VRA - Earnings call transcript Q2 2019

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Operator

Good day and welcome to the Vera Bradley Second Quarter Fiscal 2019 Earnings Conference Call. Today's conference is being recorded. At this time I'd like to turn the conference over to Mr. Mark Dely, Chief Administrative Officer. Please go ahead, sir.

Mark Dely

everyone. welcome and morning Good We'd like Bradley's us Vera for thank quarter call. you second joining for to

today's Some from statements Securities questions remarks the are uncertainties known the call undertakes and XXXX operative materially statements of Rob Private our on turn and Company Bradley's should to pursuant meaning later no in during the not press the X, information both, filed risks and made Harbor for with time. that made call. subject XX-K assume Vera response made obligations that the of on the that to to over uncertainties. I provisions Investors and will Act the The your discussion to cause may the discussed the release Safe forward-looking those and call at any XXXX results risks constitute amended. now Rob. within today's Company's of as will statements call Please of SEC Reform expect. to Form the Litigation known Such statements actual February could fiscal update remain year refer during a forward-looking ended we the for unknown differ and of Wallstrom. to to prepared CEO,

Robert Wallstrom

our you also joins and morning us thank Enwright everyone call. Mark. John CFO Good on me Thank you for today's joining today.

XX/XX were this results Vision and improved our exceeded very clearance, last rate SG&A than our expectations than selling, At to as realigning selling, year's year elements. we margin quarter expense foundation are as revenues we primarily structure to base. strengthen on our future efficiencies growth. and routinely by shipping flow price to reducing our that in and time to solid four freight and a and full Recall restoring for better price as our implement we a both customer plan Vision and related guidance. delivering our and financial maintaining expected management. cash second monitoring cost full with health revenues key are create driven line higher clearance our drastically order and initiated continue gross to We XX/XX, reductions, expected And reporting SG&A expense well brand pleased that performance generation, last by Progress on reduced in sales

We months. our made six initiatives year the especially against tremendous progress over last and the during have last

these activity full-line full-price far and So increased this clearance we over XX% XX%. on and reduced selling have channels in stores in our by by over year, verabradley.com

drive management achieving brand over increased our are implementation innovation nearly $XX to and We through continuing to year-over-year targeted investment desirability and diligent reductions expense balances expense XX/XX Vision initiatives. while our million. million through $XXX and of product by We cash meaningful marketing

higher percentage slightly is on through is reduced and price our levels count year issues and last with some of news is the combined in expected good our from in customer the a to clearance expectations customers full-line traffic exceeded entering channel. Our The which be factory count Verabradley.com brand stores down purchasing. due customer are that new to persistent full

Now second the John. review performance. to I call will financial John the turn quarter over to

John Enwright

Rob morning. good Thanks and

Let a the few me highlights go for over quarter.

to mind lease quarter XXX sales million. in year consulting fees, termination Prior XXX.X charges, second keep year XXX net charges. million numbers strategic quarter sales net previously second quarter the line exclude our in net guidance plain statement disclosed range discuss million totaled I million. year of were As that severance prior of Current XXX.X with income and

third year of the to the related events. of of promotional movement to second quarter segment timing As from the direct previously year approximately disclosed revenues quarter million this the last reflect X

$X.XX share per second the The compared incremental segment promotional direct in just X.X% or we totaled XX.X prior quarter second equates of $X.XX second million, from which the to diluted For before million income year store million XX quarter by sales more or X.X in than The the e-commerce the was I current diluted quarter $X.XX mentioned X.X% X.X increase shift quarter. per approximately revenues charges. current year. net year including share year event new million current Comparable for offset diluted increased posted growth. to of share income per

impacted expected second As of sales activity. by our comparable clearance negatively those verabradley.com reduced quarter particularly were

