VRA - Earnings call transcript Q3 2019

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Operator

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

Mark Dely

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

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

Robert Wallstrom

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

again lowered once strategy, During business by the and quarter, year. we by Vision full execute our over clearance last price we selling against continued XX/XX to successfully double XX% our our digits over grew

are rate points. gross improvement margin with of third basis year-over-year quarter We XXX pleased our

rate end margin Higher-than-expected to under line below of guidance. that expenses due in with shipping expectations, gross was guidance. margin expectations. offset low our slightly SG&A modestly our expansion, were our the some costs margin Third modestly a quarter brought overall earnings our at rate primarily were which below guidance our of and revenues

year performance expected dramatically of our adjusted could clearance level we verabradley.com sales and stores, bit inconsistent. we that be full-line this in As a the on

While clearance performance simplified items we negatively full-price on as stores, by accounts third third-party sales have liquidation expected particularly impacted promotional key responded and affected channel, In quarter more key see our to on selling strong which holiday were promotional of the and softer and on over focus Friday focused messaging also peers the department Monday, less our our October our and weekend performance, not Customers than has as the clearance. more we Cyber we to In affected over impactful of other Black weekend. as factory were pleased sales. product. as our some expected, been indirect levels and lower store on

sales recall of elements; Vision key continue we cost XX/XX, progress delivering reporting monitoring our flow reductions, and customer selling, and generation that SG&A cash to As maintaining our and on on are routinely implement full-price restoring base. four we

have We months. nine made last excellent the progress over

just reduced clearance verabradley.com I we XX%. our noted, full-line and stores As over in by activity on

innovation driving our increased newness appeal. our XX%. channels also brand these and Product approximately full-price We in are by selling

management and diligent of reduced and implementation through cost meaningfully of XX/XX have We Vision expenses sales SG&A initiatives.

by and stock. common increased have million XX.X over investment our year-over-year repurchasing to of balances cash while million million We XXX.X XX

is from down last what primarily Our reduced due year activity clearance expected. slightly remains to customer count which we

pressure the our on In some addition, channel putting in count. continuing traffic issues are customer factory

is higher in to a through enter expectations count We are exceeding on and percentage stores are happy purchasing. though our that verabradley.com the full-price of continuing new customers our full-line brand and the customer

to the call turn to results John outlook quarter review will the quarter. and over John? third I for fourth Now, the

John Enwright

and good Rob, Thanks, morning.

for few highlights a Let me go quarter. over the

were quarter statement mind consulting in third low store XX.X net and and other Current end year impairment, prior keep range our of numbers million that non-GAAP income charges. guidance quarter, severance, million disclosed year segment from of of the the are exclude at sales of discuss this reflected I of As million. related direct to Remember, to net promotional the the quarter of the quarter events. totaled third timing second the XXX.X movement third year Prior quarter million. approximately the year year X last revenues sales XXX previously XX million to

quarter million, For year share year. per current net of million income of diluted third approximately to mentioned I we posted The $X.XX. the reduction quarter, equated charges share just X.X or shift $X.XX EPS $X.XX year-over-year last event compared per diluted a promotional X.X diluted or to third in before

Third XX.X% the XX.X% offset Comparable and sales, totaled quarter the from store by year. shift, in direct which prior million, partially XX.X an revenues quarter, new growth. the decreased for event segment e-commerce including decrease XX.X was million

Excluding the sales about would comp event X.X%. shift, have declined we estimate

reduction million quarter a negatively the third stores in the both comparable selling orders verabradley.com, well digits increased revenues were previously in quarter, activity. in accounts as year particularly full-line totaled expected, smaller by presence. those reduction mentioned of a certain a accounts, XX.X store decrease reflecting department Indirect segment from specialty by third company’s prior of impacted and XX.X quarter. key verabradley.com double sales, in clearance as Full-price As and from million, on XX.X% the the

