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Vera Bradley (VRA) Stock Down on Q3 Earnings & Sales Miss
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Vera Bradley, Inc. (VRA - Free Report) reported third-quarter fiscal 2019 results, wherein both the top and bottom lines missed the Zacks Consensus Estimate and decreased year over year. Moreover, the company continued to struggle with its dismal comparable store sales (comps) performance.
Lower-than-expected results hurt investor sentiments. Consequently, shares of the company fell more than 10% during the trading session on Dec 12.
This Zacks Rank #3 (Hold) stock has lost 45.6% in the past three months, underperforming the industry’s 18.8% decline.
Q3 Highlights
In the quarter under review, Vera Bradley adjusted earnings came in at 12 cents per share, which lagged the Zacks Consensus Estimate of 16 cents. Also, the bottom line declined 47.8% from the year-ago quarter.
Net revenues decreased 14.4% to $97.7 million from $114.1 million in the prior-year quarter. Also, the top line lagged the Zacks Consensus Estimate of $101.4 million. This was mainly due to shift of sales in direct segment of around $6 million in the fiscal second quarter compared to the last-year quarter, linked to the timing of promotional events.
Vera Bradley, Inc. Price, Consensus and EPS Surprise
Direct segment revenues fell 11.7% to $73.5 million, with decrease in comps (including e-commerce and the event shift) of 16.5% in the quarter.
Revenues at indirect segment decreased 21.7% to $24.2 million due to lower orders from both specialty accounts and key accounts as well as reduced department store presence.
Moving ahead, adjusted operating income came in at $5.3 million compared with $13 million a year ago. Adjusted SG&A expenses remained almost flat at $51.9 million.
Other Financial Aspects
Vera Bradley ended the fiscal third quarter with cash and cash equivalents of $62.3 million, short-term investment of $46 million, with no debt outstanding, and total shareholders’ equity of $289.9 million. Cash flow from operations amounted to $11.6 million during the 39-week period ended Nov 3, 2018.
Net capital expenditures for the quarter and 39-week period ended Nov 3, 2018 were $0.7 million and $6.6 million, respectively. For fiscal 2019, the company expects capital expenditure to be roughly $8 million compared with $11.8 million recorded last year.
During the fiscal third quarter, the company repurchased roughly $7.5 million of common stock. Vera Bradley is left with approximately $2.3 million at the end of the quarter, under share repurchase authorization.
However, the company repurchased $2.3 million remaining under the plan this November. Further, the board of directors approved a new $50 million share repurchase authorization, which will expire in December 2020.
Outlook
For the fiscal fourth quarter, management anticipates net sales of $114-$119 million compared with $132 million a year ago. Further, the company anticipates earnings of 22-25 cents per share, down from 33 cents reported in the year-ago quarter. The Zacks Consensus Estimate for the quarter stands at 20 cents.
Net sales for fiscal 2019 are expected to be $412-$417 million compared with the prior-year net sales of $454.6 million. Also, Vera Bradley anticipates earnings of 57-60 cents per share. Earlier, the company envisioned net sales between $410 million and $420 million. The company expects earnings per share of 55-62 cents compared with 60 cents in the prior year. The Zacks Consensus Estimate for the fiscal year is pegged at 59 cents.
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L Brands, Inc. has a long-term earnings growth rate of 11.5% and a Zacks Rank #2 (Buy).
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Vera Bradley (VRA) Stock Down on Q3 Earnings & Sales Miss
Vera Bradley, Inc. (VRA - Free Report) reported third-quarter fiscal 2019 results, wherein both the top and bottom lines missed the Zacks Consensus Estimate and decreased year over year. Moreover, the company continued to struggle with its dismal comparable store sales (comps) performance.
Lower-than-expected results hurt investor sentiments. Consequently, shares of the company fell more than 10% during the trading session on Dec 12.
This Zacks Rank #3 (Hold) stock has lost 45.6% in the past three months, underperforming the industry’s 18.8% decline.
Q3 Highlights
In the quarter under review, Vera Bradley adjusted earnings came in at 12 cents per share, which lagged the Zacks Consensus Estimate of 16 cents. Also, the bottom line declined 47.8% from the year-ago quarter.
Net revenues decreased 14.4% to $97.7 million from $114.1 million in the prior-year quarter. Also, the top line lagged the Zacks Consensus Estimate of $101.4 million. This was mainly due to shift of sales in direct segment of around $6 million in the fiscal second quarter compared to the last-year quarter, linked to the timing of promotional events.
Vera Bradley, Inc. Price, Consensus and EPS Surprise
Vera Bradley, Inc. Price, Consensus and EPS Surprise | Vera Bradley, Inc. Quote
Direct segment revenues fell 11.7% to $73.5 million, with decrease in comps (including e-commerce and the event shift) of 16.5% in the quarter.
Revenues at indirect segment decreased 21.7% to $24.2 million due to lower orders from both specialty accounts and key accounts as well as reduced department store presence.
Moving ahead, adjusted operating income came in at $5.3 million compared with $13 million a year ago. Adjusted SG&A expenses remained almost flat at $51.9 million.
Other Financial Aspects
Vera Bradley ended the fiscal third quarter with cash and cash equivalents of $62.3 million, short-term investment of $46 million, with no debt outstanding, and total shareholders’ equity of $289.9 million. Cash flow from operations amounted to $11.6 million during the 39-week period ended Nov 3, 2018.
Net capital expenditures for the quarter and 39-week period ended Nov 3, 2018 were $0.7 million and $6.6 million, respectively. For fiscal 2019, the company expects capital expenditure to be roughly $8 million compared with $11.8 million recorded last year.
During the fiscal third quarter, the company repurchased roughly $7.5 million of common stock. Vera Bradley is left with approximately $2.3 million at the end of the quarter, under share repurchase authorization.
However, the company repurchased $2.3 million remaining under the plan this November. Further, the board of directors approved a new $50 million share repurchase authorization, which will expire in December 2020.
Outlook
For the fiscal fourth quarter, management anticipates net sales of $114-$119 million compared with $132 million a year ago. Further, the company anticipates earnings of 22-25 cents per share, down from 33 cents reported in the year-ago quarter. The Zacks Consensus Estimate for the quarter stands at 20 cents.
Net sales for fiscal 2019 are expected to be $412-$417 million compared with the prior-year net sales of $454.6 million. Also, Vera Bradley anticipates earnings of 57-60 cents per share. Earlier, the company envisioned net sales between $410 million and $420 million. The company expects earnings per share of 55-62 cents compared with 60 cents in the prior year. The Zacks Consensus Estimate for the fiscal year is pegged at 59 cents.
Interested in Retail? 3 Stocks You Can’t Miss
Boot Barn Holdings, Inc. (BOOT - Free Report) delivered average positive earnings surprise of 15.1% in the trailing four quarters. It has a long-term earnings growth rate of 23% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
L Brands, Inc. has a long-term earnings growth rate of 11.5% and a Zacks Rank #2 (Buy).
Foot Locker, Inc. (FL - Free Report) delivered average positive earnings surprise of 6.8% in the trailing four quarters. The stock carries a Zacks Rank of 2.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>