mix just million revenues SG&A quarter. of XX.X or drove XX Gross shift, excluding of comparable million lower promotional guidance sales XX% our expense prior would the was XX.X in profit million. of XX.X% the in a from revenues current declined we product and the margin approximately reduction better million, changes, million Gross the estimate XX.X the for to in by segment have totaled to in full-priced Excluding XX.X% or X% better quarter on expense decrease than the Indirect second verabradley.com expected million quarter. and The million in charges or totaled totaled XX.X the XX.X% million XX price and due SG&A improvement In year. prior freight channel XXX savings, the primarily sales second selling. to activity in full quarter, Diligent range than management XX.X% reduced compared meaningfully of of company's XX.X net a cost. compared year. prior of XX.X primarily and year clearance selling to full-line year-over-year related than stores, basis sales year increased or to point guidance approximately XX.X% shipping

the of XX.X% operating second also had the or revenues X.X of compared XX.X operating margins. of Indirect to charges net or in million XX.X% year. revenues was in XX.X or the XX.X% net the By million operating Our was year revenues excluding of of or year. revenues net in compared excluding revenues charges income or to we operating net segment to a prior X.X million nice a in XX.X% totaled income X.X% million prior net income in or million year. net $XX compared increase X.X prior million Direct of XX.X% quarter revenues current

second XXX.X at million million at of last the at quarter the of compared end Now X.X of to totaled sheet. debt year our the this quarter-end Quarter-end respectively. million about and let at for compared XX.X was outstanding second months CAPEX. investments to million spend quarter-end. guidance low million $XX million last year's of We second expect spending quarter end million. million six the to Cash, and capital end no to year and still We on the million XXX.X X.X and had cash XX at inventory XX me totaled turn balance equivalents, Net to XXX.X quarter.

outlook The of full Prior and keep charge, year tax are non-GAAP. outlook charges. there numbers and to are consulting, few year. other charges. and essence Now exclude guidance reform numbers exclude year our non-GAAP the similar I for would the balance previously strategic a charges, in disclosed let's as the legislation quarter and any third for All the also planning the turn mind review year, to non-GAAP charges, severance store current impairment potential things

tariffs. EPS diluted not include negatively XX% revenues incremental that incremental week Our an is last not approximately an guidance estimate affect earnings produced year on affect increased approximately contributed extra by China XXXX. does increased that the per year contained X.X by goods could year last week tariff to tariff impact to XXXX net diluted our we fiscal additional could We share $X.XX. enacted the in September for diluted XX% year fiscal negatively If $X.XX penny quarter Due EPS prior in estimate specified approximately by any week. in and comparing from of fiscal quite an to a million The earnings by XXrd apples-to-apples. this $X.XX

second year third the expense the year. the promotional year. mind anniversary third quarter quarter to Vera negatively XX/XX last shift year was that the beneficiary quarter Vision SG&A quarter Bradley as our by sale we quarter a into a this promotional the reductions affected As and event I previously the year in began noted second third year are the current birthday in And and beginning in was keep finally quarter moved factory third -- last of annual this last from

last going forward the not we over we SG&A will months. have the XX realized So see reductions

on As EPS some half a pressure result there will second performance. be

we XX to year second XXX that moved sales million. the into compared quarter of We quarter prior third of from week XXX.X the to third second million to For estimate calendar quarter year million year this of the sales related the net sales last approximately shift. expect $X million quarter XX

digit in a expect in high range low compared including decrease to be We the comparable e-commerce teen driven prior single sales percentage to the by range. year net segment direct sales down

in quarter. indirect the the digit comps range the We in range during net our will million to be sales quarter. down mid the believe teen estimate shift, decline high Excluding the we will to percentage single mid high $X for

year third efficiencies. SG&A quarter third sold the XX million expected products rate to of XX XX% selling, margin higher and improvement quarter. gross MFO and relates we last XX.X% expense and We price shipping margin of XX excluding prior the SG&A freight will and adjusted between compared in a channel year's million third full between quarter our gross to charges. within is expected range of million factory more expect percentage The before compared to charges XX.X% to

