1-800-FLOWERS.COM, Inc. Reports Revenue Growth of 4.0 Percent To $2.21 Billion for its Fiscal 2022 Full Year

Research, News, and Market Data on 1-800-FLOWERS.COM

Sep 01, 2022

Full Year Highlights:

• Total Net Revenues
  increased 4.0 percent to a record $2.21
  billion, compared with $2.12
  billion in the prior year.
• Net Income was $29.6
  million, or $0.45 per
  diluted share, compared with Net Income of $118.7
  million, or $1.78 per
  diluted share, in the prior year period. Adjusted Net Income¹ was $32.9
  million, or $0.50 per
  diluted share, compared with $122.6
  million, or $1.84 per
  diluted share, in the prior year.
• Adjusted EBITDA¹ was $99.0
  million, compared with $213.1
  million in the prior year, primarily reflecting significantly
  higher year-over-year cost increases in labor, shipping, commodities, and
  digital marketing.

Fourth Quarter Highlights:

• Total Net Revenues were $485.9
  million, compared with $487.0
  million in the prior year period.
• Net Loss was $22.3
  million, or ($0.34)
  per share, compared with net income of $13.3
  million, or $0.20 per
  diluted share, in the prior year period. Adjusted Net Loss¹ was $21.8
  million, or ($0.34)
  per share, compared with Adjusted Net Income¹ of $13.3
  million, or $0.20 per
  diluted share in the prior year period.
• Adjusted EBITDA¹ loss was $16.8
  million, compared with Adjusted EBITDA¹ of $30.2
  million in the prior year period, primarily reflecting
  significantly higher year-over-year cost increases in labor, shipping,
  commodities, and digital marketing.

(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 (“Adjusted”) 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 2022 fourth quarter and full year ended July 3, 2022.

Chris McCann, CEO of 1-800-FLOWERS.COM, Inc., said, “We finished our fiscal year 2022 with revenues essentially flat in our fourth quarter and full year revenues up 4.0 percent compared with the prior year, and up more than 75 percent compared with our fiscal 2019, prior to the pandemic. Our growth for the year illustrates our ability to retain and build on the gains we achieved over the past two years despite macroeconomic uncertainty and changes in consumer behavior. This reflects the healthy growth we have seen in our customer file combined with our expanded product offering and our ever-increasing focus on engaging with our customers through a combination of highly relevant content and unique experiences.

“Inflationary cost increases continued to pose challenges for us in both the fourth quarter and full year. The unprecedented, rapid rise in costs impacted our gross margins and operating expenses – including labor, shipping, commodities, and digital marketing. As a result, our bottom-line results for both the fourth quarter and the full year came in below our expectations.”

McCann said that the Company is focused on addressing those cost issues that are within its control by leveraging its balance sheet to invest in its operating platform, including ongoing investments to automate warehouse and distribution facilities, optimize outbound shipping operations and buy and build inventory early. “We anticipate that the combination of our investments, along with strategic pricing programs and moderation in cost inputs, will enable us to gradually improve our gross margins and our bottom-line results during the latter half of our current fiscal year.”

McCann noted that, during the fourth quarter and throughout the fiscal year, the Company continued to execute on its initiatives to “build a community with our customers. Our expanding range of communication channels feature relevant content, like our weekly Celebrations Pulse Newsletter, and interactive engagement opportunities, like our Alice’s Table^® events. Taken together with our expanded product offerings, these initiatives helped us attract more than 1.5 million new customers during the fourth quarter and more than 5.0 million for the year. In addition, membership in our Celebrations Passport^® loyalty program continued to grow at a double-digit rate for the year. We believe the significant size and robust growth of our customer file and our Celebrations Passport loyalty program over the past several years, along with our expanded product offerings, positions us well to help inspire customers to give more, connect more, and build more and better relationships and continue to grow our business over the long term.”

Fiscal 2022 Fourth Quarter
Results:
For the fourth quarter of 2022, total net revenues were 
$485.9 million
, down 0.2 percent compared with 
$487.0 million
 in the prior year period. Excluding contributions from Vital Choice®, which the Company acquired in October of 2021, total revenue for the quarter was down 1.5 percent, compared with the prior year period. Revenues for the quarter increased 87.3 percent compared with total revenues of 
$259.4 million
 in the fourth quarter of fiscal 2019, prior to the pandemic.

Gross profit margin for the quarter was 33.7 percent, down 700 basis points, compared with 40.7 percent in the prior year period, primarily reflecting significantly increased costs for labor, shipping, and commodities as well as write downs of perishable inventory. Operating expenses as a percent of total revenues was 39.2 percent, representing an increase of 170 basis points, compared with 37.5 percent in the prior year period. This primarily reflects higher digital marketing spend as well as higher depreciation, offset in part by lower incentive compensation and the performance of our non-qualified deferred compensation plan, compared with the prior year period.

As a result, Adjusted EBITDA¹ loss was 
$16.8 million
, compared with Adjusted EBITDA¹ of 
$30.2 million
 in the prior year period, primarily reflecting significantly higher year-over-year costs for labor, shipping, commodities, and digital marketing. Net Loss was 
$22.3 million
, or (
$0.34) per share, compared with net income of 
$13.3 million
, or 
$0.20 per diluted share, in the prior year period. Adjusted Net Loss¹ was 
$21.8 million, or (
$0.34) per share, compared with Adjusted Net Income¹ of 
$13.3, or 
$0.20 per diluted share in the prior year period.

