Vera Bradley’s direct segment revenues totalled $49.7 million, a 5.3 per cent decrease from $52.5 million in the prior year third quarter. Comparable sales declined 5.8 per cent in the third quarter, primarily driven by traffic and conversion declines in the outlet channels. This represents the company’s third quarter of sequential comparable sales improvement. During the third quarter, the company closed one underperforming full-line store.
Vera Bradley reported Q3 net revenues of $62.3 million, down from $70.5 million year over year.
Direct revenues fell 5.3 per cent, with comparable sales down 5.8 per cent, while indirect revenues dropped 30.2 per cent.
Gross margin declined to 42.1 per cent, impacted by inventory write-downs and higher duties, despite early progress from its Project Sunshine transformation.
Vera Bradley’s indirect segment revenues totalled $12.6 million, a 30.2 per cent decrease from $18.0 million in the prior year third quarter. The decrease was primarily related to a decline in specialty and key account orders, which were partially offset by increased liquidation sales, the company said in a press release.
“Our third quarter results demonstrate progress in our comprehensive transformation strategy, which we have now branded as Project Sunshine, our five-pillar initiative anchored on reclaiming Vera Bradley’s joyful optimism while fueling operational excellence. Project Sunshine encompasses sharpening our brand focus, resetting our go-to-market approach, rewiring our digital ecosystem, implementing Outlet 2.0, and re-imagining how we work as an organisation,” said Ian Bickley, executive chairman of Vera Bradley.
“With third quarter revenues of $62.3 million, our direct segments registered sequential improvement across key metrics including positive comparable Brand channel sales for five months from back-to-school through Black Friday weekend. The successful return of iconic styles like the Original 100 Bag, the Vera and Glenna Totes also give us confidence we’re moving Vera Bradley in the right direction. While significant work remains, these early wins and our continued focus on profitability and cash generation position us well for sustainable growth,” added Bickley.
Gross profit totalled $26.2 million, or 42.1 per cent of net revenues in the third quarter, compared to $38.4 million, or 54.5 per cent of net revenues, in the prior year. On a non-GAAP basis, current year gross profit totaled $26.0 million, or 41.7 per cent of net revenues. The year-over-year decrease in consolidated gross profit as a percentage of net revenues was primarily driven by the previously mentioned inventory write-down as well as additional duty expenses, partially offset by pricing improvements.
Fibre2Fashion News Desk (RR)