non-GAAP the diluted quarter. reduce third be current $X.XX. shifts $X.XX third per $X.XX The approximately year previously We On share prior $X.XX the EPS adjusted or a mentioned will to totaled income basis in excluding diluted net X.X charges will expect our EPS in event quarter. year quarter by million third

the XXX.X the million at third $XXX expect compared in quarter inventory to of quarter. end We range end million $XX third at the to to prior be year the million the of

will and to believe annual XXX annual being of to to million. negatively year-over-year revenue the compares reminder last guidance XX million and is sales a majority these in of changes our are million of As by year. XX million product reflected implemented million initiatives this This which XXX.X year pricing impact sales XX/XX we XXX Vision

sales efficiencies. the the expected decline including sales full Gross net range for Our to XX.X% relates year. low operating teen for compared expected revenue in reduced be XXXX to to cost, year-over-year segment high was margin e-commerce sales net a increase in percentage direct fiscal comparable reliance down lower range compared clearance with of increase guidance to year. single-digits more The year product selling, XX% the range. by XX.X% down will selling, in last XX.X% assumes the and price to are expected full to Indirect last to

XXX XXX.X estimate to savings. to We between million total and management for to year the million This XX/XX expect XXX million Vision year. expense last compared SG&A reflects

on expense on customers our reductions keeping our while Based our marketing first reducing loyal more through expectation performance right on spend size taking diluted the efficiencies and and most to come corporate we've business, to focusing year closing $X.XX store with underperforming have our As of increased sizing half's stores. charges align a EPS infrastructure $X.XX. aggressive excluding range a reminder costs better stance from lowering our operating to by engaged full-line full

EPS $X.XX still $XX diluted $XX million last million Rob. XXXX. Before year. charges flow totaled generate expect We in fiscal to in operating cash to

Robert Wallstrom

Thanks John.

comments distribution you marketing, product, role Before we and created important I an few about a Vera our new me about Bradley. let tell at make channels have

company of The Vision excited XX/XX to and far progress I'm health and the first by been stage has made this so year. restore we've brand

growth beginning we and of stage focus where on beyond. year the are the to second next for we Vision move Now to will XX/XX

channel retail the previously through growth search candidate and a this brand all e-commerce all core drive marketing. a than has a the role has physical began has faster of changed world newly Chief to sales the has responsibility new to very primary the with retail, to channels transformed we years new strategy, from new a we engine leadership first and store place essential. intelligence disruptive that few year last Therefore in Officer purchase of fill experience created Technology becoming marketing has revolutionized place skills the imagined. were change Customer this is And know for earlier digital the and cycle of moved industry engine, been to the become artificial going forever. and the a Over has for

hit in Customer of Officer this related and to social running. to had background and technology which of improve and retail broad comes for record, operations, highly of at for privilege month joined analytics, vision customer based VP I evolving for successful Bradley executives, Vera Outdoor with prior with he a meeting proven COO approach. many a Daren After Customer has L'Oreal. leadership. as customer Hull experience the merchandising SVP Technology, experience, his Amazon, strategy, the analytical is lead out was new approach. candidate Elm Chief at marketing, engagement Digital Officer the technology, General talented online and our customer experience Voices the MyHabit in-store Our area Manager and us acquisition to as scientific of His search exciting due track Luxury stood and West where broad ground recently and Daren new thorough last includes and Chief one through Stores customer at Most and insights, media, served elevating of responsible Williams-Sonoma and in Direct of a and technology. customer Daren background,

Chief and acquisition and us be further responsible retail to strengthen Daren Customer As position. XX/XX, will transformation and growth. for all a revenue chapter a Daren of will digital next to will to leading helping integrate and driving those areas customer implementation the growth for the Vision initiatives drive Vera and supporting us assume Officer chart pushing role return Bradley, of our marketing, sales,