related net sales, in were or million, compared operating net million. million, XX.X% SG&A income income of of the XX.X% XX.X% changes, stores, net year million, compared third Gross quarter of expenses sales, of million, third sales, to and prior profit in SG&A reduction Operating the current XX.X increased of quarter, margin sales the prior the compared in full-price primarily of to basis XXX income XX% million, third By range non-GAAP in of or in of or the SG&A or activity year’s to quarter. quarter. of XX.X% on non-GAAP profit was quarter, was XX $XX non-GAAP to a XX.X product channel inbound of Third of net due net sales income sales, year-over-year gross and of reduced cost. income to year. or full-line segment, direct year or quarter. compared gross sales XX.X% net XX.X primarily prior year to compared below modestly guidance of of million, non-GAAP XX.X% current totaled in sales, totaled XX.X% last third costs. was net million million, of or million, clearance the XX.X to X.X XX improvement operating operating XX.X% the XX.X% million non-GAAP in income or X.X% sales prior XX.X XX.X% a net the company’s in selling guidance to third shipping point operating year or totaled higher-than-expected The operating in within Indirect mix XX.X net million, to or and of expense year. $XX XX.X verabradley.com

and third the million, me let the Now sheet. turn and X.X Net nine capital XXX,XXX spending totaled months balance respectively. to for quarter

XXX.X We of original quarter spend X outstanding investments XX million was end. that cash million Cash, this plan authorized expires on million compared Subsequent our last the expect our of range of repurchase XXX quarter. to end principally quarter end the XXX.X a new million December Quarter-end inventory guidance within at share about of compared XXX.X estimate to million to million. We due end and $XX timing. to third equivalents, million year’s recent Board lower XX third than quarter most authorization during in to year’s totaled at our $XX million at last year we Board XXXX. XX.X the million our CapEx at quarter-end, and and debt had to million completed meetings, no

to three for and things outlook. let’s full Now keep in There year. fourth turn the are to review our I our quarter mind as outlook

The exclude the although planning year First, any would all guidance numbers also charges. numbers fees, similar and previously legislation are charges, non-GAAP and year estimates exclude store charge, potential disclosed are impairment tax other charges, time. severance at non-GAAP. none this Prior reform expected charges, there consulting current strategic

contained approximate quarter equating that gross Second, guidance into from fiscal to per the incremental China on a fourth in tariff an aforementioned basis specified impact effect XX year goods to share And went and X.X fiscal margin diluted point $X.XX net million XX% earnings includes increased fiscal estimate week by September the and in prior that third, revenues additional contributed per year extra the for week. $X.XX in XXXX. the We approximately year XXXX. share an diluted

sales largely million to million. of year we XXX compared decline prior fourth sales quarter, fourth net driven XXX by XXX of is clearance reduced the For million The to quarter expect sales.

our the decrease We fourth in expect segment down with the believe low indirect teen direct sales low percentage flat mid with We be net quarter. percentage e-commerce year’s teen will mid including prior to sales range compared to the comparable to be sales net prior including range. a approximately in year,

higher the the by million year. savings, that in last quarter third percentage Keep of we offset compared be increased year’s to million the so the seeing shipping quarter selling, to mind non-GAAP now as expense that fourth such XX% factory expect are as between improve year-over-year made-for-factory expected tariffs will at and gross Factors non-GAAP XX.X% operational increased SG&A expected sold We improved full-price costs. partially products least and a be channel, China to rate within inbound of and between is reductions of expected million. SG&A quarter XX.X rate, SG&A of year, second compared XX/XX we we are XX.X%. expense to margin reductions realized last XX.X last the SG&A not and savings Vision of range this year’s significant are began XX.X as anniversarying through in to

$X.XX. to XX.X a fourth quarter. in We basis, prior diluted was On fourth income year or adjusted to $X.XX the non-GAAP per be million expect quarter $X.XX net diluted share our EPS

$XX year-end year range fiscal We $XX.X expect inventory to be in to million compared to at last $XXX million million at year’s end. fiscal the

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

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

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

We have narrowed expectations range our full year from $X.XX. to $X.XX to diluted EPS

diluted last $X.XX year. non-GAAP Before EPS totaled charges,

fiscal million We continue in to expect to to operating of generate XX cash million Rob? XXXX. XX flow

Robert Wallstrom

product, channels. to distribution a me our and Allow John. Thanks, make marketing comments few about

we and are our the Through refining this characteristics analyzed product. work our have and successful DNA updating First, continually determining we performance pattern of prints process. historical most our

We and teams development reflect customer. comfortable, charged but tightened pricing and around and everything and The guardrails categories, our fit offer and have we casual patterns bringing are modern to attributes that with and design designing of and implemented cater criteria signature product must market patterns traditional these to on-trend products our affordable.

