Vera Bradley (VRA) Q4 2024 earnings summary

Executive summary

• FY24 revenue was $470.8m vs $500.0m; GAAP net income was $7.8m vs a $59.7m loss, while adjusted net income was $17.2m vs a $3.2m loss.

• Q4 revenue fell to $133.3m from $147.1m; adjusted net income was $3.5m vs a $1.0m loss. Project Restoration is aimed at stabilizing sales and supporting long-term profitable growth.

Financial highlights

• FY24 gross profit was $256.4m, or 54.5% of revenue, vs $238.9m, or 47.8%; adjusted prior-year gross margin was 48.1%.

• FY24 GAAP operating income was $10.4m vs a $94.9m loss; adjusted operating income was $22.6m vs a $4.4m loss.

• Q4 GAAP operating loss was $2.8m vs $49.8m; adjusted operating income was $4.1m vs a $3.5m loss.

• FY24 results included $9.4m of after-tax charges, including $4.2m in intangible impairment, $2.3m in intangible amortization and $2.2m in severance.

• Q4 adjusted gross margin was 52.3% vs prior-year adjusted 41.3%; lower inventory reserves, freight and supply-chain costs helped, partly offset by higher promotions.

Outlook and guidance

• FY25 revenue guidance is $460m-$480m; Vera Bradley sales are expected to grow low-single digits, accelerating in H2, while Pura Vida sales are expected to decline in the mid-teens.

• FY25 adjusted gross margin guidance is 54.0%-55.0%; product margin gains and lower supply-chain costs are expected to be offset by higher shipping costs.

• FY25 adjusted SG&A guidance is $229m-$239m, with marketing investment offset by expense reductions and lower Pura Vida costs; adjusted operating income guidance is $21.0m-$24.5m.

• FY25 adjusted diluted EPS guidance is $0.54-$0.62 on 30.1m weighted-average shares and an ~28% tax rate; free cash flow guidance is ~$10m.

• FY25 capital spending is projected at $12m-$14m for store, technology and logistics investments; management expects an unpredictable macro environment and a rebuilding year.