Now to moving product. on

we assortment assuring affordable. our guardrails As introducing categories, our reflect pricing you the implementing for products comfortable, on new know our tighter that of focused and our right brand fit and have casual, signature and when attributes patterns, been

have patterns are and busy customer. know that historical most of our characteristics that product determining pattern We The and bringing and fit product floral, and resonate analyzed teams our most development isolating paisleys the solids and feature design within our designing We and to successful the medallions DNA. thoroughly that with prints. DNA market patterns that performance

categories. recoloration Lilac of And Charcoal We fits was about pattern one response very Water Charcoal it a into last launches simply these that including a is from popular Medallion great that thing are of of seeing each is Magic interesting Bouquet, Paisley, nicely new Medallion and introduced which Medallion year.

colors, take a successful So, occasion new we change and patterns, on the know we can winner. create

We and a and price location. of are assortment making optimization lot headway by agility on

us are and price to We allow that is period the for selling well. accelerate selling full selling pattern than not that better better have retirement a implemented processes patterns planned to extend if

and with keeping are the even due with applicable of we price backpacks addition have to last is full like program on dorm and of Bradley Vera and period started moved back the school from large to will And full In opportunity several visit to Vera retirement set around November totes some XX Day investors brand. our excitement the We campus school in at up, status. and on product. where of a and selling Game will Bradley early back activation distribute speaking just create of we This help up through a great quarter backpacks lunch price to universities to we lunch our brand campus will sales our have days year. patterns patterns though school, been key full a showcase to second lot customers Saturdays back totes Bradley swing is new of and XX% introduce Vera games, run to room

the we shower which our feature is our towels, merchandise theme announced we will to And launched curtains licensing into last Bath bath bedding know collection number our in through debut overall continue and in Mickey's next vital plan the our be celebration collection one pattern price full-line of strategic to edition will the novelty restoring appropriate focus sold We rugs, full-line this been crucial and stores this full you digital health a step most like with volume we year. tomorrow limited our Shifting of ducktail store. just our exclusively our in scheduled have also brand nicely look brand. through in The the and one verabradley.com. to company Springs collection extensions is And that as called reduce fall. Disney selling create especially Vision collaborated activity Paisley to part will bath for initiatives flagship clearance dramatically all and a and launches has towards and XX/XX Disney the opportunities will morning

model verabradley.com. six goal online more remaining newly We of events launched Vera months, business are outlet/sales manner. from transitioning the our have over achieving great sale much this priced to us These we towards product more a more past the majority selling verabradley.com and strides in site current moving online full to clearance flash to made Bradley merchandise are feature successfully through and steps discreet taking segregate to In to response driven further sell the allowing full a priced discount Vera successes these on our to in marketplace. Bradley our

of Specifically distribution last our Vera exited Bradley point online as eBay with an month. partnership

and fiscal sales price In and brand verabradley.com's marketing clearance so us this focused perception for presence is brand force Our to was our with achieve of the we area digital continued beyond. believe on awareness XXXX improve full inventory to right strategy. we to the decision our first customer's increase eBay and help

marketing clearance much full efforts with on and Our is price focused segmented and placement and targeted digital more and emphasis quality offerings on high on less sale.

partners social into successful We collaboration's entered several our have with and like Popsugar. media influencers licensed

We recognition continue our incentives best customers year. throughout journey program to and our special the given are where customer test

will to program We are potential throughout excited about continue and expand year. the and this the refine

events in they Backpack key we children risk a of a social media us providing These on with and around children. and record a with communities. this XX,XXX this wrapping tools the program which up at media Sean Johnson in Backpack Fund our we need garnered Nashville of see his program star country. even to Chicago charitable more well impact events amount has And known women initiatives It schools great plans the in successful the are in part is country and engagement Brittany community our and music been and families, several are with come. engagement Giveaway the to Blessings is personalities Olympic continuing particular for social and As and including wife cities marketing have week have on on coverage for Gymnast entire school hosted children, our Aldean a a year. focus by Jason

the with storefront first XXX full-line now line XX the stores and this closed quarter stores locations. we second in full half On expect year. fiscal close five to in We approximately the