Fiscal 2022 Full Year Results:
Total net revenues for the full year increased 4.0 percent to 
$2.21 billion
, compared with 
$2.12 billion
 in the prior year. This increase reflected growth across the Company’s three business segments, and includes the contributions from Vital Choice and Personalization Mall^®, which were acquired in October 2021 and August 2020, respectively. On a pro-forma basis, total net revenues grew 2.5 percent compared with the prior year. Total net revenues grew 76.8 percent compared with total net revenues of 
$1.25 billion
 in fiscal 2019, prior to the pandemic.

Gross profit margin for the year was 37.2 percent, down 500 basis points, compared with 42.2 percent in the prior year. This primarily reflected significantly increased costs for labor, shipping, commodities and the write down of perishable inventories. Operating expense as a percent of total revenues was 35.3 percent, representing an increase of 10 basis points, compared with 35.2 percent in the prior year. As a result, Adjusted EBITDA¹ was 
$99.0 million
, compared with 
$213.1 million
 in the prior year. Net Income was 
$29.6 million
, or 
$0.45 per diluted share, compared with Net Income of 
$118.7 million
, or 
$1.78 per diluted share, in the prior year period. Adjusted Net Income¹ was 
$32.9 million
, or 
$0.50 per diluted share, compared with 
$122.6 million
, or 
$1.84 per diluted share, in the prior year.

SEGMENT RESULTS:
The Company provides fiscal 2022 fourth quarter and full year selected 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: Revenue for the quarter was 
  $148.4 million
  , down 2.4 percent compared with 
  $152.2 million
   in the prior year period. Excluding Vital Choice®, which the Company acquired in October 2021, revenue for the quarter was 
  $142.7 million
  . Revenue for the quarter was up 104.9 percent compared to the same period in the Company’s fiscal 2019 fourth quarter. Gross profit margin was 23.2 percent, compared with 38.9 percent in the prior year period. Segment contribution margin¹ loss was 
  $23.7 million
  , compared with segment contribution margin of 
  $4.2 million
   in the prior year period. This primarily reflected higher labor, shipping, commodity costs and perishable inventory write downs, as well as higher year-over-year marketing rates. For the year, revenue in this segment increased 5.1 percent to 
  $1.0 billion
  , compared with 
  $955.6 million
   in the prior year. Revenue increased 54.9 percent, compared with revenue in the Company’s fiscal year 2019, prior to the pandemic. Gross profit margin for the year was 34.2 percent, compared with 42.9 percent in the prior year. Adjusted segment contribution margin¹ for the year was 
  $64.9 million, compared with 
  $148.9 million in the prior year.
• Consumer Floral &
  Gifts: Revenue for the quarter increased 0.4 percent to 
  $299.0 million
  , compared with 
  $297.7 million
   in the prior year period. Revenues for the quarter increased 87.2 percent compared with the same period in the Company’s fiscal 2019 fourth quarter. Gross profit margin was 38.0 percent, compared with 41.1 percent in the prior year period, primarily reflecting increased labor and shipping costs. Segment contribution margin¹ was 
  $26.4 million
  , compared with 
  $41.2 million
   in the prior year period. This primarily reflected the lower gross margin combined with higher, year-over-year digital marketing rates. For the year, revenues increased 3.4 percent to 
  $1.06 billion
  , compared with 
  $1.03 billion
   in the prior year. Revenues increased 112.9 percent, compared with the Company’s fiscal year 2019. Gross margin was 39.3 percent, compared with 41.1 percent in the prior year. Segment contribution margin¹ was 
  $104.3 million
  , compared with 
  $128.6 million
   in the prior year.
• BloomNet: Revenue for the quarter increased 3.2 percent to 
  $38.5 million
  , compared with 
  $37.3 million
   in the prior year period. Revenue for the quarter was up 41.2 percent compared to the same period in the Company’s fiscal 2019 fourth quarter. Gross profit margin was 39.6 percent, compared with 43.2 percent in the prior year period, primarily reflecting higher shipping costs as well as product mix. Segment contribution margin¹ was 
  $10.0 million
  , compared with 
  $11.3 million
   in the prior year period. For the year, revenue increased 1.9 percent to 
  $145.7 million
  , compared with 
  $142.9 million
   in the prior year. Revenue increased 41.6 percent, compared with the Company’s fiscal year 2019. Gross profit margin was 42.3 percent, compared with 45.5 percent in the prior year. Segment contribution margin¹ for the year was 
  $42.5 million
  , compared with 
  $45.9 million
   in the prior year.

COMPANY GUIDANCE

• Based on the highly unpredictable nature of the current macro economy, the Company has decided to provide guidance on a quarter-by-quarter basis, including current business trends to date at the time of its regular quarterly results releases.
• Through the first two months of the Company’s current fiscal first quarter, we have seen continued cautious consumer spending behavior reflecting the impact of price inflation, particularly in food and gasoline. As a result, the Company anticipates that its fiscal first quarter revenues will be down in a range of 3.0-to-6.0 percent, compared with the prior year period.
• In terms of cost inputs, the Company anticipates that year-over-year costs for labor, shipping, commodities, and digital marketing will remain high through the first quarter, compared with the prior year period.
• As a result, the Company anticipates that its Adjusted EBITDA loss¹ for the current fiscal first quarter will be in a range of 
  $28.0 million
  -to-
  $33.0 million.
• Looking ahead, the Company anticipates that the combination of the investments it has made – and continues to make – in its business platform, along with strategic pricing programs and moderation of cost inputs, will enable it to gradually achieve improved gross margins and bottom-line results during the latter half of the current fiscal year.
• For the full year, the Company anticipates reduced capital expenditures as well as lower working capital needs compared with the prior year. As a result, the Company expects to generate substantial positive year-over-year free cash flow.

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 Contribution Margin is defined as 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 these limitations when using this measure 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®, 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 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.

