Tag: Consumer

Vera Bradley (VRA) – Reports Fourth Quarter Results

Posted on by cpereira@noblefcm.com


Friday, March 15, 2024

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , 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.

4QFY24. Revenue totaled $133.3 million, compared to $147.1 million in 4Q23, and below our estimate of $137 million. Gross margin improved to 52.3% from 40.8%. Reported net loss of $1.9 million, or $0.06/sh, compared to a net loss of $28.2 million, or $0.91/sh in 4Q22. Adjusted EPS was $0.11 versus a net loss of $0.03/sh last year. This year’s extra week added approximately $6 million to quarterly revenue and EPS by $0.01/sh. We had forecasted net income of $5 million, or $0.16/sh.

New Day. Project New Day launches in mid-July and is the first manifestation of the work under Project Restoration. New Day is a full pivot from where Vera Bradley is today. It includes, among other things, the reveal of a new and elevated full line branding and marketing, product store design, and website design.


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Release – Vera Bradley Announces Fourth Quarter and Fiscal Year 2024 Results

Posted on by aweinsoff@channelchek.com

Research News and Market Data on VRA

Mar 13, 2024

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

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

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

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

Management provides guidance for fiscal year ending February 1, 2025

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

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

Fourth Quarter and Fiscal Year-End Comments

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

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

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

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

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

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

Update on Project Restoration and Looking Ahead

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

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

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

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

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

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

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

Summary of Financial Performance for the Fourth Quarter

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

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

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

Summary of Financial Performance for the Fiscal Year

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

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

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

Fourth Quarter Details

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

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

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

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

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

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

By segment:

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

Details for the Fiscal Year

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

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

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

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

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

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

By segment:

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

Balance Sheet

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

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

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

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

Forward Outlook

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

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

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

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

53rd Week

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

Non-GAAP Numbers

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

Disclosure Regarding Non-GAAP Measures

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

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

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

Adjustments to Prior Year Non-GAAP Numbers

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

Call Information

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

About Vera Bradley, Inc.

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

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

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

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

Website Information

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

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

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

CONTACTS:
Investors:
Julia Bentley
jbentley@verabradley.com

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

View full release here.

FAT Brands (FAT) – Reports Fourth Quarter Results

Posted on by cpereira@noblefcm.com


Monday, March 11, 2024

FAT Brands (NASDAQ: FAT) is a leading global franchising company that strategically acquires, markets, and develops fast casual, quick-service, casual dining, and polished casual dining concepts around the world. The Company currently owns 17 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli’s, Twin Peaks, Great American Cookies, Hot Dog on a Stick, Buffalo’s Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses, and franchises and owns over 2,300 units worldwide. For more information on FAT Brands, please visit www.fatbrands.com.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , 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.

4Q23 Results. FAT Brands reported 4Q23 revenue of $158.6 million, up 52.8% y-o-y, driven by the Smokey Bones acquisition. System-wide sales growth was 16.5%. FAT reported adjusted EBITDA of $27 million in the quarter, compared to $19.6 million in 4Q23. Net loss for the quarter was $26.2 million, or $1.68/sh, compared to a net loss of $70.8 million, or $4.39/sh last year. Adjusted net loss for the quarter was $17.3 million, or $1.15/sh, compared to a net loss of $43 million, or a loss of $2.70/sh, last year. We had projected revenue of $150 million and a net loss of $25.9 million, or a loss of $1.55/sh.

New Locations. During the quarter, FAT Brands saw 29 store openings, bringing the full year count to 125 locations, somewhat below the original expectation of 150 new locations. Management expects another 125+ new openings in 2024. The current 1,100 store pipeline will add some $60 million of adjusted EBITDA once built out.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

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. 

Xcel Brands (XELB) – Updates Investors With Preliminary Q4 Results

Posted on by cpereira@noblefcm.com


Friday, March 08, 2024

Xcel Brands, Inc. 1333 Broadway 10th Floor New York, NY 10018 United States https:/Sector(s): Consumer Cyclical Industry: Apparel Manufacturing Full Time Employees: 84 Key Executives Name Title Pay Exercised Year Born Mr. Robert W. D’Loren Chairman, Pres & CEO 1.27M N/A 1958 Mr. James F. Haran CFO, Principal Financial & Accou

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.

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

Provides preliminary Q4 estimates. The company provided Q4 revenue and adj. EBITDA preliminary estimates that are slightly below our expectations. The preliminary revenue estimate was $2.13 million versus our estimate of $2.80 million. In addition, the adj. EBITDA preliminary estimate of a loss of $1.07 million was somewhat higher than our loss estimate of $451,000. 

Preliminary full year results. Total company revenue for 2023 is expected to be $17.7 million and EBITDA of $5.1 million. The preliminary results are slightly below our $18.5 million and loss of $5.4 million, respectively.  


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

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. 

QuantaSing Group Limited (QSG) – Quietly Executing Its Growth Strategy

Posted on by cpereira@noblefcm.com


Friday, March 08, 2024

QuantaSing is a leading online service provider in China dedicated to improving people’s quality of life and well-being by providing lifelong personal learning and development opportunities. The Company is the largest service provider in China’s online adult learning market and China’s adult personal interest learning market in terms of revenue, according to a report by Frost & Sullivan based on data from 2022. By leveraging its proprietary tools and technology, QuantaSing offers easy-to-understand, affordable, and accessible online courses to adult learners under a variety of brands, including QiNiu, JiangZhen and QianChi, empowering users to pursue personal development. Leveraging its extensive experience in individual online learning services, the Company has also expanded its services to corporate clients including, among others, marketing services and enterprise talent management services.

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Patrick McCann, CFA, Research Analyst, Noble Capital Markets, Inc.

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

Strong results. The company reported strong fiscal Q2 revenue and adj. EBITDA for the period ended December 31. Revenue of RMB980.5 million and adj. EBITDA of RMB 98.6 million outperformed our estimates of RMB 930.0 million and RMB 83.0 million, respectively.

User growth. Total registered users grew roughly 45% to 112.4 million users, up from 77.8 million users at the end of the prior year period. Total paying learner grew to 0.4 million, up 24% from the prior year period.  


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

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. 

