysis.
Toll free numbers (eight hundred numbers) for decades helped consumers overcome the reluctance to incur long-distance phone charges when needing help ordering from a mail order company. At the same time they saved the company from time-consuming collect calls. Introduced in 1967, it was a win-win technology that was quickly adopted and allowed broader reach.
From very humble beginnings an entrepreneur who still heads the company grew a 14-store flower shop based on Long Island by amassing enough financing to acquire 1-800-FLOWERS (FLWS), an ailing store based in Texas. His company instantly became a national brand through the use of this toll-free technology.
The company today is worth over $621 million and has not forgotten that they are a technology-based retailer. Their product is also not narrowly defined as flowers, but instead gifts for special occasions and people who are special to you. FLWS is a successful online retailer, willing to engage pertinent technology, learn from it, adapt that which works, and commercialize it to maintain a competitive edge in the ecommerce segment. This includes automation which helps offset post-pandemic era wage increases; artificial intelligence, which can help customers customize a notecard with a poem; and of course all that helps online retail build customers.
The pandemic allowed FLOWERS to double the size of its file of customers. On the revenue side, the company went from $1.2 billion in 2019, then quickly grew and peaked at $2.2 billion by March of 2022. They have been able to keep much of this revenue gain, and it isn’t going backward. This is because the ecommerce trend was already in place, but the pandemic helped accelerate the use and permanent adoption by individuals that are now in the habit of thinking online when it comes to special occasion gifts. This trend continues, even as the overall economy is showing cracks.
The negative for FLOWERS, like other retailers operating during the pandemic period, was grappling with supply chain issues and dramatically higher shipping costs. The cost of having a container shipped has now dropped significantly. FLWS, during the worst period, had worked to keep more than ample inventory of non-perishables since the supply-chain was not reliable. As a result, they are still working off more expensive inventory, which has the effect of a higher cost of goods sold, this shows up on financials as narrower profit margins. The working off of this more expensive inventory and replenishing it with goods with lower shipping costs should serve to expand profit margins going forward, even if revenue remains neutral.
Ecommerce
How might this this apply to other ecommerce companies? Flowers has innovative management that is not afraid to experiment with technology and adapt to their business those which helps save them money or reach more customers. A good way to discern this is by attending industry conferences such as NobleCon19 in December or attending roadshows as I did to meet FLWS management.
Another characteristic that this company had, that is admirable, is an acceleration of users during the pandemic that may not have otherwise decided to buy online. The company makes good use of this larger root system and stays in touch with the customers using its expanded list, sharing thoughts on other offerings.
An interesting situation of 1(800)-FLOWERS.com that may exist with others is the changed cost of shipping and inventory. This negative, which is still unwinding, provides a declining cost of goods sold for a period of time. This could translate into higher earnings, depending on other market and business factors – this could get the attention of investors. It’s important to note that once inventories are worked off, margins would stabilize, and lower-cost inventories would no longer contribute to net earnings.
Take Away
Meeting with management, in this case at a road show sponsored by Noble Capital Markets (see calendar here), or at a large investor conference such as NobleCon (Information provided here) helps provide insight into a company itself, an evaluation of management, plus ideas of what to look for in related companies. I wouldn’t expect CNBC or Bloomberg to spend as much time discussing a $621 million company as they spend on AAPL or MSFT, nor would I expect that the average investor can have breakfast with Elon Musk of Tesla or Mark Zuckerberg of META, and get to know their plans, their company, and current industry factors that they are challenged with.
If you are serious about discovering what’s beyond CNBC, Stocktwits, and Yahoo Finance, I recommend attending a meet-the-management style road show and if you can, an investment conference that showcases industries you are interested in.
Net revenues totaled $500.0 million for the fiscal year
Net loss totaled ($59.7) million, or ($1.90) per diluted share, for fiscal year; excluding certain items, non-GAAP net income totaled $7.6 million, or $0.24 per diluted share
Balance sheet remains strong, with cash and cash equivalents of $46.6 million and no debt
Management provides guidance for fiscal year ending February 3, 2024
FORT WAYNE, Ind., March 08, 2023 (GLOBE NEWSWIRE) — Vera Bradley, Inc. (Nasdaq: VRA) (or the “Company”) today announced its financial results for the fourth quarter and fiscal year ended January 28, 2023 (“Fiscal 2023”).