We expect additional expire. leases stores close to XXXX primarily approximately XXXX and fiscal XX in as

if first locations at in At Shore the closures opened we improved improvements exceeding Stores time Falls, Each factory factory store traffic of see Vision flow the operating cash We're long-term healthier over quarter. are new new Jersey. Hershey, which foundation end four brand the the the factory the first in XX/XX high half Jersey the and locations we performance for operating XX operated becoming the could locations in and New stores sales improving. Tinton of in targeted our executing plans. two openings these tourist the second the frame. growth that they in and locations and However new performance includes quarter Pennsylvania and is aggregate our business for business. in By and laying and are are of fewer

associates, passionate we excited Vision future. me with and and brand, path call forward our sheet, about open Operator very passionate balance will the talented XX/XX strong now clear customer exceptional Our questions. base, make to

Operator

[Operator Mark Instructions]. We'll from Baird. from take first question our Altschwager

Mark Altschwager

shift I growth clearance that a down and the a how Thanks to the quarter possible morning. with comp of forward good headwinds and calendar there rate if a best XX% great Vision perspective much business reduction taking high this what's nice was today? out Really selling is over the think acceleration your way from and calendar break price as run and noise, the on estimate to question continued full QX, back due the full go that progress then of to XX/XX. in versus it's for single-digits price Great, job

Robert Wallstrom

questions the Mark. Thanks for

for clearance I second it happened when that the at reduce a of really couple what full in we was first further actions acceleration additional we price all you, took of quarter more to So of with answers guess look due to activity.

opportunity business activity. our further as picking that some we've been momentum to reduce up been clearance has So using

out had believe in and at to me, to on our our of of assortment. we out what verabradley.com major that stores impact decided focus That look as of a full selling lunch full price go type and specifically school all take we price to does of and backpacks clearance decision forward we that alone the the can especially on So our that continue and fourth during solely that back something decision our period quarter. we is bags

and So about shift making. the more that the calendar about it's less decisions we're just

patterns pattern that launch and launching and a was stronger getting excited the bouquet we're Additionally in of there. full the our a of really our that business. see driver example pattern off merchandise what the as assortment to stronger our we becomes very second took water that saw and and price as strength to we're a great so are is But seeing stronger we're quarter also

project In would very looking that look forward activity that growth as about I forward. things will go we're we of get say, we trying all out, seeing think the terms of that's and We are a like clearance a good excited all once full what sign the in we price to full price. couple first of

tricks of demand calculating full price year project to from forward the that's year. really the in clearance purchases moving transfer this the is to the One last trying

but into we've growth talked would we're a we're bit we move as analysis to So as really what of begin bit it's next expecting a about still again. that going we little of through see year

all can that's we point really So point. kind say this at on of that

Mark Altschwager

of the you're any plans expansion how the especially outlet flash given if it I there thinking outlet with wrong than and to your me like stores change I'm helpful any the growth initiatives next the sales? think and just channel, really of bit And still opportunity That's planned about color that outlet outlets? store happening for on call softer correct with years over then a sounds some but what's couple may be within

Robert Wallstrom

factory wanted little question, to. seen seeing to yes, made lot we've the a a strategic off peer are pricing that things; that almost moved a couple has a outlet of model. where of we one, great no area a but be XX% of the again we bit our decision so set We've Yeah, a our of expected time to we the majority we're traffic business tracking slower type in in below slightly than

actually a have we suppressing continuing in we're that little It we that is we factory the getting felt factory against to be bit. so monitor. there. promotional in to really more XX% our is as were restoring stores the We that our But been brand more range do XX% believe business something us health could working that

that's We we're So that feel strategy to very long still future. it's something know our confident continuing monitor. we that for term but something want We to we faster could address in factory the growth in grow factory.