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,” “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 fiscal year 2023 first quarter, the latter half of the current fiscal year and the full fiscal year; the impact of the Covid-19 pandemic on the Company; its ability to leverage its operating platform and reduce 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.

Conference Call:
The Company will conduct a conference call to discuss the above details and attached financial results today, Thursday, September 1, at 8:00 a.m. (ET). The conference call will be webcast from the Investor Relations section of the Company’s website at www.1800flowersinc.com. A recording of the call will be posted on the Investor Relations 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 September 8, 2022, at: (US) 1-877-344-7529; (
Canada) 855-669-9658; (International) 1-412-317-0088; enter conference ID #: 4688547. If you have any questions regarding the above information, please contact the Investor Relations office at invest@1800flowers.com.

 

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/20220901005099/en/

Investor Contact:

Joseph D. Pititto

(516) 237-6131

invest@1800flowers.com

Media Contact:

Kathleen Waugh

(516) 237-6028

kwaugh@1800flowers.com

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

 

Thursday, September 01, 2022

Vera Bradley (VRA)
Challenging 2Q23; but Signs of Better Times to Come

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

2QFY23 Results. Net revenues totaled $130.4 million compared to $147.0 million in the prior year second quarter ended July 31, 2021. Vera Bradley reported a consolidated net loss of $29.8 million, or a loss of $0.95 per share versus net income of $9.1 million, or $0.26 per diluted share, last year. Non-GAAP net income was $2.4 million, or $0.08 per diluted share, compared to $9.5 million, or $0.28 per diluted share in 2Q22.

Bifurcation Continues. Vera Bradley continued to see a bifurcation of its customer base, with higher household incomes remaining engaged and continuing to spend, while inflationary pressures, especially higher gas prices, continued to negatively affect the purchases of customers with lower household incomes, as well as traffic and spending….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Vera Bradley Announces Second Quarter Fiscal Year 2023 Results

Research, News, and Market Data on Vera Bradley

Aug 31, 2022

Consolidated second quarter net revenues totaled $130.4 million

Second quarter net loss totaled ($29.8) million, or ($0.95) per diluted share; excluding certain items, non-GAAP net income totaled $2.4 million, or $0.08 per diluted share

Balance sheet remains solid, with cash and cash equivalents of $38.3 million and no debt

FORT WAYNE, Ind., Aug. 31, 2022 (GLOBE NEWSWIRE) — Vera Bradley, Inc. (Nasdaq: VRA) today announced its financial results for the second quarter ended July 30, 2022.

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.

Second Quarter Comments

Rob Wallstrom, Chief Executive Officer of the Company, commented, “While total Company second quarter revenues of $130.4 million were modestly below our expectations and we continued to experience gross margin pressure due to logistics costs, we drove product innovation at both Vera Bradley and Pura Vida, initiated meaningful cost reduction actions, and completed $6.0 million of share repurchases, while maintaining a solid, debt-free balance sheet.

“We are continuing to see bifurcation in the spending of our customer base. At Vera Bradley, Direct Full-Price Channel comparable revenues were nearly flat to last year and up double digits to fiscal 2020 as customers with higher household incomes remained engaged and continued to spend. However, inflationary pressures, especially higher gas prices, continued to negatively affect the purchases of customers with lower household incomes as well as traffic and spending in our Vera Bradley factory stores. Our Vera Bradley Indirect Channel continued to experience a healthy year-over-year rebound. Pura Vida’s ecommerce revenues continued to be affected by the shift in social and digital media effectiveness and escalating digital media costs.

“We are taking decisive actions to strengthen our core brands and the overall enterprise,” Wallstrom added. “We have begun implementation of annualized targeted cost reductions of $25 million, which are expected to be fully realized next fiscal year. These cost reductions will help offset inflationary expense pressures and the recessionary spending behavior from lower-income households. Expense savings are being derived across various areas of the Company, including retail store efficiencies, marketing expenses, information technology contracts, professional services, logistics and operational costs, and corporate payroll. In addition, we are continuing to evaluate and execute strategic price increases for both brands to offset rising raw material and freight costs.

“At the Vera Bradley brand, we remain confident in our core strategy, by continuing to innovate and build on our lifestyle merchandising focus. We will continue to optimize the travel category, which is nearly back to pre-pandemic levels; maximize back-to-campus opportunities, with strategic assortment enhancements; continue with powerful product collaborations like Disney and Harry Potter; and add excitement by expanding our footwear and home assortments this fall.”

Wallstrom continued, “At Pura Vida, we are focused on stabilizing the business and returning the brand to long-term growth. Our number one priority is to build a more diverse, innovative, effective, and performance-based marketing program to drive ecommerce sales. Prudent store growth can play a key role in driving new customer acquisition as we continue to diversify our marketing platforms, and stores demonstrate the power a retail presence can have on driving digital sales, omni-channel loyalty, and spending. We opened one new Pura Vida store location in the quarter, which is exceeding expectations.

“On the product front, we continue to build customer excitement and engagement through collaborations like Disney, Harry Potter, Hello Kitty, and the World Surf League; partnering with key influencers; offering themed-collections centered around key events like Shark Week; and the launch of our new demi-fine collection.”

Wallstrom further noted, “We are planning for the macro environment to remain challenging for the balance of the year and into next year. And, despite the strength in Pura Vida’s store business and opportunity for new store openings, we expect it to take time to return Pura Vida’s ecommerce business to growth as rebuilding and transforming the marketing program is underway. We are taking critical actions that will further strengthen both core brands and our company as a whole, not only to successfully manage through this period but position us for the future. Our teams are focused, and our cash position and balance sheet remain solid. We have successfully managed through difficult business cycles before, and I am confident we will manage through this period as well. We look forward to returning both brands to steady growth.”