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 only to the Vera Bradley brand.
Fourth Quarter and Fiscal Year Comments
Jackie Ardrey, Chief Executive Officer of the Company, noted, “We focused on driving revenues in the fourth quarter through targeted, strategic promotions on seasonal, giftable, and key items. As a result, total Company fourth quarter revenues outperformed our guidance, although gross margins remained under pressure. Diligent expense control enabled us to deliver fourth quarter non-GAAP diluted EPS of $0.16, which was nearly flat with last year.
“In the fourth quarter, sales trends at both Vera Bradley and Pura Vida improved over prior quarters, with Vera Bradley total sales down just 1% and Pura Vida sales down less than 5% on a year-over-year basis. For the fourth consecutive quarter, the Vera Bradley Indirect Channel experienced year-over-year revenue growth. Targeted customer retention efforts led to increased Vera Bradley e-commerce revenues, while Full-Line and Factory store revenues continued to be negatively affected by traffic levels, although trends improved throughout the quarter.”
Ardrey continued, “At Pura Vida, e-commerce trends improved over previous quarters due to strategic promotions; however, overall challenges continued to persist in our social and digital media effectiveness coupled with rising digital media costs. And, we experienced a year-over-year sales decline in our wholesale channel. On the plus side, Pura Vida Full-Line retail stores continued to perform ahead of our expectations, and they drove improved e-commerce traffic and revenues in their markets.
“We also took the opportunity in the fourth quarter to reset and appropriately position the Pura Vida business for the future, by recording goodwill and tradename impairments and necessary inventory write-offs.
“We ended the fiscal year with consolidated revenues of $500 million. During the year, we began to see stabilization in our supply chain, diligently controlled our expenses, and carefully managed our cash. During the fourth quarter, we meaningfully reduced our year-end inventory levels from the third quarter.”
Ardrey added, “Although Fiscal 2023 had its challenges, we took actions and laid the groundwork to position the Company for the future.
“On a corporate basis:
In mid-2022, we collaboratively identified $25 million in annualized cost-reduction initiatives and efficiency processes. The expense savings were derived across various areas of the Company, including payroll reductions, retail store efficiencies, marketing expenses, information technology contracts and projects, professional services, and logistics and operational costs. Many of the savings were realized in Fiscal 2023.
In January 2023, we further streamlined our corporate structure by eliminating the positions of Vera Bradley Brand President, Chief Creative Officer, and Chief Revenue Officer, and by adding the position of Chief Marketing Officer, designed to drive additional annual cost savings of approximately $2 million, add more focus on marketing and merchandising, and position the Company to deliver steady top- and bottom-line growth. These decisions were made in order to right-size our leadership team and cost structure for the size of our business, to address the continuing challenging macro environment, and to best position us to achieve our long-term strategic plans.
Subsequent to the end of Fiscal 2023, in January 2023, we acquired the remaining 25% interest in Pura Vida from founders Griffin Thall and Paul Goodman for $10 million.
We continued to make investments in customer data science, business analytics, and pricing optimization, allowing us to collect and analyze data and make fact-based decisions to more efficiently run our business.
“At the Vera Bradley brand:
We expanded our robust product innovation pipeline, including launching our Featherweight Collection; continued another year of iconic product collaborations, including with Disney, Harry Potter, and Crocs; and expanded our cozy, sleep, and outerwear collections.
We continued to strengthen and rationalize our store base. We opened five new Factory stores and closed 19 underperforming Full-Line stores and one Factory store, ending the fiscal year with 51 Full-Line and 79 Factory locations. We also continued to expand options for customers to shop, like enhancing our presence in third-party marketplaces and adding boutiques in select high-traffic airports.
“At the Pura Vida brand:
We entered into several high-profile product collaborations, with brands such as Hello Kitty, Disney, and Harry Potter, and expanded our product offerings by launching our demi-fine collection and expanding our assortment of engravable jewelry, all designed to bring new customers to our brand.