changed have locations moderate XX nothing's now, growth see We and right that. year-over-year, we really really

make about still very small business we As and that control. It's us still keep cautious use some about it, as we think grow business with continue sale will to very to flash to sure too we want want it's we inventory. for opportunity it online to discrete a under But to relatively look very be don't it the large. discrete old a that because we to business want at we want

Mark Altschwager

on perhaps there's you're think inflation SG&A cost wondering on the just a where is I me initiatives, more at some with or but one slightly last so year Thanks. cost seeing it having guide areas I the if for some reinvesting versus may one maybe bit and initial but your Thanks like sounds higher nice success the SG&A front if you're savings for the the plans? low-end

John Enwright

as we look not as any for as the really inflation seeing year. is out this cost the the far are our No, initial half of we remainder Mark of back John. Hey plan

that's of guidance. to $XXX within some are we brought million it We $XXX low to that seeing we the still investments end We expect out may that so the to million. fall why want make

Mark Altschwager

best back the luck half. for Great, of

Robert Wallstrom

Thanks Mark.

Operator

will question we Oliver on Cowen Moving and take from our from Company. next Chen

Oliver Chen

Hi, thank you.

on the towards channels you your of to speak channels path looking look other channels positive love you the visibility on progress there's comps have you opportunity focused could forward sounds how and most more thoughts map terms thoughts positive points, in get consistently and made, you're you which what on encouraging and would comps the the relative to like Thank of and the you're and may a at, consistently? achievability it Regarding would and road lot I data your that what you. to say

Robert Wallstrom

Thanks Oliver.

growth In the channels we're number To is a move channel for e-commerce business. in has area watch that as one terms say been our very of XX I our and looking we would full look that we the in e-commerce to over really forward that well us dramatic our to verabradley.com. to business flip flipped it's terms go year-over-year about second you of of business. on XX% clearance if year on were last business quarter And that XX% price just

to year really there being expect our that So will we've up that's one. into grow, that us business and seen position really shift return a dramatic shift next dramatic e-commerce set and so we to in good as move we

beginning indirect we that product are that see discounting to totality we indirect our the to thing beginning actions beginning in on took is business channel. see second to stop The we're all our to verabradley.com stabilize our in the in

of feedback that positive see and so from for is wholesale business the margins partners encouraging been improving, lot are a been in are that's them very our encouraging direct see. in just the we've early So trends getting we're which see, improving, beginning to to signs to sales our

Oliver Chen

and comfortable terms and DNA the your innovation balancing customer with time you're in science with pattern same the process thinking risk about Okay innovation response also more and art you patterns at on now the to how feeling that and are also the to managing the time, and but process?

Robert Wallstrom

is DNA has well, it a positive have nice newest bearing the have You the medallion really customer job done of know with work along We focused. seeing I is believe getting fruit. Beatrice team pattern. We're so results really market incredibly one to charcoal of our think coming the Kevin and done as very patterns it been

we really around progress about So making print. feel we're on the good DNA especially

sellers, Additionally of market from seen the year to a that we've the particularly team a of coming things travel category. new like is lot styles has innovation a will top things great been the there's and journey the lot within a lot really mean I to that of innovation brought example. backpack our over working around next be on we've rise out

feel that. about really we So good

the Additionally into bringing consumer another think you that area interest the see will to new we we've that's responding as continue been it's new has really fabrications and us. to innovation been so created market from fabrications

Oliver Chen

what inventory how impressive, programs think inventory Thank are looking a and lastly of you're the term that inventory to you. or speedier opportunity much of chain, thoughts and do you what will that Okay, has supply inventory basis is at? speed your on longer happen and is been context around an on some

John Enwright

with regards especially improvement of we've years [ph] the to this I course to see expect would see move overall demonstrated expect that But inventory as year-end. improvement out So the by wouldn't we over then year year. to I continued into this

quicker. on get in regards think I that definitely year think inventory fiscal and the this inventory inventory probably in we patterns, a right value opportunity tracking fast of to of it fast be at exit inventory sales we place us to some speed market rate by to I the grow time will a basis. is expect In go to overall there forward for we for tracking would products

things So there we at we and have looking certainly are certainly do that. internally improve I think we can opportunity to