Summary of Financial Performance for the Second Quarter

Consolidated net revenues totaled $130.4 million compared to $147.0 million in the prior year second quarter ended July 31, 2021.

For the current year second quarter, Vera Bradley, Inc.’s consolidated net loss totaled ($29.8) million, or ($0.95) per diluted share. These results included $32.2 million of net after tax charges, comprised of $18.2 million of Pura Vida goodwill and intangible asset impairment charges, $4.7 million of inventory adjustments associated with the exit of certain technology products and the write-off of excess mask inventory, $4.7 million of severance charges and other employee costs, $2.3 million of consulting fees associated with cost savings initiatives and the CEO search, $0.9 million of purchase order cancellation fees for spring 2023 goods, $0.6 million of store impairment charges, $0.5 million of intangible asset amortization, and $0.3 million of goodMRKT exit costs. On a non-GAAP basis, Vera Bradley, Inc.’s consolidated second quarter net income totaled $2.4 million, or $0.08 per diluted share.

For the prior year second quarter, Vera Bradley, Inc.’s consolidated net income totaled $9.1 million, or $0.26 per diluted share. These results included $0.4 million of net after tax charges related to intangible asset amortization. On a non-GAAP basis, Vera Bradley, Inc.’s consolidated second quarter net income totaled $9.5 million, or $0.28 per diluted share.

Summary of Financial Performance for the Six Months

Consolidated net revenues totaled $228.8 million for the current year six months ended July 30, 2022, compared to $256.1 million in the prior year six month period ended July 31, 2021.

For the current year six months, Vera Bradley, Inc.’s consolidated net loss totaled ($36.7) million, or ($1.15) per diluted share. These results included $33.1 million of net after tax charges, comprised of $18.2 million of Pura Vida goodwill and intangible asset impairment charges, $4.7 million of inventory adjustments associated with the exit of certain technology products and the write-off of excess mask inventory, $4.7 million of severance charges and other employee costs, $2.4 million of consulting fees associated with cost savings initiatives and the CEO search, $1.0 million of store and right-of-use asset impairment charges, $0.9 million of purchase order cancellation fees for spring 2023 goods, $0.9 million of intangible asset amortization, and $0.3 million of goodMRKT exit costs. On a non-GAAP basis, Vera Bradley, Inc.’s consolidated net loss for the six months totaled ($3.6) million, or ($0.11) per diluted share.

For the prior year six months, Vera Bradley, Inc’s consolidated net income totaled $6.9 million, or $0.20 per diluted share. These results included $0.9 million of net after tax charges related to intangible asset amortization. On a non-GAAP basis, excluding these charges, Vera Bradley, Inc.’s consolidated net income for the prior year totaled $7.8 million, or $0.23 per diluted share, for the six months.

Non-GAAP Numbers

The current year non-GAAP second quarter and six-month income statement numbers referenced below exclude the previously outlined goodwill and intangible asset impairment charges, inventory adjustments, severance charges and other employee costs, consulting fees, store and right-of-use asset impairment charges, purchase order cancellation fees, intangible asset amortization, and goodMRKT exit costs. The prior year non-GAAP second quarter and six-month income statement numbers referenced below exclude the previously outlined intangible asset amortization.

Second Quarter Details

Current year second quarter Vera Bradley Direct segment revenues totaled $87.0 million, a 10.4% decrease from $97.1 million in the prior year second quarter. Comparable sales declined 13.8% in the second quarter. The Company permanently closed eight full-line stores and opened six factory outlet stores in the last twelve months.

Vera Bradley Indirect segment revenues totaled $17.3 million, a 2.9% increase over $16.8 million in the prior year second quarter, reflecting an increase in certain key account orders.

Pura Vida segment revenues totaled $26.0 million, a 21.3% decrease from $33.1 million in the prior year.

Second quarter consolidated gross profit totaled $60.5 million, or 46.4% of net revenues, compared to $80.4 million, or 54.6% of net revenues, in the prior year. On a non-GAAP basis, current year gross profit totaled $67.8 million, or 52.0% of net revenues. The current year gross profit rate was negatively impacted by higher inbound and outbound freight expense, deleverage of overhead costs, and channel mix changes, partially offset by price increases.

Second quarter consolidated SG&A expense totaled $74.0 million, or 56.8% of net revenues, compared to $68.7 million, or 46.7% of net revenues, in the prior year. On a non-GAAP basis, consolidated SG&A expense totaled $64.0 million, or 49.1% of net revenues, for the current year second quarter, compared to $68.0 million, or 46.2% of net revenues, in the prior year. As expected, Vera Bradley’s non-GAAP SG&A current year expenses were lower than the prior year primarily due to a reduction in variable-related expenses due to the lower sales volume and other cost reduction initiatives.

The Company’s second quarter consolidated operating loss totaled ($42.8) million, or (32.8%) of net revenues, compared to consolidated operating income of $12.6 million, or 8.6% of net revenues, in the prior year second quarter. On a non-GAAP basis, the Company’s current year consolidated operating income totaled $3.9 million, or 3.0% of net revenues, compared to $13.4 million, or 9.1% of net revenues, in the prior year.