We focused on building a more diverse, innovative, effective, and performance-based marketing program to drive Pura Vida e-commerce sales. We began the process of implementing a comprehensive customer data platform to build a single, coherent, complete view of each Pura Vida customer so that we can better target and personalize marketing and become less reliant on third-party marketing. This project is scheduled for completion this spring. We continued to engage our micro influencers, significantly expanded our TikTok presence, launched impactful ads on connected TV, optimized SMS, and aggressively explored other methods to effectively reach our customers.
We opened three new Pura Vida Full-Line stores during the year, bringing our Full-Line store count to four, which collectively are exceeding our expectations. These four stores are playing a role in driving new customer acquisition as we continue to diversify our marketing platforms, and they demonstrate the power a retail presence can have in driving digital sales, omni-channel loyalty, and spending.”
Summary of Financial Performance for the Fourth Quarter
Consolidated net revenues totaled $147.1 million for the current year fourth quarter compared to $149.6 million in the prior year fourth quarter.
For the current year fourth quarter, Vera Bradley, Inc.’s consolidated net loss totaled ($28.2) million, or ($0.91) per diluted share. These results included $33.1 million of net after tax charges, comprised of $22.4 million of goodwill and intangible asset impairment charges; $6.7 million of net inventory and purchase order-related adjustments; $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; and $0.3 million of consulting and professional fees primarily associated with strategic initiatives. On a non-GAAP basis, Vera Bradley, Inc.’s consolidated fourth quarter net income totaled $5.0 million, or $0.16 per diluted share.
For the prior year fourth quarter, Vera Bradley, Inc. consolidated net income totaled $5.2 million, or $0.15 per diluted share. These results included $0.5 million of net after tax charges primarily related to intangible asset amortization. On a non-GAAP basis, excluding these charges, Vera Bradley, Inc.’s prior year consolidated fourth quarter net income totaled $5.7 million, or $0.17 per diluted share.
Summary of Financial Performance for the Fiscal Year
Consolidated net revenues totaled $500.0 million for Fiscal 2023 compared to $540.5 million for Fiscal 2022.
For the current fiscal year, Vera Bradley, Inc.’s consolidated net loss totaled ($59.7) million, or ($1.90) per diluted share. These results included $67.4 million of net after tax charges, comprised of $40.6 million of goodwill and intangible asset impairment charges; $12.2 million of net inventory and purchase order-related adjustments; $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; $1.8 million for the amortization of definite-lived intangible assets; $1.0 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 $0.3 million of goodMRKT exit costs. On a non-GAAP basis, Vera Bradley, Inc.’s consolidated net income totaled $7.6 million, or $0.24 per diluted share.
For the prior fiscal year, Vera Bradley, Inc.’s consolidated net income totaled $17.8 million, or $0.52 per diluted share. These results included $1.8 million of net after tax charges primarily related to intangible asset amortization. On a non-GAAP basis, excluding these charges, Vera Bradley, Inc.’s prior year consolidated net income totaled $19.7 million, or $0.57 per diluted share.
Looking Ahead
Ardrey noted, “We are committed to returning Vera Bradley and Pura Vida to profitable growth and generating strong cash flow as a Company, which I believe will deliver value to our shareholders over the long term. Since joining the Company in November, I am more convinced than ever that both brands have enormous potential, and I am very excited about the future of Vera Bradley, Inc. We have a portfolio of two iconic, lifestyle brands; multi-generational customers with remarkable loyalty and devotion; impressive brand recognition; a solid balance sheet; and an extraordinary culture. We have some heavy lifting to do in fiscal 2024, but I am confident that we will emerge a stronger Company.”
Ardrey continued, “At both brands, we are embarking on Project Restoration and will focus on four key pillars – Consumer, Brand, Product, and Channel – to drive this long-term profitable growth.
“At Vera Bradley:
Consumer: We will focus on restoring brand relevancy, targeting casual and feminine 35 to 54 year old women who value both fashion and function.
Brand: We will strategically market our distinctive and unique position as a feminine, fashionable brand that connects with consumers on a deep, emotional level.