Release – FAT Brands Inc. Reports Fiscal Fourth Quarter and Full Fiscal Year 2023 Financial Results

Posted on by aweinsoff@channelchek.com

Research News and Market Data on FAT

03/07/2024

Download(opens in new window)

Conference call and webcast today at 5:00 p.m. ET

LOS ANGELES, March 07, 2024 (GLOBE NEWSWIRE) — FAT (Fresh. Authentic. Tasty.) Brands Inc. (NASDAQ: FAT) (“FAT Brands” or the “Company”) today reported fiscal fourth quarter and full fiscal year 2023 financial results for the fiscal year ended December 31, 2023.

“With the acquisition of Smokey Bones early in the fourth quarter, we have grown the FAT Brands portfolio to 18 iconic restaurant brands with annualized system wide sales of $2.5 billion,” said Andy Wiederhorn, Chairman of FAT Brands. “We opened 125 restaurants in 2023, including 29 in the fourth quarter. We are seeing strong franchisee interest in development opportunities, having signed more than 225 development agreements in 2023, bringing our total pipeline to 1,100 units. This represents the potential for over 50% EBITDA growth over the next several years.”

Ken Kuick, Co-Chief Executive Officer of FAT Brands, commented, “While franchise interest remains high across all of our brands, we continue to be focused on the expansion of Twin Peaks. This year we opened 14 new lodges and ended the year with 109 lodges, a 33% increase since acquiring the brand in 2021. Our growth pipeline includes 113 lodges and Smokey Bones’ healthy real estate portfolio provides us with the opportunity to convert locations into Twin Peaks lodges, with the potential to significantly accelerate the growth of the brand.”

Rob Rosen, Co-Chief Executive Officer of FAT Brands, concluded, “We believe there are significant opportunities on the horizon for FAT Brands. Our seasoned leadership and strong brand management platform allow us to efficiently integrate new brands while maintaining a healthy and evolving pipeline for organic growth. These strengths position us for continued growth in the future, which will help deleverage our balance sheet.”

Fiscal Fourth Quarter 2023 Highlights

  • Total revenue improved 52.8% to $158.6 million compared to $103.8 million in the fourth quarter of 2022
    • System-wide sales growth of 16.5% in the fiscal fourth quarter of 2023 compared to the prior year fiscal quarter
    • System-wide same-store sales declined 0.6% in the fiscal fourth quarter of 2023 compared to the prior fiscal year
    • 29 new store openings during the fiscal fourth quarter of 2023
  • Loss from operations of $3.1 million compared to $32.6 million in the fiscal fourth quarter of 2022
  • Net loss of $26.2 million, or $1.68 per diluted share, compared to $70.8 million, or $4.39 per diluted share, in the fiscal fourth quarter of 2022
  • Adjusted EBITDA(1) of $27.0 million compared to $19.6 million in the fiscal fourth quarter of 2022
  • Adjusted net loss(1) of $17.3 million, or $1.15 per diluted share, compared to $43.0 million, or $2.70 per diluted share, in the fiscal fourth quarter of 2022

Fiscal Year 2023 Highlights

  • Total revenue increased 18.0% to $480.5 million compared to $407.2 million in fiscal 2022
    • System-wide sales growth of 6.9% compared to fiscal 2022
    • System-wide same-store sales growth of 0.8% in fiscal 2023 compared to fiscal 2022
    • 125 new store openings during fiscal 2023
  • Income from operations of $22.3 million compared to loss from operations of $17.9 million in the fiscal quarter of 2022
  • Net loss of $90.1 million, or $5.85 per diluted share, compared to $126.2 million, or $8.06 per diluted share, in fiscal 2022
  • Adjusted EBITDA(1) of $91.2 million compared to $88.8 million in fiscal 2022
  • Adjusted net loss(1) of $56.5 million, or $3.83 per diluted share, compared to $80.9 million, or $5.32 per diluted share, in fiscal 2022

(1) EBITDA, adjusted EBITDA and adjusted net loss are non-GAAP measures defined below, under “Non-GAAP Measures”. Reconciliation of GAAP net loss to EBITDA, adjusted EBITDA and adjusted net loss are included in the accompanying financial tables.

Summary of Fourth Quarter 2023 Financial Results

Total revenue increased $54.8 million, or 52.8%, in the fiscal fourth quarter of 2023, to $158.6 million compared to $103.8 million in the same fiscal period of 2022, driven by a 10.4% increase in royalties, an 80.5% increase in company-owned restaurant revenues driven by new restaurant openings and the acquisition of Smokey Bones during the fourth quarter of 2023 and a 10.0% increase in revenues from our manufacturing facility.

Costs and expenses consist of general and administrative expense, cost of restaurant and factory revenues, depreciation and amortization, refranchising net losses and advertising fees. Costs and expenses increased $25.4 million, or 18.6%, in the fiscal fourth quarter of 2023 to $161.8 million compared to $136.4 million in the same fiscal period in the prior fiscal year.

General and administrative expense decreased $8.8 million, or 22.6%, in the fiscal fourth quarter of 2023 compared to the same fiscal period in the prior fiscal year, primarily due to a $16.6 million non-cash reserve on claimed Employee Retention Credits recorded during the fourth quarter of 2022 and the recognition of $3.4 million related to Employee Retention Credits during the fiscal fourth quarter of 2023, partially offset by the acquisition of Smokey Bones in the fourth quarter of 2023 and higher professional fees related to certain litigation matters.

Cost of restaurant and factory revenues was related to the operations of the company-owned restaurant locations and our dough factory and increased $43.4 million, or 70.3%, in the fiscal fourth quarter of 2023 to $105.1 million, compared to the prior year quarter, primarily due to the acquisition of Smokey Bones in the fourth quarter of 2023.

Depreciation and amortization increased $3.0 million, or 42.9% in the fiscal fourth quarter of 2023 compared to the same fiscal period in the prior fiscal year, primarily due to the acquisition of Smokey Bones in the fourth quarter of 2023 and depreciation of new property and equipment at company-owned restaurant locations.

Refranchising losses in the fiscal fourth quarter of 2023 and 2022 were $2.1 million and $3.1 million, respectively, and were comprised of restaurant costs and expenses, net of food sales.

Advertising expenses increased $2.2 million in the fiscal fourth quarter of 2023 compared to the prior fiscal year period. These expenses vary in relation to advertising revenues.

Total other expense, net for the fiscal fourth quarters of 2023 and 2022 was $31.9 million and $24.2 million, respectively, primarily comprised of net interest expense of $33.3 million and $25.6 million, respectively.

Adjusted net loss was $17.3 million, or $1.15 per diluted share, in the fiscal fourth quarter of 2023 compared to $43.0 million, or $2.70 per diluted share, in the fiscal fourth quarter of 2022.

