Vera Bradley (VRA) investor relations material

Executive summary

• Achieved second consecutive quarter of overall growth, with consolidated net revenues up 1.1% year-over-year to $71.6 million, driven by Project Sunshine and operational improvements.

• Direct segment delivered 8% revenue growth and 9.2% comparable sales increase, marking five consecutive quarters of sequential improvement.

• Indirect segment revenue declined 39.4% due to strategic marketplace shifts and reduced liquidation, partially offset by specialty and department store growth.

• Cost optimization, reduced advertising spend, and management transition contributed to improved profitability.

• Inventory reduced by 28% year-over-year, operating cash flow of $23 million, and quarter-end cash doubled to $34 million with no debt.

Financial highlights

• Q2 net revenues: $71.6 million (+1.1% YoY); H1 net revenues: $127.4 million (+4.0% YoY).

• Q2 gross profit: $42.8 million (59.8% of net revenues), up from $35.4 million (49.9%) last year; gross margin rose to 59.8% from 50.1%.

• Q2 net income from continuing operations: $4.5 million ($0.15 per diluted share); prior year was a loss of ($4.7) million.

• SG&A expense: $38.7 million (54.1% of net revenues), down from $40.4 million (57.1%) last year, mainly due to lower advertising spend.

• Operating income for Q2: $4.2 million (5.8% of net revenues), compared to a loss of ($4.6) million (-6.5%) last year.

Outlook and guidance

• Reiterated full-year sales guidance of $255–$270 million and at least 50% year-over-year improvement in non-GAAP operating loss.

• Expect continued gross margin improvement, disciplined cost management, and inventory turns in the 2–3 range.

• Guidance reflects rebuilding of wholesale business and reduced emphasis on liquidation channels.

• Company remains focused on executing Project Sunshine and adapting to macroeconomic conditions.