By segment:

• Vera Bradley Direct operating income was $10.0 million, or 11.5% of Direct net revenues, for the second quarter, compared to $23.2 million, or 23.9% of Direct net revenues, in the prior year. On a non-GAAP basis, current year Direct operating income totaled $16.2 million, or 18.6% of Direct revenues.
• Vera Bradley Indirect operating income was $3.9 million, or 22.6% of Indirect net revenues, compared to $5.6 million, or 33.3% of Indirect net revenues, in the prior year. On a non-GAAP basis, current year Indirect operating income totaled $4.9 million, or 28.4% of Indirect net revenues. 
• Pura Vida’s operating loss was ($28.5) million, or (109.6%) of Pura Vida net revenues, in the current year, compared to operating income of $3.2 million, or 9.8% of Pura Vida net revenues, in the prior year. On a non-GAAP basis, Pura Vida’s operating income was $2.6 million, or 9.8% of Pura Vida net revenues, compared to $4.0 million, or 12.1% of Pura Vida net revenues, in the prior year.

Details for the Six Months

Vera Bradley Direct segment revenues for the current year six-month period totaled $148.6 million, a 9.3% decrease from $163.9 million in the prior year. Comparable sales declined 12.7% for the six months.

Vera Bradley Indirect segment revenues for the six months totaled $34.3 million, a 6.9% increase over $32.1 million, last year, reflecting an increase in certain key and specialty account orders.

Pura Vida segment revenues totaled $45.9 million, a 23.8% decline from $60.2 million in the prior year.

Consolidated gross profit for the six months totaled $113.0 million, or 49.4% of net revenues, compared to $139.5 million, or 54.5% of net revenues, in the prior year. On a non-GAAP basis, current year gross profit totaled $120.3 million, or 52.6% of net revenues. The current year gross profit rate was negatively affected by higher inbound and outbound freight expense, deleverage of overhead costs, and channel mix changes, partially offset by price increases.

For the six months, consolidated SG&A expense totaled $135.0 million, or 59.0% of net revenues, compared to $129.6 million, or 50.6% of net revenues, in the prior year. On a non-GAAP basis, current year consolidated SG&A expense totaled $123.4 million, or 53.9% of net revenues, compared to $128.1 million, or 50.0% of net revenues, in the prior year. As expected, Vera Bradley’s non-GAAP SG&A current year expenses were lower than the prior year primarily due to a reduction in variable-related expenses due to the lower sales volume and other cost reduction initiatives.

For the six months, the Company’s consolidated operating loss totaled ($51.1) million, or (22.3%) of net revenues, compared to consolidated operating income of $10.7 million, or 4.2% of net revenues, in the prior year six-month period. On a non-GAAP basis, the Company’s current year consolidated operating loss was ($2.9) million, or (1.2%) of net revenues, compared to consolidated operating income of $12.2 million, or 4.8% or net revenues, in the prior year.

By segment:

• Vera Bradley Direct operating income was $15.5 million, or 10.5% of Direct net revenues, compared to $34.0 million, or 20.8% of Direct net revenues, in the prior year. On a non-GAAP basis, current year Direct operating income was $21.7 million, or 14.6% of Direct net revenues.
• Vera Bradley Indirect operating income was $9.4 million, or 27.4% of Indirect net revenues, compared to $10.1 million, or 31.3% of Indirect net revenues, in the prior year. On a non-GAAP basis, current year Indirect operating income totaled $10.4 million, or 30.3% of Indirect net revenues.
• Pura Vida’s operating loss was ($27.5) million, or (59.9%) of Pura Vida net revenues, for the current year, compared to operating income of $5.7 million, or 9.5% of Pura Vida net revenues, in the prior year. On a non-GAAP basis, Pura Vida’s operating income was $4.4 million, or 9.5% of Pura Vida net revenues, compared to $7.3 million, or 12.1% of Pura Vida net revenues, in the prior year.

Balance Sheet

Net capital spending for the second quarter and six months totaled $2.7 million and $4.4 million, respectively.

Cash, cash equivalents, and investments as of July 30, 2022 totaled $38.3 million compared to $76.5 million at the end of last year’s second quarter. The Company had no borrowings on its $75 million ABL credit facility at quarter end.

Total quarter-end inventory was $179.6 million, compared to $148.0 million at the end of the second quarter last year. Current year inventory was higher than the prior year primarily due to approximately $24.0 million of additional inventory in-transit as the Company continues to navigate delays in the supply chain and ensures it has adequate inventory coverage going into the fall and holiday selling periods.

During the second quarter, the Company repurchased approximately $6.0 million of its common stock (approximately 1.0 million shares at an average price of $6.11), bringing year-to-date purchases through the end of the second quarter to approximately $16.5 million (approximately 2.4 million shares at an average price of $6.84). The Company has $29.3 million of remaining availability under its $50.0 million repurchase authorization that expires in December 2024.

Forward Outlook

Wallstrom also commented, “We expect the challenging macroeconomic environment to continue for the balance of the year and anticipate it will take additional time to return the Pura Vida ecommerce business to growth, high gas prices and other inflationary pressures will continue to impact the Vera Bradley factory channel, and there will be continued pressure on gross margin. Therefore, we believe it is appropriate to further adjust our outlook for the fiscal year.”

Excluding net revenues, all forward-looking guidance numbers referenced below are non-GAAP. The prior year SG&A and earnings per diluted share numbers exclude the previously disclosed net charges related to intangible asset amortization. Current year guidance excludes previously disclosed goodwill impairment charges, inventory adjustments, severance and other employee costs, consulting fees, store and right-of-use asset impairment charges, purchase order cancellation fees, intangible asset amortization, goodMRKT exit costs, and any similar charges.