Key Financial Definitions

New store openings – The number of new store openings reflects the number of stores opened during a particular reporting period. The total number of new stores per reporting period and the timing of stores openings has, and will continue to have, an impact on our results.

Same-store sales growth – Same-store sales growth reflects the change in year-over-year sales for the comparable store base, which we define as the number of stores open and in the FAT Brands system for at least one full fiscal year. For stores that were temporarily closed, sales in the current and prior period are adjusted accordingly. Given our focused marketing efforts and public excitement surrounding each opening, new stores often experience an initial start-up period with considerably higher than average sales volumes, which subsequently decrease to stabilized levels after three to six months. Additionally, when we acquire a brand, it may take several months to integrate fully each location of said brand into the FAT Brands platform. Thus, we do not include stores in the comparable base until they have been open and in the FAT Brands system for at least one full fiscal year.

System-wide sales growth – System wide sales growth reflects the percentage change in sales in any given fiscal period compared to the prior fiscal period for all stores in that brand only when the brand is owned by FAT Brands. Because of acquisitions, new store openings and store closures, the stores open throughout both fiscal periods being compared may be different from period to period.

Conference Call and Webcast

FAT Brands will host a conference call and webcast to discuss its fiscal fourth quarter 2023 financial results today at 5:00 PM ET. Hosting the conference call and webcast will be Andy Wiederhorn, Chairman of the Board, and Ken Kuick, Co-Chief Executive Officer and Chief Financial Officer.

The conference call can be accessed live over the phone by dialing 1-844-826-3035 from the U.S. or 1-412-317-5195 internationally. A replay will be available after the call until Thursday, March 28, 2024, and can be accessed by dialing 1-844-512-2921 from the U.S. or 1-412-317-6671 internationally. The passcode is 10186678. The webcast will be available at www.fatbrands.com under the “Investors” section and will be archived on the site shortly after the call has concluded.

About FAT (Fresh. Authentic. Tasty.) Brands

FAT Brands (NASDAQ: FAT) is a leading global franchising company that strategically acquires, markets, and develops fast casual, quick-service, casual dining, and polished casual dining concepts around the world. The Company currently owns 18 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli’s, Twin Peaks, Smokey Bones, Great American Cookies, Hot Dog on a Stick, Buffalo’s Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses and franchises and owns approximately 2,300 units worldwide. For more information, please visit www.fatbrands.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the future financial and operating results of the Company, estimates of future EBITDA, the timing and performance of new store openings, future reductions in cost of capital and leverage ratio, our ability to conduct future accretive acquisitions and our pipeline of new store locations. Forward-looking statements generally use words such as “expect,” “foresee,” “anticipate,” “believe,” “project,” “should,” “estimate,” “will,” “plans,” “forecast,” and similar expressions, and reflect our expectations concerning the future. Forward-looking statements are subject to significant business, economic and competitive risks, uncertainties and contingencies, many of which are difficult to predict and beyond our control, which could cause our actual results to differ materially from the results expressed or implied in such forward-looking statements. We refer you to the documents that we file from time to time with the Securities and Exchange Commission, such as our reports on Form 10-K, Form 10-Q and Form 8-K, for a discussion of these and other risks and uncertainties that could cause our actual results to differ materially from our current expectations and from the forward-looking statements contained in this press release. We undertake no obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of this press release.

Non-GAAP Measures (Unaudited)

This press release includes the non-GAAP financial measures of EBITDA, adjusted EBITDA and adjusted net loss.

EBITDA is defined as earnings before interest, taxes, and depreciation and amortization. We use the term EBITDA, as opposed to income from operations, as it is widely used by analysts, investors, and other interested parties to evaluate companies in our industry. We believe that EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. EBITDA is not a measure of our financial performance or liquidity that is determined in accordance with generally accepted accounting principles (“GAAP”), and should not be considered as an alternative to net loss as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP.

Adjusted EBITDA is defined as EBITDA (as defined above), excluding expenses related to acquisitions, refranchising losses, impairment charges, and certain non-recurring or non-cash items that the Company does not believe directly reflect its core operations and may not be indicative of the Company’s recurring business operations.

Adjusted net loss is a supplemental measure of financial performance that is not required by or presented in accordance with GAAP. Adjusted net loss is defined as net loss plus the impact of adjustments and the tax effects of such adjustments. Adjusted net loss is presented because we believe it helps convey supplemental information to investors regarding our performance, excluding the impact of special items that affect the comparability of results in past quarters to expected results in future quarters. Adjusted net loss as presented may not be comparable to other similarly titled measures of other companies, and our presentation of adjusted net loss should not be construed as an inference that our future results will be unaffected by excluded or unusual items. Our management uses this non-GAAP financial measure to analyze changes in our underlying business from quarter to quarter based on comparable financial results.

Reconciliations of net loss presented in accordance with GAAP to EBITDA, adjusted EBITDA and adjusted net loss are set forth in the tables below.

Investor Relations:

ICR
Michelle Michalski
ir-fatbrands@icrinc.com
646-277-1224

Media Relations:

Erin Mandzik
emandzik@fatbrands.com
860-212-6509

View full release here.

Source: FAT Brands Inc.

Commercial Vehicle Group (CVGI) – Fourth Quarter Post Call Commentary

Posted on by cpereira@noblefcm.com


Thursday, March 07, 2024

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , 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.

Impact of UAW Strike on 4Q. Fourth quarter results were negatively impacted by a work stoppage at a customer facility due to the UAW strike. Management estimated the strike reduced revenue by about $12 million and had a $0.05/sh negative impact on EPS. We expect that eventually the revenue will come back, it is just a question of timing.

New Wins. CVG recorded in excess of $150 million of new wins in 2023 on a fully ramped basis, continuing the Company’s strong track record of success. The wins continue to be focused within the Electrical Systems segment and support the product ramp-up at the new plants in Mexico and Morocco, which are focused on meeting the demand growth in electrical systems. CVG is currently expanding its Morocco footprint with an additional new plant under construction.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

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. 