Robert Wallstrom

we're is, add time. our working of China chain on; somewhat. us timeframe adding different going two that's that doing to just of looking One and into supply delivery of ways whole color we and parts manufacturing there and at chain bit have really more looking from as some Asia to down around the area the what different have we more collapsing diversify think one, move concept of at we're I other against we supply out the that things a little

us but against moving that's So a working ways up. that on bit of little we're making

The a work market operating made merchandise second thing product chain bring new that of core beginning that core kind the fast think quickly. a up the move a we're developing to around timeline program market and is to doing all to and of One which standard of and fast but two moving track what third was that John ideas, that, is of lot really progress probably to to track I so we time and is is get a on our new supply our of can. talking timelines. product really second for to of that has lot innovation, Team how our

area. So an that's

As as a so little lot to well just chasing this can moving thinner, see to year a a last previously our inventory we as been little than that's encouraging and we move as sure more help forward bit and historical to that that make assortment chase best level. order we been inventory to business stay We've doing over tighter bit sellers. opposed reorder have a our of will

Oliver Chen

Okay, best regards.

Robert Wallstrom

you. Thank

Operator

Moving Group. on Telsey will question our from Advisory Dana take from we Telsey next

Dana Telsey

congratulations progress. and Good on morning the

full see it a higher is look the on we you for Thank full replace and revenues As store from would to and do the was the happening price just price eBay into do it you. in eBay who the you of channel? purchasing, differ you exit they are department brand new how mentioned percentage update and that, with those say coming how year, of that how an for are would customers the customers, core, much

Robert Wallstrom

being the let base. price look has standpoint From been see if innovation, driven to customer store. encouraging the by so and enter at the new jump into one verabradley.com demographic free to it's work, those encouraging is into our Dana, terms particularly some That a re-ask. new I very been see. full what at broad the come new still and few brand feel please all fabrics forget really new of it's as customer of But line first we ahead of of in the looking been we've she's the to questions, pattern customer this Thanks me go and in full

we've standpoint been great out from an see so still targeted of So, an consumer But which that's income a an which One broad communities very and beginning age is see some the I is we're broad -- we're always it's we pretty more we thing in. been encouraging. encouraged really growth still say very broad had is to been brand broad. continuing see by are attracted base continuing to outsized or a to from to and our of the pretty broaden should coming ethnicity consumer, ethnic

improving, I department sell--throughs store business, think business in what In we've that terms department seeing we've store our seeing the improving, been department of margins improving. been is stores

We store than see is moving direction. positive to department the encouraging it's a So better business more been. it in think that it has

And so we're encouraged by what we're seeing there.

John Enwright

through And expect our that our X% of with less regards than online to outlet. of eBay, to our some of overall recapture small we business eBay and part a was business business,

Operator

Instructions]. very Thank much. you [Operator

Robert Wallstrom

Okay, We well today. look… for thank joining everyone you us

Operator

We'll Gratia Foll question, another is question from our take there Capital. from Actually next apologies. my Kevin

Kevin Foll

question. the for thanks Hi,

Just a the of to just half we GAAP exclude for question out and guidance As back guidance half year? you the can the look from about you're year, non-GAAP the going of the in back adjustments bridge last seem and what was were of about like the and profits severance which didn't time $XX.X like marketing at costs, some I non-GAAP think in think etc. one adjustments inventory I there of charges recurrent, year really million the operating

guidance think So going could us the the profit half you be from are of operating just exclusions year as excluding back into insight guidance? some to the you your what about maybe for give

John Enwright

from Well, so saying are similar actually would we the year we charges was what we we exclude any we for provided. guidance have -- this them that if

in a the we on took quarter. had but from we we that So year Vision front me charge documents year have XX/XX out. and We in charges reform last half back took tax with legislation I the the associated fourth out that don't severance of had

that back year's half categories exited were from we had earnings. removed some which last of We of our the XX/XX we also part Vision that

of we of took don't schedule just are year would front if again there exact in have this but charges that we year, the out So them the me last them dollar the really similar figure make those we were informing charges to I move apples-to-apples.