Product: We will refocus on core categories and items we are “best at,” by innovating and expanding within our core products. We will elevate our colorful feminine heritage, keeping it distinctive but more trend relevant through updated print and design. We also will innovate into strategic adjacent lifestyle item introductions that make sense for our customers.
Channel: We will accelerate our digital-first focus and online presence, build a balanced footprint that more clearly differentiates Full-Line from Factory stores, and target and/or strengthen relationships with strategically-aligned wholesale partners.
“At Pura Vida:
Consumer: We will sharpen our focus on the care-free 18 to 24 collegiate girl, who both those younger and older aspire to be.
Brand: We will recenter our brand ethos on “living life to the fullest,” with marketing authentically sharing real moments, places, and faces.
Product: We will focus 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.
Channel: We will have a strong focus on restoring e-commerce growth; strategic growth of wholesale by pursuing larger, more strategic partnerships and expanding larger existing accounts; and refining our existing store model.”
“To support growth and development of our two brands, on a corporate basis, we will continue to make strategic investments in the right talent to help drive the transformation and diligently manage our supply chain, gross margin, SG&A expenses, and cash flow,” Ardrey concluded.
Non-GAAP Numbers
The current year non-GAAP fourth quarter income statement numbers referenced below exclude the previously outlined charges for goodwill and intangible asset impairment; net inventory and purchase order-related adjustments; severance, retention, and stock-based retirement compensation; new CEO sign-on bonus and relocation; amortization of definite-lived intangible assets; and consulting and professional fees primarily associated with strategic initiatives. The current 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. The prior year non-GAAP fourth quarter and fiscal year income statement numbers referenced below exclude the previously outlined intangible asset amortization and store impairment charges.
Fourth Quarter Details
Current year fourth quarter Vera Bradley Direct segment revenues totaled $99.5 million, a 4.6% decrease from $104.4 million in the prior year fourth quarter. Comparable sales decreased 4.5% from the prior year. The Company permanently closed 19 Full-Line stores and one Factory store and opened five Factory stores in the last twelve months.
Vera Bradley Indirect segment revenues totaled $16.7 million, a 28.5% increase over $13.0 million in the prior year fourth quarter. The increase was broad-based with both specialty and key accounts posting year-over-year sales gains.
Pura Vida segment revenues totaled $30.9 million, a 4.2% decrease from $32.2 million in the prior year fourth quarter. The decline was primarily related to lower wholesale sales, partially offset by new store openings.
Fourth quarter consolidated gross profit totaled $60.0 million, or 40.8% of net revenues, compared to $76.1 million, or 50.9% of net revenues, in the prior year fourth quarter. On a non-GAAP basis, current year consolidated gross profit totaled $71.3 million, or 48.5% of net revenues. The current year gross profit rate primarily was negatively affected by higher inbound and outbound freight expense and increased promotional activity, partially offset by price increases.
Consolidated SG&A expense totaled $70.0 million, or 47.6% of net revenues, compared to $67.9 million, or 45.4% of net revenues, in the prior year fourth quarter. On a non-GAAP basis, consolidated SG&A expense totaled $64.4 million, or 43.8% of net revenues, compared to $67.1 million, or 44.8% of net revenues, in the prior year fourth quarter. Vera Bradley’s SG&A current year expenses were lower than the prior year primarily due to cost reduction initiatives and a reduction in variable-related expenses due to the lower sales volume.
The Company’s fourth quarter consolidated operating loss totaled ($49.8) million, or (33.8%) of net revenues, compared to operating income of $8.3 million, or 5.5% of net revenues, in the prior year fourth quarter. On a non-GAAP basis, fourth quarter consolidated operating income totaled $7.0 million, or 4.8% of net revenues, compared to $9.1 million, or 6.1% of net revenues, in the prior year.
By segment:
Vera Bradley Direct fourth quarter operating income was $18.5 million, or 18.6% of Direct net revenues, compared to $21.7 million, or 20.7% of Direct net revenues, in the prior year. On a non-GAAP basis, current year Direct fourth quarter operating income was $19.8 million, or 19.9% of Direct net revenues, compared to $21.7 million, or 20.8% of Direct net revenues, in the prior year.