Release – FAT Brands to Announce Fourth Quarter and Fiscal Year 2023 Financial Results On March 7, 2024

Posted on by aweinsoff@channelchek.com

Research News and Market Data on FAT

03/04/2024

LOS ANGELES, March 04, 2024 (GLOBE NEWSWIRE) — FAT (Fresh. Authentic. Tasty.) Brands Inc. (NASDAQ: FAT) (“FAT Brands” or the “Company”), a leading global franchising company and parent company of iconic brands including Round Table Pizza, Fatburger, Johnny Rockets, Twin Peaks, Fazoli’s and 13 other restaurant concepts, today announced that the Company will host a conference call to review its fourth quarter and fiscal year 2023 financial results on Thursday, March 7, 2024 at 5:00 PM ET. A press release with fourth quarter and fiscal year 2023 financial results will be issued prior to the conference call that day.

The conference call can be accessed live over the phone by dialing 1-844-826-3035 from the U.S. or 1-412-317-5195 internationally. A replay will be available after the call until Thursday, March 28, 2024, and can be accessed by dialing 1-844-512-2921 from the U.S. or 1-412-317-6671 internationally. The passcode is 10186678. Hosting the call will be Andy Wiederhorn, Chairman, and Ken Kuick, Co-Chief Executive Officer and Chief Financial Officer.

The conference call will also be webcast live from the corporate website at www.fatbrands.com, under the “Investors” section. A replay of the webcast will be available through the corporate website shortly after the call has concluded.

About FAT (Fresh. Authentic. Tasty.) Brands

FAT Brands (NASDAQ: FAT) is a leading global franchising company that strategically acquires, markets, and develops fast casual, quick-service, casual dining, and polished casual dining concepts around the world. The Company currently owns 18 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli’s, Twin Peaks, Great American Cookies, Smokey Bones, Hot Dog on a Stick, Buffalo’s Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses, and franchises and owns over 2,300 units worldwide. For more information on FAT Brands, please visit www.fatbrands.com.

Investor Relations:
ICR
Michelle Michalski
IR-FATBrands@icrinc.com
646-277-1224

Media Relations:
Erin Mandzik
emandzik@fatbrands.com
860-212-6509

Source: FAT Brands Inc.

Commercial Vehicle Group (CVGI) – First Look: Fourth Quarter Results

Posted on by cpereira@noblefcm.com


Tuesday, March 05, 2024

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , 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.

4Q23 Results. Driven by a number of factors, including a strike at a customer plant, revenue was down 5.0% y-o-y to $223.1 million. We had estimated $230 million. Adjusted EBITDA came in at $10.3 million, down $2.9 million y-o-y and below our $13 million forecast. Impacted by a favorable tax benefit, 4Q23 GAAP net income was $23.3 million, or $0.70/sh, compared to GAAP net loss of $32 million, or a loss of $0.98/sh. Adjusted 4Q23 net income was $2.9 million, or $0.09/sh, compared to $1.4 million, or $0.04/sh last year. We had forecast net income of $4.4 million, or $0.13/sh.

Segments. Electrical Systems remained the star performer with revenue increasing 19.4% to $56.2 million and adjusted operating income up 25% to $6.7 million. Vehicle Solutions revenue down 10.1% to $128.4 million, with adjusted operating income down 3.9% to $4 million. Aftermarket revenue of $31.4 million was off 8.1%, while adjusted operating income declined 6.4% to $3.4 million. Industrial Automation revenue of $7.1 million declined 35%, while adjusted operating income was $0.3 million.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

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. 

The ODP Corporation (ODP) – Efficiency is the Key

Posted on by cpereira@noblefcm.com


Thursday, February 29, 2024

Office Depot, Inc., together with its subsidiaries, supplies a range of office products and services. It offers merchandise, such as general office supplies, computer supplies, business machines and related supplies, and office furniture through its chain of office supply stores under the Office Depot, Foray, Ativa, Break Escapes, Worklife, and Christopher Lowell brand names. The company also provides graphic design, printing, reproduction, mailing, shipping, and other services through design, print, and ship centers. It has operations throughout North America, Europe, Asia, and Central America. The company also sells its products and services through direct mail catalogs, contract sales force, Internet sites, and retail stores, through a mix of company-owned operations, joint ventures, licensing and franchise agreements, alliances, and other arrangements. As of December 31, 2008, Office Depot operated 1,267 North American retail division office supply stores and 162 international division retail stores, as well as participated under licensing and merchandise arrangements in 98 stores. The company was founded in 1986 and is based in Boca Raton, Florida.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , 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.

4Q Results. Total sales were $1.8 billion, down 14% from last year or 9% excluding the 53rd week in 2022 that wasn’t repeated in 2023, driven by store closures, and a continued challenging economic environment. We had revenue of $1.85 billion. Adjusted net income was $35 million, or $0.92 per diluted share, compared to $40 million, or $0.85 per diluted share, in the fourth quarter of 2022. Adjusted EBITDA was $73 million compared to $89 million in the prior year.

Cost Savings Initiative. Project Core is the new plan to create more efficiencies in ODP’s low cost model, in which management expects the plan to realize annualized savings of $50-$60 million when fully implemented. Management expects the plan to take effect in Q2 of 2024. We are optimistic that management can fully implement the strategy into its model, with cost savings already being an important factor in management’s operating philosophy.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

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. 

Release – The ODP Corporation Announces Fourth Quarter and Full Year 2023 Results

Posted on by aweinsoff@channelchek.com

Research News and Market Data on ODP

PDF Version

Low-Cost Business Model and Disciplined Capital Allocation Drive Solid Operating Performance and Strong Adjusted EPS Growth in 2023

Repurchased 6 Million Shares for $298 Million in Full Year 2023

Announces “Project Core”: Enterprise-Wide Program Focused on Streamlining Operations and Enhancing Focus on Core Business

Approves New $1 Billion Share Repurchase Authorization

Provides 2024 Guidance

BOCA RATON, Fla.–(BUSINESS WIRE)–Feb. 28, 2024– The ODP Corporation (“ODP,” or the “Company”) (NASDAQ:ODP), a leading provider of products, services, and technology solutions to businesses and consumers, today announced results for the fourth quarter and full year ended December 30, 2023.

