Vera Bradley Inc. saw its stock rise slightly by over 4 percent to $18.40 in pre-market trading after the accessory company delivered fourth quarter results that beat revenue estimates and was inline with earnings estimates.
Net revenues for the quarter rose 1 percent to $154.1 million, or 41 cents a diluted share, up from $152.6 million, or 43 cents, a year ago. The FactSet estimate for earnings per share was 41 cents and the estimate for revenues was $153 million.
“While our overall fourth-quarter comparable sales (including e-commerce) fell 4.6 percent, our comparable store sales were essentially flat, declining just 0.2 percent,” said chief executive officer Robert Wallstrom. “E-commerce sales were once again negatively impacted by reduced promotional activity. However, both comparable sales and comparable store sales trends sequentially improved each quarter of the fiscal year.”
For the full year, the company’s net revenues fell to $502.6 million from last year’s $509 million, but was at the upper end of the guided range of $499 million to $503 million. Comparable sales for the year decreased 10.6 percent and that includes the e-commerce business. The company’s sales were hurt by declines in store and online traffic, plus reduced promotional activity.
Vera eliminated hyperpromotions of 60 to 70 percent discounts and cut back on the number of sales. This led to an improvement of 370 basis points in gross profits. Gross profits for the quarter totaled $89.6 million, which topped the previous year’s gross profit of $80.0 million.
Looking ahead, Vera is forecasting net revenues for the fiscal first quarter of 2017 to be in a range of $105 million to $109 million, which is better than the previous year’s revenue of $101.1 million. The diluted earnings per share for the first quarter are projected to be between 4 and 6 cents, which is higher than the FactSet estimate of 3 cents a share. For the fiscal year 2017, Vera is forecasting net revenues of $510 million to $525 million and earnings per share of 90 to 98 cents.
Over the past year, Vera has doubled its presence at Macy’s and added distribution at select Belk and Bon-Ton stores. It has opened 15 full-line stores and 11 factory stores. The company also said it plans to open a flagship store in New York’s SoHo in September.
“We realize it will take more time and effort to return the business to solid growth, but we are excited about our refined brand positioning and energized about the future,” said Wallstrom. “We believe we are positioned to begin generating positive comparable growth in the second half of this fiscal year.”