Vera Bradley Inc. wants to be more involved in the lives of Millennials.
The company has entered into two licensing agreements for stationery and publishing. The agreement with Lifeguard Press is for signature stationery and home and office organizational products, with merchandise introduced into the market in fall 2017. The other agreement is with Fox Chapel Publishing for coloring activity and design books and gift sets that will incorporate Vera Bradley’s patterns — these will be available for holiday 2016.
Sue Fuller, chief merchandising officer, said, “We are very fortunate that there is enormous interest in Vera Bradley in each of these areas and that we are able to be selective and develop relationships with the expert partners that are the best fits for our company.” She added that the company would sign additional licensing agreements “in the future.”
As for broadening its home business, Fuller said, “Our distinctive patterns naturally lend themselves to a myriad of products in home, fashion and beauty.”
Robert Wallstrom, chief executive officer, said the agreements help to establish a more “solid foundation for international growth.”
The company said it will work with its licensing partners in the development of product and that it has “final approval of all product designs.”
About 40 percent of the business is in handbags, home and jewelry; 30 percent is travel and 30 percent is campus, which includes its backpack business. Sources said it has a growing consumer base in the Millennial demographic. Its web site — which will be revamped in October — includes separate sections for back-to-school and college campus merchandise.
Investors took a shine to the news sending shares up 11.3 percent to $16.65 even though the company lowered guidance for fiscal 2017. The firm did report second-quarter profits lower than a year ago, while revenues beat Wall Street’s estimates.
For the three months ended July 30, the company said net income fell 10.6 percent to $5.1 million, or 14 cents a diluted share, from $5.7 million, or 15 cents, a year ago. Net revenues slipped 1.2 percent to $119.2 million from $120.7 million.
Wall Street was expecting earnings per share of 13 cents on revenues of $118.7 million.
Wallstrom said while the overall retail environment remains challenged, Vera’s revenues were within guidance range. For the third quarter, he said it would herald in the firm’s “new brand positioning, which we believe will lay the foundation for positive comparable sales growth by the end of the year.”
The company guided third quarter diluted EPS to between 22 cents and 24 cents, compared with 27 cents a year ago. Net revenues are forecasted at between $128 million and $133 million, compared with $126.7 million a year ago.
For fiscal 2017, the company expects diluted EPS of 88 cents to 92 cents, on net revenues of $510 million to $515 million. That compares with the year-ago EPS of 82 cents on revenues of $502.6 million. The company initially guided diluted EPS to between 90 cents and 98 cents on a revenue estimate of $510 million to $525 million in March when it posted fourth-quarter results. In June, when it reported first-quarter results, the company reaffirmed diluted EPS guidance, but lowered the revenue range estimate to between $510 million and $520 million.