Consolidated (in millions, except per share amounts)4Q234Q22FY23FY22
Selected GAAP and Non-GAAP measures:    
Sales$1,806$2,106$7,831$8,491
Sales change from prior year period(14)% (8)% 
Operating income (loss)$(31)$55$201$243
Adjusted operating income (1)$43$58$290$296
Net income (loss) from continuing operations$(37)$36$139$178
Diluted earnings (loss) per share from continuing operations$(0.99)$0.76$3.50$3.61
Adjusted net income from continuing operations (1)$35$40$223$216
Adjusted earnings per share from continuing operations
(fully diluted) (1)		$0.92$0.85$5.60$4.40
Adjusted EBITDA (1)$73$89$417$437
Operating Cash Flow from continuing operations$70$158$331$237
Free Cash Flow (2)$41$127$224$138
Adjusted Free Cash Flow (3)$43$147$235$201

Fourth Quarter 2023 Summary(1)(2)(3)

  • Total reported sales of $1.8 billion, down 14% versus the prior year on a reported basis, or down 9% when eliminating the $128 million favorable impact related to the 53rd week included in the fourth quarter of 2022. The decrease in reported sales is largely related to lower sales in its Office Depot consumer division, primarily due to 64 fewer retail locations in service compared to the previous year, as well as reduced retail and online consumer traffic and transactions
  • GAAP operating loss includes non-cash asset impairment charges of $68 million related to goodwill at Varis, which led to a GAAP operating loss of $31 million and net loss from continuing operations of $37 million, or $(0.99) per diluted share. This result compares to GAAP operating income of $55 million and net income from continuing operations of $36 million, or $0.76 per diluted share, in the prior year. GAAP operating income results in the prior year period included the favorable impact related to the 53rd week of $20 million
  • Adjusted operating income of $43 million, compared to $58 million in the fourth quarter of 2022; adjusted EBITDA of $73 million, compared to $89 million in the fourth quarter of 2022
  • Adjusted net income from continuing operations of $35 million, or adjusted diluted earnings per share from continuing operations of $0.92, versus $40 million or $0.85, respectively, in the prior year period
  • Operating cash flow from continuing operations of $70 million and adjusted free cash flow of $43 million, versus $158 million and $147 million, respectively, in the prior year period
  • Repurchased 672 thousand shares at a cost of $32 million in the fourth quarter of 2023
  • $1.1 billion of total available liquidity including $392 million in cash and cash equivalents at quarter end

Full Year 2023 Summary

  • Total reported sales of $7.8 billion, versus $8.5 billion in the prior year. Consolidated sales results in the prior year included the favorable impact related to the 53rd week in 2022 of $128 million
  • GAAP operating income of $201 million and net income from continuing operations of $139 million, or $3.50 per diluted share, versus $243 million and net income from continuing operations of $178 million, or $3.61 per diluted share, respectively, in the prior year. Operating income results in the prior year include the favorable impact related to the 53rd week in 2022 of $20 million
  • Adjusted operating income of $290 million, compared to $296 million in 2022; adjusted EBITDA of $417 million, compared to $437 million in 2022
  • Adjusted net income from continuing operations of $223 million, or adjusted diluted earnings per share from continuing operations of $5.60, versus $216 million or $4.40, respectively, in the prior year
  • Operating cash flow from continuing operations of $331 million and adjusted free cash flow of $235 million, versus $237 million and $201 million, respectively in the prior year
  • Repurchased 6 million shares for $298 million in 2023

“In the first year of operating under our new structure, we delivered strong adjusted EBITDA and adjusted earnings per share results throughout an ongoing challenging macroeconomic environment, underscoring our commitment to our low-cost business model and capital allocation strategy,” said Gerry Smith, chief executive officer of The ODP Corporation. “We expanded margins at ODP Business Solutions, drove strong external EBITDA growth at Veyer, expanded our product and service offerings at Office Depot, and began our strategic review of Varis in late Q4. In addition, our operational excellence helped drive free cash flow above our forecasted guidance, supporting our return to shareholders of nearly $300 million through our share repurchase program during 2023.”

“As we continue to evolve and consistent with our low-cost model approach, we are announcing today “Project Core” — a comprehensive initiative aimed at streamlining operations, sharpening our focus on our core business, and increasing shareholder returns through an expanded new $1 billion share repurchase program,” Smith continued. “We expect this broad-based plan to generate annualized savings in the range of $50 million to $60 million when fully implemented, achieved through cost efficiency measures across the entire enterprise including all routes to market, including Varis, as well as corporate support functions, leading to further optimization of our organization and supporting future profitable growth. During this effort, we are working to complete a strategic review of Varis and we expect to provide a full update of that review by our first quarter earnings call in early May 2024,” Smith added.

“We’re excited about the future and confident in our position of strength, as we focus on continuing to drive our low-cost business model, leveraging our multiple routes to market, and remaining disciplined with our capital allocation plan,” Smith concluded.

Consolidated Results

Reported (GAAP) Results

Total reported sales for the fourth quarter of 2023 were $1.8 billion, a decrease of 14% compared with the same period last year, or down 9% when eliminating the $128 million favorable impact related to the 53rd week included in the fourth quarter of 2022. This result was driven primarily by lower sales in its consumer division, Office Depot, primarily due to 64 fewer stores in service compared to last year related to planned store closures, as well as lower retail and online consumer traffic and transactions. Sales at ODP Business Solutions Division were down slightly compared to last year when eliminating the favorable impact to sales from the 53rd week included in the fourth quarter of last year, largely driven by weaker economic activity and lower sales of personal protective equipment (PPE) and technology products. Meanwhile, Veyer provided strong logistics support for the ODP Business Solutions and Office Depot Divisions and continued to capture additional sales for its supply chain and procurement solutions among other third-party customers.

The Company reported a GAAP operating loss of $31 million in the fourth quarter of 2023, down compared to GAAP operating income of $55 million in the prior year period. Operating results in the fourth quarter of 2023 included $74 million of charges, primarily related to a $68 million non-cash impairment of goodwill in its Varis business unit. Net loss from continuing operations was $37 million, or $(0.99) per diluted share in the fourth quarter of 2023, down compared to net income from continuing operations of $36 million, or $0.76 per diluted share in the fourth quarter of 2022.

Adjusted (non-GAAP) Results(1)

Adjusted results for the fourth quarter of 2023 exclude charges and credits totaling $74 million as described above and the associated tax impacts.

  • Fourth quarter of 2023 adjusted EBITDA was $73 million compared to $89 million in the prior year period. This included depreciation and amortization of $28 million and $31 million in the fourth quarters of 2023 and 2022, respectively
  • Fourth quarter of 2023 adjusted operating income was $43 million, down compared to $58 million in the fourth quarter of 2022
  • Fourth quarter of 2023 adjusted net income from continuing operations was $35 million, or $0.92 per diluted share, compared to $40 million, or $0.85 per diluted share, in the fourth quarter of 2022, an increase of 8% on a per share basis

Division Results

ODP Business Solutions Division

Leading B2B distribution solutions provider serving small, medium and enterprise level companies with an annual trailing-twelve-month revenue of nearly $4 billion.

