Vera Bradley to reduce store count
Vera Bradley plans to close or relocate 15 of its stores over the next two years as it works to refine its distribution channels in what CEO Rob Wallstrom referred to as a “challenging” retail environment.
The company, which also relaunched its new, improved digital platform in February, today announced revenue for the fourth quarter that fell short of the company’s expectations. Fourth-quarter net income was $3.5 million, or 9 cents per share, on net revenues of $134.8 million, down from $154.1 million a year ago. Excluding $6.6 million in impairment charges for underperforming stores, net income for the recent quarter was $10.1 million, or 28 cents per share.
For the prior year fourth quarter, net income was $15.7 million, or 41 cents per share, including after-tax store impairment charges of $1.8 million. Excluding charges, the prior-year quarter’s net income was $17.5 million, or 46 cents per share.
The Fort Wayne-based manufacturer of handbags, luggage and accessories ended the fiscal year with a strong cash position (including short-term investments) of $116.5 million, no debt and a year-over-year drop in inventories of 10 percent.
“The retail environment became even more challenging in the fourth quarter. Consequently, both total revenues and our gross profit percentage were modestly below our expectations,” Wallstrom said.
The company exceeded fourth-quarter earnings per share guidance, however, due to diligent expense management and a lower-than-expected tax rate, he added.
For the fiscal year, ended Jan. 30, net revenues totaled $485.9 million, compared with $502.6 million in the prior year and slightly below the company’s forecast of $486 million to $491 million.
Direct segment revenues for the current fiscal year totaled $355.2 million, a 1.1 percent increase from $351.3 million last year. Comparable sales decreased 7 percent, reflecting a 7.1 percent decline in comparable store sales and a 6.7 percent decrease in e-commerce sales, which was more than offset by new store growth. Vera Bradley opened four full-line and six factory outlet stores during the past 12 months.