Vera Bradley Indirect fourth quarter operating income was $4.6 million, or 27.3% of Indirect net revenues, compared to $2.9 million, or 22.5% of Indirect net revenues, in the prior year. On a non-GAAP basis, current year Indirect fourth quarter operating income was $5.3 million, or 32.0% of Indirect net revenues.
Pura Vida’s current year fourth quarter operating loss was ($49.8) million, or (161.2%) of Pura Vida net revenues, compared to operating income of $2.0 million, or 6.2% of Pura Vida net revenues, in the prior year. On a non-GAAP basis, Pura Vida’s current year fourth quarter operating income was $0.4 million, or 1.3% of Pura Vida net revenues, compared to $2.8 million, or 8.6% 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 $328.2 million, 7.5% decrease from $354.9 million in the prior year. Comparable sales declined 9.5% for the fiscal year.
Vera Bradley Indirect segment revenues for the fiscal year totaled $73.3 million, an 11.1% increase over $66.0 million in the prior year, primarily reflecting an increase in certain key account orders.
Current year Pura Vida segment revenues totaled $98.4 million, a 17.7% decrease from $119.6 million in the prior year. Pura Vida’s e-commerce revenues continue to be negatively impacted by the shift in social and digital media effectiveness and rising digital media costs, and a decline in sales to wholesale accounts.
Consolidated gross profit for the current fiscal year totaled $238.9 million, or 47.8% of net revenues, compared to $287.9 million, or 53.3% of net revenues, last year. On a non-GAAP basis, gross profit for the current fiscal year totaled $257.2 million, or 51.4% of net revenues. The current year gross profit rate primarily was negatively affected by higher inbound and outbound freight expense and increased promotional activity, partially offset by price increases.
For the fiscal year, consolidated SG&A expense totaled $265.0 million, or 53.0% of net revenues, compared to $262.0 million, or 48.5% of net revenues, in the prior year. On a non-GAAP basis, SG&A expense totaled $245.3 million, or 49.1% of net revenues, in the current year, compared to $258.8 million, or 47.9% of net revenues, in the prior year. Vera Bradley’s SG&A current year expenses were lower than the prior year primarily due to cost reduction initiatives and a reduction in variable-related expenses due to the lower sales volume.
For the fiscal year, the Company’s consolidated operating loss totaled ($94.9) million, or (19.0%) of net revenues, compared to operating income of $26.9 million, or 5.0% of net revenues, in the prior year. On a non-GAAP basis, the Company’s consolidated operating income was $12.3 million, or 2.5% of net revenues, compared to $30.1 million, or 5.6% of net revenues, in the prior year.
By segment:
Vera Bradley Direct operating income was $51.1 million, or 15.6% of Direct net revenues, compared to $73.5 million, or 20.7% of Direct net revenues, in the prior year. On a non-GAAP basis, Direct operating income was $58.3 million, or 17.8% of Direct net revenues, for the current year, compared to $73.6 million, or 20.7% of Direct net revenues, in the prior year.
Vera Bradley Indirect operating income was $23.0 million, or 31.3% of Indirect net revenues, compared to $20.3 million, or 30.8% of Indirect net revenues, in the prior year. On a non-GAAP basis, current year Indirect operating income totaled $24.7 million, or 33.7% of Indirect net revenues.
Pura Vida’s operating loss was ($78.6) million, or (79.9%) of Pura Vida net revenues, compared to operating income of $9.5 million, or 8.0% of Pura Vida net revenues, in the prior year. On a non-GAAP basis, Pura Vida’s operating income was $4.7 million, or 4.8% of Pura Vida net revenues, compared to $12.6 million, or 10.5% of Pura Vida net revenues, in the prior year.
Balance Sheet
Net capital spending for the fiscal year totaled $8.2 million compared to $5.5 million in the prior year.
Cash and cash equivalents as of January 28, 2023 totaled $46.6 million compared to $88.4 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 $142.3 million, compared to $144.9 million at last fiscal year end. Total current year inventory was lower than the prior year primarily due to inventory adjustments associated with excess and discounted inventory, partially offset by incremental logistics costs burdening overall inventory.