  • Reported sales were $0.9 billion in the fourth quarter of 2023, down 10% compared to the same period last year, or down 4% when eliminating the $58 million favorable impact to sales related to the 53rd week included in the fourth quarter of 2022. The decrease in sales was related primarily to weaker macroeconomic conditions and lower sales of PPE and technology products
  • Total adjacency category sales, including cleaning and breakroom, furniture, technology, and copy and print, were 44% of total ODP Business Solutions’ sales
  • Continued strong pipeline and net new business customer additions
  • Operating income was $34 million in the fourth quarter of 2023, down 8% compared to the same period last year on a reported basis. When eliminating the $5 million favorable impact to operating income related to the 53rd week included in the fourth quarter of 2022, operating income was up approximately 6% over last year. As a percentage of sales, operating income margin was 4%, flat compared to last year

Office Depot Division

Leading provider of retail consumer and small business products and services distributed via Office Depot and OfficeMax retail locations and an award-winning eCommerce presence.

  • Reported sales were $0.9 billion in the fourth quarter of 2023, down 18% compared to the prior year on a reported basis, or down 13% when eliminating the favorable impact of $70 million in sales related to the 53rd week included in same period last year. Lower sales were partially driven by 64 fewer retail outlets in service associated with planned store closures, as well as lower demand relative to last year in certain product categories and lower online sales. The Company closed 22 retail stores in the quarter and had 916 stores at quarter end. Sales were down approximately 5% on a comparable store basis when eliminating the favorable impact of the 53rd week included in the prior year period
  • Stronger sales of copy and print services were more than offset by lower sales in supplies, technology, and other categories
  • Store and online traffic were lower year over year due to a greater percentage of customers having returned to the office post pandemic, as well as weaker macroeconomic activity
  • Operating income was $43 million in the fourth quarter of 2023, compared to operating income of $57 million during the same period last year, driven primarily by the flow through impact from lower sales. Operating income results in the prior year period included a $15 million favorable impact related to the 53rd week in in 2022. As a percentage of sales, operating income was 5%, flat compared to the same period last year

Veyer Division

Nationwide supply chain, distribution, procurement and global sourcing operation supporting Office Depot and ODP Business Solutions, as well as third-party customers. Veyer’s assets and capabilities include 8 million square feet of infrastructure through a network of distribution centers, cross-docks, and other facilities throughout the United States; a global sourcing presence in Asia; a large private fleet of vehicles; and next-day delivery to 98.5% of US population.

  • In the fourth quarter of 2023, Veyer provided strong support for its internal customers, ODP Business Solutions and Office Depot, as well as its third-party customers, generating sales of $1.2 billion
  • Operating income was $3 million in the fourth quarter of 2023, compared to $4 million in the prior year period driven by the flow through impact of lower sales to internal customers partially offset by higher sales of services to external third-party customers
  • For the full year 2023, sales and EBITDA generated from third party customers increased 25% and 120% respectively, resulting in sales of $35 million and EBITDA of $11 million

Varis Division

Tech-enabled B2B indirect procurement marketplace launched in the fourth quarter of 2022, which provides buyers and suppliers a seamless way to transact through the platform’s consumer-like buying experience and advanced spend management tools.

  • Continued work with new customers, incorporating feedback and adding new features and capabilities to the platform
  • Generated revenues in the fourth quarter of 2023 of $2 million, flat compared to the fourth quarter of 2022
  • Operating loss was $15 million in the fourth quarter of 2023, an improvement over the prior year

Share Repurchases in 2023

Throughout the year, the Company continued to execute under its previously announced $1 billion share repurchase authorization valid through year-end 2025. During the fourth quarter of 2023, the Company repurchased 672 thousand shares at a cost of $32 million, resulting in a total of 6 million shares for $298 million for the full year 2023. Since the inception of the authorization beginning in November 2022, the Company has repurchased 10 million shares for approximately $451 million.

“We’re encouraged by the opportunities within our business to generate value and enhance shareholder returns,” stated Anthony Scaglione, executive vice president and chief financial officer of The ODP Corporation. “Since the beginning of our previous authorization, we have repurchased 10 million shares, retiring over 20% of our outstanding shares since November 2022. Moving forward, we are thrilled to expand this initiative through Project Core, establishing a new $1 billion share buyback authorization valid over the next three years, creating additional value for shareholders while enhancing our core focus and driving our low-cost business model.”

Balance Sheet and Cash Flow

As of December 30, 2023, ODP had total available liquidity of approximately $1.1 billion, consisting of $392 million in cash and cash equivalents and $696 million of available credit under the Third Amended Credit Agreement. Total debt was $174 million. Subsequent to the end of the quarter, in January 2024, the Company retired $53 million of outstanding FILO Term Loan Facility loans, funded through available liquidity.

For the fourth quarter of 2023, cash generated by operating activities of continuing operations was $70 million, which included $2 million in restructuring and other spend, compared to cash provided by operating activities of continuing operations of $158 million in the fourth quarter of the prior year, which included $20 million in restructuring and other spend. The year-over-year change in operating cash flow is largely related to the timing of certain working capital items.

Capital expenditures in the fourth quarter of 2023 were $29 million versus $31 million in the prior year period, reflecting continued growth investments in the Company’s digital transformation, distribution network, and eCommerce capabilities. Adjusted Free Cash Flow(3) was $43 million in the fourth quarter of 2023, compared to $147 million in the prior year period.

“Our team’s strong commitment and dedication in managing inventory and working capital has resulted in strong cash flow generation,” said Scaglione. “As we move into the new year, we will maintain our disciplined approach, focusing on managing costs, maximizing cash flow, and executing our capital allocation plan,” he added.

Project Core and New $1 Billion Share Repurchase Authorization

Upon a year-end review across all of its business units and consistent with its low-cost business model approach, the Company announced “Project Core”, a plan designed to create further efficiencies in its business, focused on driving enhanced operating results and increasing shareholder returns through an expanded share repurchase program. This broad-based plan includes cost improvement actions across the entire enterprise, including all routes to market, Varis, procurement, IT and shared services, encompassing the entirety of ODP’s enterprise, optimizing its organizational structure to support future growth of the business. During this effort, the Company continues to review strategic options for it’s Varis business unit and expects to conclude this review and provide a full update by its first quarter earnings announcement call in early May 2024.