For Fiscal 2023, the Company’s updated expectations are as follows:

• Consolidated net revenues of $480 to $490 million. Net revenues totaled $540.5 million in Fiscal 2022. Year-over-year Vera Bradley revenues are expected to decline between 7% and 9%, and Pura Vida revenues are expected to decline between 16% and 21%.
• A consolidated gross profit percentage of 53.7% to 54.1% compared to 53.3% in Fiscal 2022. The expected year-over-year increase is primarily related to incremental inbound and outbound freight expense and expected deleverage on overhead costs, more than offset by price increases.
• Consolidated SG&A expense of $246 to $250 million compared to $258.8 million in Fiscal 2022. The reduction in SG&A expense is being driven by cost reduction initiatives and a reduction in compensation expense, marketing, and other variable-related expenses due to the expected sales decline from the prior year.
• Consolidated operating income of $11.6 to $14.5 million compared to $30.1 million in Fiscal 2022.
• Consolidated diluted EPS of $0.20 to $0.28 based on diluted weighted-average shares outstanding of 31.6 million and an effective tax rate of between 24.0 and 25.0%. Diluted EPS totaled $0.57 last year.
• Net capital spending of approximately $8 to $10 million compared to $5.5 million in the prior year, reflecting investments associated with new Vera Bradley factory and Pura Vida store locations 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 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. A recast of the supplemental schedule for the current year first quarter has been provided to exclude the consulting fees related to the cost savings initiatives for consistency with the current year second quarter supplemental schedule.

Call Information

A conference call to discuss results for the second quarter is scheduled for today, Wednesday, August 31, 2022, 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 (800) 437-2398, and enter the access code 3589431. A replay will be available shortly after the conclusion of the call and remain available through September 14, 2022. To access the recording, listeners should dial (844) 512-2921, and enter the access code 3589431.

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 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, verabradley.com, 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 two 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 COVID-19 or other 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

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

 

Vera Bradley, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
	July 30, 2022				January 29, 2022				July 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	38,321			$	88,436			$	75,753
Short-term investments		–				–				727
Accounts receivable, net		25,593				20,681				29,897
Inventories		179,557				144,881				148,048
Income taxes receivable		5,113				9,391				6,289
Prepaid expenses and other current assets		16,913				15,928				15,627
Total current assets		265,497				279,317				276,341
Operating right-of-use assets		85,793				79,873				86,617
Property, plant, and equipment, net		60,305				59,941				62,350
Intangible assets, net		32,769				44,223				45,759
Goodwill		24,833				44,254				44,254
Deferred income taxes		9,276				3,857				3,294
Other assets		4,748				6,081				6,444
Total assets	$	483,221			$	517,546			$	525,059
Liabilities, Redeemable Noncontrolling Interest, and Shareholders’ Equity
Current liabilities:
Accounts payable	$	43,722			$	30,492			$	30,247
Accrued employment costs		16,018				12,463				15,465
Short-term operating lease liabilities		19,768				18,699				20,584
Other accrued liabilities		21,526				16,422				17,522
Income taxes payable		374				–				–
Total current liabilities		101,408				78,076				83,818
Long-term operating lease liabilities		84,015				80,861				87,984
Other long-term liabilities		157				195				71
Total liabilities		185,580				159,132				171,873
Redeemable noncontrolling interest		23,491				30,974				30,364
Shareholders’ equity:
Additional paid-in-capital		107,941				107,907				106,455
Retained earnings		297,623				334,364				323,431
Accumulated other comprehensive loss		(135	)			(29	)			(4	)
Treasury stock		(131,279	)			(114,802	)			(107,060	)
Total shareholders’ equity of Vera Bradley, Inc.		274,150				327,440				322,822
Total liabilities, redeemable noncontrolling interest, and shareholders’ equity	$	483,221			$	517,546			$	525,059

 

Vera Bradley, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
	Thirteen Weeks Ended							Twenty-Six Weeks Ended
	July 30, 2022				July 31, 2021			July 30, 2022				July 31, 2021
Net revenues	$	130,371			$	147,048		$	228,830			$	256,142
Cost of sales		69,854				66,687			115,799				116,617
Gross profit		60,517				80,361			113,031				139,525
Selling, general, and administrative expenses		74,042				68,729			134,956				129,625
Impairment of goodwill and intangible assets		29,338				–			29,338				–
Other income, net		42				1,016			209				789
Operating (loss) income		(42,821	)			12,648			(51,054	)			10,689
Interest expense, net		36				119			76				209
Income (loss) before income taxes		(42,857	)			12,529			(51,130	)			10,480
Income tax (benefit) expense		(5,956	)			2,672			(7,519	)			2,141
Net (loss) income		(36,901	)			9,857			(43,611	)			8,339
Less: Net (loss) income attributable to redeemable noncontrolling interest		(7,134	)			807			(6,870	)			1,434
Net (loss) income attributable to Vera Bradley, Inc.	$	(29,767	)		$	9,050		$	(36,741	)		$	6,905
Basic weighted-average shares outstanding		31,429				34,001			32,051				33,795
Diluted weighted-average shares outstanding		31,429				34,500			32,051				34,502
Basic net (loss) income per share available to Vera Bradley, Inc. common shareholders	$	(0.95	)		$	0.27		$	(1.15	)		$	0.20
Diluted net (loss) income per share available to Vera Bradley, Inc. common shareholders	$	(0.95	)		$	0.26		$	(1.15	)		$	0.20

 