Kevin Foll

markdowns if excluded so then essentially? are Okay, inventory

John Enwright

Inventory on take part part are took Vision part inventory we charge we reserves the categories that inventory of last that earnings. that year markdowns, Typical few of last XX/XX. year, is we exited no the normal of our

Kevin Foll

believe, was revenue excluded revenue but including inventory? the But I was the -- from the selling you revenue in right, the your cost

John Enwright

would obviously. If part then Or have we as just we some that included if of the of sold we destroyed would of exited that some inventory would we have yes. that we inventory not it revenue, include the

Kevin Foll

are you revenue I goods believe also going as the of exclude the part sold to of If cost you exclude should the adjustment? non-GAAP

John Enwright

Okay.

things… think of just I couple a clarify [Multiple to Speakers]

Robert Wallstrom

went year XX/XX we As we last through took very discrete Vision actions.

we time major that every would severance through a reorganization It had discrete Not kind that have from a on. we that's that we year this one spent included. of reorganizations reductions type piece of would that we typical of time exclude was severance staffing So we last the not year. our just in went and severance was

the And based category was inventory. a that specific it of those exits of well write exits As most were cases plan. upon very the in down

John Enwright

of And sales had inventories the not had in period. we those that

Robert Wallstrom

more these expenses this discrete so as this not at point major those anticipating Right, time. were We're at look we one year.

So...

Kevin Foll

performance. and look a just Got promotion in firm to was marketing strategic which QX for and of charge believe you pricing there I plan engaged and at a last consulting year, you was also

technically excluded? So is those that marketing expense,

Robert Wallstrom

through Vision review together. were to us the a full, outside we to resetting help wanted a terms No, that in how brought we an we basically consultant business complete look in it plan of was XX/XX of really put as

scope. it was business. of area of a definitely Vision spent they other So lot that our was the part one XX/XX a the marketing But areas was even of it it time it a beyond strategy time I really in, rework. lot wouldn't was reset, that way marketing of say in an more was

Kevin Foll

us in sales you think I the about mean And in think a on very impact tariff. the you of impact…? assumptions, bridge kind I that price the modest assuming through XX% offset impact how the get tariff, or Can a XX% to China, there $X.XX costs just you're dilutive of last that about you rising sort your question talking about are of the from tick you to walk $X.XX we how do of are of can just

John Enwright

to $X.XX any wouldn’t really in purchases year. at be $X.XX just to have year. impact a the the of the this those this would So, XX% We back forward if tariff ability would half of and looking to that happen tariffs rate current went mitigate EPS for we're

be So up it on categories expect cost China. we're XX% the XX% that tariff year. increases rate be that we roughly If would a to we absorb impact about XX% purchased tariffs just at a run this looking until was price at $X.XX would P&L that pure additional the through now through we of that's it

Robert Wallstrom

of why only our seeing the the obviously the inventory. a that full more what impact to time of tariff get we period year the earnings this of it's year a to part have a much it's impact that the because annualization you're a And modest due is we would short reason fact we and If to would fourth just be next significant of see than tariff. impact in quarter portion

John Enwright

on obviously that. we're we're working to mitigate -- working And ways also

that go So forward ways to for working on guidance we focus mitigate going absolute year to not next we're it as give number. and

Kevin Foll

Okay, thank you.

Operator

At to for or this any over time remarks. there back our to closing I are turn speakers no further additional would like questions.

Robert Wallstrom

for for to XXth. today. third you our speaking to you on forward We December scheduled joining quarter thank us Well, look call

Operator

participation will may thank you program. your And do today's disconnect. you and at We conclude this time for that now

Vera Bradley (VRA) 5 Sep 182019 Q2 Earnings call transcript