In connection with Project Core, the Company expects to realize annualized savings in the range of $50 million to $60 million when fully implemented. Restructuring and related charges associated with these actions are estimated to be in the range of $20 million to $30 million and are expected to be substantially incurred throughout 2024. The Company expects to begin reducing costs exiting the first quarter of 2024, with most of these actions expected to be completed over the following 12 months.

“Project Core aligns with our low-cost model mindset and builds upon our continued focus of driving strong operating results while enhancing value for shareholders through our new share repurchase authorization,” said Smith. “We’re taking what we’ve learned during our first year of operating under our new structure, and through Project Core, we’re driving further operational efficiencies in our business, enabling us to more effectively serve customers and pursue new avenues of long-term growth.”

As a component of Project Core, the Company announced that its Board of Directors has approved a new $1 billion, 3-year, share repurchase authorization, replacing its prior authorization that was valid through 2025, which had approximately $530 million available at the end of February 2024, after the Company repurchased approximately $470 million since November 2022.

“Our new $1 billion share repurchase authorization highlights our management team and Board of Director’s continued focus on enhancing value for shareholders. Our disciplined capital plan, combined with our continued focus on driving operational excellence enhanced through Project Core, create a compelling value proposition for all of our stakeholders,” said Smith.

The number of shares to be repurchased under the authorization in the future and the timing of such transactions will depend on a variety of factors, including market conditions, regulatory requirements, and other corporate considerations. The new authorization could be suspended or discontinued at any time as determined by the Board of Directors.

2024 Guidance

“We’re enthusiastic about the numerous opportunities in our business to drive long term value and we remain focused on prudently deploying capital to the benefit of shareholders,” said Smith. “As we move forward into 2024, we remain cautiously optimistic regarding the macroeconomic environment, and we will remain focused on executing upon our three horizons strategy and continuing our commitment to our low-cost model approach through Project Core.”

“While macroeconomic conditions posed challenges throughout the year and we expect these conditions to persist in the near term, our team’s continued focus on driving our low-cost model, enhanced by Project Core, have positioned us to issue the following guidance for 2024,” Scaglione added.

The Company’s full year guidance for 2024 is as follows:

  FY 2024 Guidance(1)
 SalesDecline of 2% – 5%
 Adjusted EBITDA$410 million – $430 million
 Adjusted Operating Income(1)$280 million – $300 million
 Adjusted Earnings per Share(1)$5.60 – $5.80 per share
 Adjusted Free Cash Flow (3)(*)Greater than $200 million
*Adjusted Free Cash Flow is defined as cash flows from operating activities less capital expenditures excluding cash charges associated with the Company’s Project Core Restructuring and related expenses 

The Company’s full year guidance for 2024 includes non-GAAP measures, such as Adjusted EBITDA, Adjusted Operating Income, Adjusted Earnings per Share and Adjusted Free Cash Flow. These measures exclude charges or credits not indicative of core operations, which may include but not be limited to restructuring charges, capital expenditures, acquisition-related costs, executive transition costs, asset impairments and other significant items that currently cannot be predicted without unreasonable efforts. The exact amount of these charges or credits are not currently determinable but may be significant. Accordingly, the Company is unable to provide equivalent GAAP measures or reconciliations from GAAP to non-GAAP for these financial measures.

“Our revenue guidance assumes continued store footprint consolidation and improving trends in our eCommerce channel at Office Depot, organic and inorganic growth at ODP Business Solutions, continued expansion at Veyer and progress at Varis. Our adjusted EPS outlook assumes higher interest expense associated with projected intra-quarter ABL borrowings, and the impact from a higher level of share buyback activity associated with Project Core. While our guidance assumes incremental improvement in the overall macroeconomic environment throughout 2024, we remain cautious on the state of the overall US economy, primarily workforce employment and the consumer, as well as international trade policies and agreements that could further impact the level of consumer and business activity,” Scaglione added.

The ODP Corporation will webcast a call with financial analysts and investors on February 28, 2024, at 9:00 am Eastern Time, which will be accessible to the media and the general public. To listen to the conference call via webcast, please visit The ODP Corporation’s Investor Relations website at investor.theodpcorp.com. A replay of the webcast will be available approximately two hours following the event.

(1)As presented throughout this release, adjusted results represent non-GAAP financial measures and exclude charges or credits not indicative of core operations and the tax effect of these items, which may include but not be limited to merger integration, restructuring, acquisition costs, and asset impairments. Reconciliations from GAAP to non-GAAP financial measures can be found in this release as well as on the Company’s Investor Relations website at investor.theodpcorp.com.
(2)As used in this release, Free Cash Flow is defined as cash flows from operating activities less capital expenditures. Free Cash Flow is a non-GAAP financial measure and reconciliations from GAAP financial measures can be found in this release as well as on the Company’s Investor Relations website at investor.theodpcorp.com.
(3)As used in this release, Adjusted Free Cash Flow is defined as Free Cash Flow excluding cash charges associated with the Company’s Project Core Restructuring, and related expenses Adjusted Free Cash Flow is a non-GAAP financial measure and reconciliations from GAAP financial measures can be found in this release as well as on the Company’s Investor Relations website at investor.theodpcorp.com.

About The ODP Corporation

The ODP Corporation (NASDAQ:ODP) is a leading provider of products, services, and technology solutions through an integrated business-to-business (B2B) distribution platform and omni-channel presence, which includes supply chain and distribution operations, dedicated sales professionals, a B2B digital procurement solution, online presence, and a network of Office Depot and OfficeMax retail stores. Through its operating companies ODP Business Solutions, LLC; Office Depot, LLC; Veyer, LLC; and Varis, Inc, The ODP Corporation empowers every business, professional, and consumer to achieve more every day. For more information, visit theodpcorp.com.

ODP and ODP Business Solutions are trademarks of ODP Business Solutions, LLC. Office Depot is a trademark of The Office Club, LLC. OfficeMax is a trademark of OMX, Inc. Veyer is a trademark of Veyer, LLC. Varis is a trademark of Varis, Inc. Grand&Toy is a trademark of Grand & Toy, LLC in Canada. ©2023 Office Depot, LLC. All rights reserved. Any other product or company names mentioned herein are the trademarks of their respective owners.