patterns most mix our art customers Solids and science. and or more our is signature performance pattern consistent assortment becoming of paisleys with overall our we resonate predictable and and and florals, medallions as

focused are our on XX% revenues. which very top represent XX of styles We our

revenues group exceeded quarter and XX generated from last Third both top the plan year.

category exits like and jewelry moved strengthening to in travel and our also franchises have like core from category fragrance back-to-campus. We dominance

to styles New adding this fabrications dominance. are in

it year and offering accessories. a of know, Bradley back-to-campus this a backpack coordinating our selling successful curated very As period is you in was Vera with myriad key thoughtfully for

a our We our verabradley.com women’s top our and during as from increase the all backpack excluded full-line our stores digit And one back-to-campus in the selling of solid also saw three full-price country. backpacks in the double bags on we period. sales lunch maintained and in companies and of assortment clearance position

the program by XX and around supported other brand. over Our media gave activation and favorites a on we students. Game visited in our of create on with were back-to-campus brand large the universities Vera or Homecoming of ambassadors like backpacks, campus where during key away efforts On-campus our days throws X,XXX Day Week, campus social events Saturdays help lot to our robust helped excitement Bradley

We licensing existing continue relationships. to strengthen our

into apparel For one example, apparel fall stationery expanded of this we added healthcare the in Canadian largest market. to Canada, distribution retailers Staples the Mark's healthcare and

that brand additional look also that for and collection in work next our extensions fall. spring licensing soft will will to opportunities, introduced our be lounge the will collection We bath debut through appropriate continue like

store number As with and Springs Theme sold create Paisley we one September discussed Merchandise to novelty Park This four Disney full-line volume pattern limited in launched just last our Disney a quarter, we exclusively days. called edition out in collaborated early Celebration. Mickey's in

more Stay bag patterns season. stock Zip their adding inside even we collaborations or XX backing Late quarter, matching mixing message Hipster, are holiday the Customization customers launched by the We for our tote creating on third Triple own personal solids can are the where fun design in tuned. horizon. and product an three Duffel, the and or There embroidered patches. bag shoulder

We have a place but new monogram Customization some personalized whole for takes had in to personalization time level.

site great Customization learn they While our visit results design. are positive to Please what to us, initiative for a very about product. experience about very gives early Customers Customization new customers both would the Customization to opportunity is and process. check see the a them Personalization the and in from reason is our a encouraging. Web like and product and visit verabradley.com are out

reducing stores dramatically strides especially on activity the digital flagship in We and in have our our verabradley.com. full-line made clearance great

Moving Vera flash has The Bradley merchandize model a sell and selling a been to site clearance manner. outlet key. more allows much the online majority site transitioning of more our our at in clearance business us discrete to our to through full-price flash remaining verabradley.com

and manage performance gross to to its margin improve clearance sourcing of This rate optimize with to continue us substantially distribution revenue. We other efforts and activity combined the level reduced enabled year. this monitor has will discount in

sourcing very be a China negotiations. experienced team us. concern global at a for tariffs trends continue have reacting to Like We retailers, most adept and to

the aggressively impact. increased been have to Xst mitigate a the been companies have two-month March we While potential working reprieve given until on XX%,

and with the targeted in awareness our on on Digital in production China like area, decreasing year. brand In of Cambodia. productions year, focus our increasing next are our to engagement. XX% XX% the with but be At continue countries strategy about media Vietnam We to digital reliance social end marketing will and this and First China efforts increase we about a dropping

continuing initiatives our of part community focus our media and and women engagement social support As and marketing charitable we particular children. plans, on are with

tools and in quarter, Bun the Michelle the known Backpack provided LA; in giveaway a with During they several events Sarah and XX,XXX the our by us. hosted events Chicago; Geller Blessings personalities including need Shawn the Jason to Music Aldean Nashville. been amazing this a in had on the over million media were Olympic cities, communities Johnson, program well year. in quarter, garnered see has we has star school in for impact It a serve Country Backpack at-risk for program children during third these successful gymnast, XXX record impressions

XX On in the close closed full-line store full-line front, nine expect quarter stores year. stores this we third ending the seven with now locations. fiscal months XXX first We to the

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

can sales that if see and over improve However, locations, the closures performance we fewer for timeframe. operating targeted

