Vera Bradley (VRA) Q1 2025 earnings summary

Executive summary

• Q1 FY2025 consolidated net revenues were $80.6 million, down 14.6% year-over-year, reflecting macroeconomic and transformation headwinds, with all segments declining, especially Pura Vida and VB Indirect.

• Net loss widened to $8.1 million ($0.26/share), compared to $4.7 million ($0.15/share) last year; non-GAAP net loss was $6.5 million ($0.21/share).

• Project Restoration, a strategic turnaround plan, is underway with major customer-facing changes set for July 2024, aiming for improved performance in the second half.

• Strong balance sheet with $55.2 million in cash, no debt, and inventories down over 12% year-over-year.

• Pura Vida continues to focus on profitability over revenue growth, prioritizing marketing efficiency and cost control.

Financial highlights

• Q1 consolidated revenues were $80.6 million, down from $94.4 million year-over-year.

• Gross profit was $41.9 million (52.0% margin), down from $51.7 million (54.8%) year-over-year; non-GAAP gross profit was $42.7 million (53.0%).

• SG&A expense was $53.8 million (66.7% of revenue), up as a percentage of revenue; non-GAAP SG&A was $52.4 million (65.0%).

• Operating loss was $11.4 million (14.2% of revenue), versus $6.4 million (6.8%) last year; non-GAAP operating loss was $9.3 million.

• Cash and equivalents at quarter-end were $55.2 million, with no borrowings on the $75 million ABL facility.

• Inventory was $125.2 million, down 12% year-over-year.

• $6.3 million of stock repurchased in Q1; $19.2 million remains on the repurchase authorization expiring December 2024.

Outlook and guidance

• Fiscal 2025 guidance reaffirmed: consolidated net revenues of $460–$480 million (vs. $470.8 million in FY24).

• Vera Bradley brand sales expected to grow low single digits, with acceleration in the second half; Pura Vida sales to decline mid-teens.

• Gross margin expected at 54%–55%; SG&A expenses $229–$239 million.

• Operating income projected at $21–$24.5 million; diluted EPS $0.54–$0.62.

• Net cash flow anticipated at $10 million; capital spending of $12–$14 million, mainly for new/remodeled stores and technology.