FORWARD LOOKING STATEMENTS

This communication may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements or disclosures may discuss goals, intentions and expectations as to future trends, plans, events, results of operations, cash flow or financial condition, the potential impacts on our business due to the unknown severity and duration of the COVID-19 pandemic, or state other information relating to, among other things, the Company, based on current beliefs and assumptions made by, and information currently available to, management. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “plan,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “expectations”, “outlook,” “intend,” “may,” “possible,” “potential,” “predict,” “project,” “propose” or other similar words, phrases or expressions, or other variations of such words. These forward-looking statements are subject to various risks and uncertainties, many of which are outside of the Company’s control. There can be no assurances that the Company will realize these expectations or that these beliefs will prove correct, and therefore investors and stakeholders should not place undue reliance on such statements.

Factors that could cause actual results to differ materially from those in the forward-looking statements include, among other things, highly competitive office products market and failure to differentiate the Company from other office supply resellers or respond to decline in general office supplies sales or to shifting consumer demands; competitive pressures on the Company’s sales and pricing; the risk that the Company is unable to transform the business into a service-driven, B2B platform that such a strategy will not result in the benefits anticipated; the risk that the Company will not be able to achieve the expected benefits of its strategic plans, including the strategic review of Varis and benefits related to Project Core; the risk that the Company may not be able to realize the anticipated benefits of acquisitions due to unforeseen liabilities, future capital expenditures, expenses, indebtedness and the unanticipated loss of key customers or the inability to achieve expected revenues, synergies, cost savings or financial performance; the risk that the Company is unable to successfully maintain a relevant omni-channel experience for its customers; the risk that the Company is unable to execute the Maximize B2B Restructuring Plan successfully or that such plan will not result in the benefits anticipated; failure to effectively manage the Company’s real estate portfolio; loss of business with government entities, purchasing consortiums, and sole- or limited- source distribution arrangements; failure to attract and retain qualified personnel, including employees in stores, service centers, distribution centers, field and corporate offices and executive management, and the inability to keep supply of skills and resources in balance with customer demand; failure to execute effective advertising efforts and maintain the Company’s reputation and brand at a high level; disruptions in computer systems, including delivery of technology services; breach of information technology systems affecting reputation, business partner and customer relationships and operations and resulting in high costs and lost revenue; unanticipated downturns in business relationships with customers or terms with the suppliers, third-party vendors and business partners; disruption of global sourcing activities, evolving foreign trade policy (including tariffs imposed on certain foreign made goods); exclusive Office Depot branded products are subject to additional product, supply chain and legal risks; product safety and quality concerns of manufacturers’ branded products and services and Office Depot private branded products; covenants in the credit facility; general disruption in the credit markets; incurrence of significant impairment charges; retained responsibility for liabilities of acquired companies; fluctuation in quarterly operating results due to seasonality of the Company’s business; changes in tax laws in jurisdictions where the Company operates; increases in wage and benefit costs and changes in labor regulations; changes in the regulatory environment, legal compliance risks and violations of the U.S. Foreign Corrupt Practices Act and other worldwide anti-bribery laws; volatility in the Company’s common stock price; changes in or the elimination of the payment of cash dividends on Company common stock; macroeconomic conditions such as higher interest rates and future declines in business or consumer spending; increases in fuel and other commodity prices and the cost of material, energy and other production costs, or unexpected costs that cannot be recouped in product pricing; unexpected claims, charges, litigation, dispute resolutions or settlement expenses; catastrophic events, including the impact of weather events on the Company’s business; the discouragement of lawsuits by shareholders against the Company and its directors and officers as a result of the exclusive forum selection of the Court of Chancery, the federal district court for the District of Delaware or other Delaware state courts by the Company as the sole and exclusive forum for such lawsuits; and the impact of the COVID-19 pandemic on the Company’s business. The foregoing list of factors is not exhaustive. Investors and shareholders should carefully consider the foregoing factors and the other risks and uncertainties described in the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K filed with the U.S. Securities and Exchange Commission. The Company does not assume any obligation to update or revise any forward-looking statements.

View the full release here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240228279722/en/

Tim Perrott Investor Relations 561-438-4629 Tim.Perrott@theodpcorp.com

Source: The ODP Corporation

ACCO Brands (ACCO) – 4Q Post Call Commentary

Posted on by cpereira@noblefcm.com


Tuesday, February 27, 2024

ACCO Brands Corporation is one of the world’s largest designers, marketers and manufacturers of branded academic, consumer and business products. Our widely recognized brands include AT-A-GLANCE®, Esselte®, Five Star®, GBC®, Kensington®, Leitz®, Mead®, PowerA®, Quartet®, Rapid®, Rexel®, Swingline®, Tilibra®, and many others. Our products are sold in more than 100 countries around the world. More information about ACCO Brands, the Home of Great Brands Built by Great People, can be found at www.accobrands.com.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , 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.

Setting the Table. ACCO management had laid out a number of key priorities at the beginning of 2023 to set the Company on a path of sustainable, profitable growth. The key elements of the program were achieved. Gross margin improved 428 basis points y-o-y, restructuring efforts are right-sizing SG&A and the facility footprint, inventory was reduced by $68 million, and strong FCF enabled debt to be reduced by $88 million.

But Top Line Challenges Remain. Comparable revenue fell 6.5% y-o-y. Weak computer and gaming accessory sales, lower than expected “return-to-office” trends, and tight inventory management by customers all impacted the top line. We expect a number of these challenges to reverse course in 2024, although the pace will be measured and likely benefit 2H24. 


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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. 

Lifeway Foods (LWAY) – Moving to Outperform, $14 PT

Posted on by cpereira@noblefcm.com


Monday, February 26, 2024

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , 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.

Upgrade to Outperform. We are upgrading our rating on Lifeway shares to Outperform from Market Perform with a $14 price target. Since peaking on November 14th at an intra-day high of $17.33, LWAY shares have drifted lower, closing Friday at $10.51, modestly above the lowest closing price since mid-November of $9.38.

A Look Back. LWAY shares have been on a roller coaster ride since mid-August 2023, driven by a combination of improving operational performance, including a number of record quarters, and takeover speculation, in our view. The shares ran up from $6.50 in mid-August to $12.40 by mid-September, back below $10 by the end of September, back above $12 by mid-November, plunging to $9.38 on November 13th before hitting a 52-week high of $17.33 ten days later. Since the 52-week high, the shares have drifted lower. Notably, during the run up, ADV often exceeded 100,000 shares per day, compared to less than 20,000 prior to the run up. More recently, ADV has settled in the 20,000-40,000 range.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

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.