Vera Bradley, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
	Twenty-Six Weeks Ended
	July 30, 2022				July 31, 2021
Cash flows from operating activities
Net (loss) income	$	(43,611	)		$	8,339
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation of property, plant, and equipment		4,371				4,514
Amortization of operating right-of-use assets		10,621				10,026
Goodwill and intangible asset impairment		29,338				–
Other impairment charges		1,351				–
Amortization of intangible assets		1,537				1,537
Provision for doubtful accounts		(119	)			26
Stock-based compensation		1,444				3,372
Deferred income taxes		(5,419	)			236
Other non-cash gain, net		–				(45	)
Changes in assets and liabilities:
Accounts receivable		(4,793	)			(2,380	)
Inventories		(34,676	)			(6,632	)
Prepaid expenses and other assets		348				2,153
Accounts payable		12,759				2,696
Income taxes		4,652				762
Operating lease liabilities, net		(12,910	)			(13,202	)
Accrued and other liabilities		7,989				5,085
Net cash (used in) provided by operating activities		(27,118	)			16,487
Cash flows from investing activities
Purchases of property, plant, and equipment		(4,391	)			(2,281	)
Proceeds from maturities and sales of investments		–				565
Proceeds from disposal of property, plant, and equipment		–				45
Net cash used in investing activities		(4,391	)			(1,671	)
Cash flows from financing activities
Tax withholdings for equity compensation		(1,410	)			(2,350	)
Repurchase of common stock		(16,477	)			–
Distributions to redeemable noncontrolling interest		(613	)			(879	)
Net cash used in financing activities		(18,500	)			(3,229	)
Effect of exchange rate changes on cash and cash equivalents		(106	)			(9	)
Net (decrease) increase in cash and cash equivalents	$	(50,115	)		$	11,578
Cash and cash equivalents, beginning of period		88,436				64,175
Cash and cash equivalents, end of period	$	38,321			$	75,753

 

Vera Bradley, Inc.
First Quarter Fiscal 2023
GAAP to Non-GAAP Reconciliation Thirteen Weeks Ended April 30, 2022
(in thousands, except per share amounts)
(unaudited)
	Thirteen Weeks Ended
	As Reported				Other Items				Non-GAAP (Excluding Items)
Gross profit	$	52,514			$	–			$	52,514
Selling, general, and administrative expenses		60,914				1,511		1		59,403
Impairment of goodwill and intangible assets		–				–				–
Operating loss		(8,233	)			(1,511	)			(6,722	)
Loss before income taxes		(8,273	)			(1,511	)			(6,762	)
Income tax benefit		(1,563	)			(375	)	2		(1,188	)
Net loss		(6,710	)			(1,136	)			(5,574	)
Less: Net income (loss) attributable to redeemable noncontrolling interest		264				(192	)			456
Net loss attributable to Vera Bradley, Inc.		(6,974	)			(944	)			(6,030	)
Diluted net loss per share available to Vera Bradley, Inc. common shareholders	$	(0.21	)		$	(0.03	)		$	(0.18	)
Vera Bradley Direct segment operating income	$	5,503			$	–			$	5,503
Vera Bradley Indirect segment operating income	$	5,479			$	–			$	5,479
Pura Vida segment operating income (loss)	$	1,056			$	(769	)	3	$	1,825
Unallocated corporate expenses	$	(20,271	)		$	(742	)	4	$	(19,529	)
1Items include $769 for the amortization of definite-lived intangible assets; $592 for a right-of-use asset impairment charge; and $150 for consulting fees associated with cost savings initiatives
2Related to the tax impact of the charges mentioned above
3Related to the amortization of definite-lived intangible assets
4Related to $592 for a right-of-use asset impairment charge and $150 for consulting fees associated with cost savings initiatives

 

Vera Bradley, Inc.
Second Quarter Fiscal 2023
GAAP to Non-GAAP Reconciliation Thirteen Weeks Ended July 30, 2022
(in thousands, except per share amounts)
(unaudited)
	Thirteen Weeks Ended
	As Reported				Other Items				Non-GAAP (Excluding Items)
Gross profit (loss)	$	60,517			$	(7,276	)	1	$	67,793
Selling, general, and administrative expenses		74,042				10,076		2		63,966
Impairment of goodwill and intangible assets		29,338				29,338				–
Operating (loss) income		(42,821	)			(46,690	)			3,869
(Loss) Income before income taxes		(42,857	)			(46,690	)			3,833
Income tax (benefit) expense		(5,956	)			(6,760	)	3		804
Net (loss) income		(36,901	)			(39,930	)			3,029
Less: Net (loss) income attributable to redeemable noncontrolling interest		(7,134	)			(7,771	)			637
Net (loss) income attributable to Vera Bradley, Inc.		(29,767	)			(32,159	)			2,392
Diluted net (loss) income per share available to Vera Bradley, Inc. common shareholders	$	(0.95	)		$	(1.02	)		$	0.08
Vera Bradley Direct segment operating income (loss)	$	10,044			$	(6,173	)	4	$	16,217
Vera Bradley Indirect segment operating income (loss)	$	3,918			$	(994	)	5	$	4,912
Pura Vida segment operating (loss) income	$	(28,534	)		$	(31,085	)	6	$	2,551
Unallocated corporate expenses	$	(28,249	)		$	(8,438	)	7	$	(19,811	)
1Items include $6,142 for inventory adjustments associated with the exit of certain technology products and the goodMRKT brand, as well as excess mask products and $1,134 for PO cancellation fees
2Items include $5,714 for severance charges; $2,755 for consulting fees associated with cost savings initiatives and CEO search; $768 for the amortization of definite-lived intangible assets; $759 for store impairment charges; and $80 for goodMRKT brand exit costs
3Related to the tax impact of the charges mentioned above, as well as goodwill and intangible asset impairment charges
4Related to $5,097 related to an allocation for certain inventory adjustments and PO cancellation fees; $759 for store impairment charges; $302 for goodMRKT brand exit costs; and $15 for severance charges
5Related to an allocation for certain inventory adjustments and PO cancellation fees
6Related to $29,338 of goodwill and intangible asset impairment charges; $963 for inventory adjustments associated with mask products; $768 for the amortization of definite-lived intangible assets; and $16 for severance charges
7Related to $5,683 for severance charges and $2,755 for consulting fees associated with cost savings initiatives and CEO search