During the fourth quarter, the Company repurchased approximately $0.8 million of its common stock (approximately 187,000 shares at an average price of $4.20), bringing the Company’s Fiscal 2023 purchases to $18.1 million (approximately 2.8 million shares at an average price of $6.40). The Company’s $50.0 million share repurchase authorization expires in December 2024. Since Fiscal 2015, the Company has repurchased $132.9 million, or approximately 12.1 million shares, of its common stock.
Forward Outlook
Management is providing estimates for the fiscal year ending February 3, 2024 (“Fiscal 2024”) based on current macroeconomic trends and expectations. Ardrey noted, “We anticipate the Fiscal 2024 macroeconomic environment to continue to be unpredictable and that this year will be a rebuilding year for both of our brands. We expect to take advantage of gross margin improvement opportunities and manage our expense structure diligently.”
The Company is not providing detailed guidance for the first fiscal quarter of 2024 but expects revenues and diluted loss per share to be approximately in line with the prior year. Ardrey stated, “In the first quarter, we will work to stabilize the business. We hope to see momentum build as the year progresses.”
Excluding net revenues, all forward-looking guidance numbers referenced below are non-GAAP. The prior year income statement numbers exclude the previously disclosed charges for goodwill and intangible asset impairment; net inventory and purchase order-related adjustments; severance, retention, and stock-based retirement compensation; consulting and professional fees primarily associated with cost savings initiatives, the CEO search, and strategic initiatives; amortization of definite-lived intangible assets; store and right-of-use asset impairment charges; new CEO sign-on bonus and relocation; and goodMRKT exit costs. Current year guidance excludes any similar charges.
For Fiscal 2024, the Company’s expectations are as follows:
Consolidated net revenues of $490 to $510 million. Net revenues totaled $500.0 million in Fiscal 2023. Both Vera Bradley and Pura Vida revenues are expected to be approximately flat on a year-over-year basis.
A consolidated gross profit percentage of 52.6% to 53.6% compared to 51.4% in Fiscal 2023. The expected year-over-year increase is primarily related to reduced inbound freight expense, partially offset by deleveraged overhead costs related to reduced inventory purchases.
Consolidated SG&A expense of $241 to $251 million compared to $245.3 million in Fiscal 2023. Year-over-year changes in SG&A expense primarily are being driven by restoring short-term and long-term incentive compensation to normal levels, offset by Company-wide cost reduction initiatives.
Consolidated operating income of $17.3 to $21.7 million compared to $12.3 million in Fiscal 2023.
Free cash flow of between $25 and $30 million compared to a cash usage of $21.7 million in Fiscal 2023.
Consolidated diluted EPS of $0.40 to $0.50 based on diluted weighted-average shares outstanding of 31.0 million and an effective tax rate of approximately 28%. Diluted EPS totaled $0.24 last year.
Net capital spending of approximately $5 million compared to $8.2 million in the prior year, reflecting investments associated with new Vera Bradley Factory stores and technology and logistics enhancements.
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 (cash usage) free cash flow; cost of sales; gross profit; selling, general, and administrative expenses; impairment of goodwill and intangible assets; operating (loss) income; net (loss) income; net (loss) income attributable and available to Vera Bradley, Inc.; and diluted net (loss) income 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.
Call Information
A conference call to discuss results for the fourth quarter and fiscal year is scheduled for today, Wednesday, March 8, 2023, 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 (888) 204-4368, and enter the access code 3761893. A replay will be available shortly after the conclusion of the call and remain available through March 22, 2023. To access the recording, listeners should dial (844) 512-2921, and enter the access code 3761893.
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, subsequent to the end of Fiscal 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 stores in the United States, www.verabradley.com, www.verabradley.ca, 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 1,700 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.eu, and www.puravidabracelets.ca; 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 plans; 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. Risks, uncertainties, and assumptions also include the possibility that Pura Vida acquisition benefits may not materialize as expected and that Pura Vida’s business may not perform as expected. 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 29, 2022. We undertake no obligation to publicly update or revise any forward-looking statement. Financial schedules are attached to this release.
CONTACTS: Investors: Julia Bentley, VP of Investor Relations and Communications jbentley@verabradley.com (260) 207-5116