 

Vera Bradley, Inc.
Second Quarter Fiscal 2022
GAAP to Non-GAAP Reconciliation Thirteen Weeks Ended July 31, 2021
(in thousands, except per share amounts)
(unaudited)
	Thirteen Weeks Ended
	As Reported				Other Items				Non-GAAP (Excluding Items)
Gross profit	$	80,361			$	–			$	80,361
Selling, general, and administrative expenses		68,729				768		1		67,961
Operating income (loss)		12,648				(768	)			13,416
Income (loss) before income taxes		12,529				(768	)			13,297
Income tax expense (benefit)		2,672				(130	)			2,802
Net income (loss)		9,857				(638	)			10,495
Less: Net income (loss) attributable to redeemable noncontrolling interest		807				(192	)			999
Net income (loss) attributable to Vera Bradley, Inc.		9,050				(446	)			9,496
Diluted net income (loss) per share available to Vera Bradley, Inc. common shareholders	$	0.26			$	(0.01	)		$	0.28
Vera Bradley Direct segment operating income	$	23,168			$	–			$	23,168
Vera Bradley Indirect segment operating income	$	5,601			$	–			$	5,601
Pura Vida segment operating income (loss)	$	3,226			$	(768	)	1	$	3,994
Unallocated corporate expenses	$	(19,347	)		$	–			$	(19,347	)
1Includes the amortization of definite-lived intangible assets

 

Vera Bradley, Inc.
GAAP to Non-GAAP Reconciliation Twenty-Six Weeks Ended July 30, 2022
(in thousands, except per share amounts)
(unaudited)
	Twenty-Six Weeks Ended
	As Reported				Other Items				Non-GAAP (Excluding Items)
Gross profit (loss)	$	113,031			$	(7,276	)	1	$	120,307
Selling, general, and administrative expenses		134,956				11,587		2		123,369
Impairment of goodwill and intangible assets		29,338				29,338				–
Operating loss		(51,054	)			(48,201	)			(2,853	)
Loss before income taxes		(51,130	)			(48,201	)			(2,929	)
Income tax benefit		(7,519	)			(7,135	)	3		(384	)
Net loss		(43,611	)			(41,066	)			(2,545	)
Less: Net (loss) income attributable to redeemable noncontrolling interest		(6,870	)			(7,963	)			1,093
Net loss attributable to Vera Bradley, Inc.		(36,741	)			(33,103	)			(3,638	)
Diluted net loss per share available to Vera Bradley, Inc. common shareholders	$	(1.15	)		$	(1.03	)		$	(0.11	)
Vera Bradley Direct segment operating income (loss)	$	15,547			$	(6,173	)	4	$	21,720
Vera Bradley Indirect segment operating income (loss)	$	9,397			$	(994	)	5	$	10,391
Pura Vida segment operating (loss) income	$	(27,478	)		$	(31,854	)	6	$	4,376
Unallocated corporate expenses	$	(48,520	)		$	(9,180	)	7	$	(39,340	)
1Items include $6,142 for inventory adjustments associated with the exit of certain technology products and the goodMRKT brand, as well as excess mask products and $1,134 for PO cancellation fees
2Items include $5,714 for severance charges; $2,905 for consulting fees associated with cost savings initiatives and CEO search; $1,537 for the amortization of definite-lived intangible assets; $1,351 for store and right-of-use asset impairment charges; and $80 for goodMRKT brand exit costs
3Related to the tax impact of the charges mentioned above, as well as goodwill and intangible asset impairment charges
4Related to $5,097 related to an allocation for certain inventory adjustments and PO cancellation fees; $759 for store impairment charges; $302 for goodMRKT brand exit costs; and $15 for severance charges
5Related to an allocation for certain inventory adjustments and PO cancellation fees
6Related to $29,338 of goodwill and intangible asset impairment charges; $963 for inventory adjustments associated with mask products; $1,537 for the amortization of definite-lived intangible assets; and $16 for severance charges
7Related to $5,683 for severance charges; $2,905 for consulting fees associated with cost savings initiatives and CEO search; and $592 for a right-of-use asset impairment charge

 

Vera Bradley, Inc.
GAAP to Non-GAAP Reconciliation Twenty-Six Weeks Ended July 31, 2021
(in thousands, except per share amounts)
(unaudited)
	Twenty-Six Weeks Ended
	As Reported				Other Items				Non-GAAP (Excluding Items)
Gross profit	$	139,525			$	–			$	139,525
Selling, general, and administrative expenses		129,625				1,537		1		128,088
Operating income (loss)		10,689				(1,537	)			12,226
Income (loss) before income taxes		10,480				(1,537	)			12,017
Income tax expense (benefit)		2,141				(293	)			2,434
Net income (loss)		8,339				(1,244	)			9,583
Less: Net income (loss) attributable to redeemable noncontrolling interest		1,434				(384	)			1,818
Net income (loss) attributable to Vera Bradley, Inc.		6,905				(860	)			7,765
Diluted net income (loss) per share available to Vera Bradley, Inc. common shareholders	$	0.20			$	(0.02	)		$	0.23
Vera Bradley Direct segment operating income	$	34,028			$	–			$	34,028
Vera Bradley Indirect segment operating income	$	10,062			$	–			$	10,062
Pura Vida segment operating income (loss)	$	5,734			$	(1,537	)	1	$	7,271
Unallocated corporate expenses	$	(39,135	)		$	–			$	(39,135	)
1Includes the amortization of definite-lived intangible assets