We with are experiment formats. store also beginning to various

in Washington we For opened Union example, Station in September popup in D.C. a small store

a new great customer emails. We has been population our commuter it have to the been way and able to tourist assortment cater and to capture

huge Center Amo purchasing conversion demographics leather We full-line store areas emphasis. up last comps months, with of or of and and localized investment in happened marketing the assortment the solely design store Torrance, the travel assortment a struggling the and store trends Del and the no customized California couple by also in to customer In two incremental focusing the of this changes. Fashion on and in located took are with

continue successful, includes to XX in we early stores additional We will results third we the year. in test At the Amazon Del factory year. business, in new indirect locations new will the of show is to aggregate In continue quarter, of six tourist Each our strong next growth. of and stores high-traffic the concept monitor to exceed this Amo’s end which if and side the continuing expectations. the operated are factory openings locations

were reporting just some Giftbeat, most responding. exceeded the expectations. continue Vendor publication next We gift healthier are the that premier Bradley contributed very executing bottom order an to for We trade customers Vera and our brand to we recovery our the are business the placed in seeing sales period of and that our our lines. voted the the orders and as to industry, serving for results pleased where specialty XXXX, the vendor stores’ channel retailers become completed much summer as spring Vision given Year XX/XX, early the award By and the

a creating foundation and are business. operating solid We for performance future improvement the our of growth

We me Our talented now exceptional continue to about Vision team, make Operator? brand, XX/XX our very strong the future. balance loyal to customers, call plan sheet strategic open and will excited questions.

Operator

[Operator We’ll question Baird. our with Instructions]. first Altschwager you. Thank from Mark take

Mark Altschwager

rate in like quarter-to-date. you’re but taking what like relative tough hoping decelerated traffic looks Good just maybe bit a there, I it the selling terms QX? talk things to recovered Thanks in the It conversion you about was Great. morning. of of versus full-price was could some question. for seems quarter. And drivers my the have seeing little October particularly

as any air just you the what October? that pocket So sense drove in of perhaps hindsight quarter,

Robert Wallstrom

Thanks Absolutely, question. Mark. the for

in overall. that in You’re saw business a definitely we absolutely October the right softness

is cold a to during quarter, third very big digits. have in So we the were back-to-campus since don’t we have bounced happy a we’ve strong. guidance Really the business with into What’s still October weather think is season, driver we we out. where September. The had to drivers August selling, key kind October a in still about the overall performance double But as very business and quarter, we up slowed full-price the the laid us headed if happened very in down. you were be back the that which business. continued our strong of is holiday don’t

of gift and during October lull. during big Our are little beach, was bit drivers during a back-to-school, a

see had overall than much anticipated in the very of beginning launched Vision full-price year. still full but XX/XX in So as we stronger slowdown October, a we strong we price selling in and the did

So very we price how is continue trending. feel to our about full very, good

Mark Altschwager

fiscal clearance holiday development good That’s mix in a be to has great. relative what really been consumers appears last saw up pivoting into to to even product the And year, spot. XXXX, then and cleaned

XXX key So see XXX million growing off And of business you to feel is do the for level? to million what moving of forward? the that base this brand as you in really do revenue sustainable kind drivers a

Robert Wallstrom

Yes, a couple of things.

forward and guidance we that obviously I in had we one, this expectations growth the kind are was and through would XX/XX, year move continue year that yet but move haven’t the we of given year be move we we the would Vision reestablishing we to foundation for that think, execution our next expect laid out of XX/XX. see as into increase modest next to as Vision

more still merchandize obviously in, franchises dominant the continue consistency on. the in next same organic begin continuing then these we guidance. back-to-school, brand. in to about that continue we’ll we that we’ll we gifting all and into that more We overall that the on we of to believe be are of talk find to in in can that brand expand as the are continue new product next And areas we’re just for see too, grow. to to in get build growing, get customer of how how as categories the believe So do going first year and year assumptions see set growth solid the to in into beach, that really key year’s travel, opportunities is brand this we move the we we If we to we the clarify

we forward a next our to as in we status. grow you back sharing a our return initiatives and to with year, about call. look hear those into to the business March move We lot it e-commerce how growth particularly relates As you’ll

Mark Altschwager

net one like in that does a it one been for context, have think if Just That’s the pressure. me, could, how channel you is but really you cyclical? on last basis. And of comfortable one to I area structural continue where the helpful. doors opening channel some factory I’m wondering see factory is sounds much the versus that

traffic So promotional given seeing just and to thinking any the you’re continued whether strategy wondering your pressures just change there’s that been there? to

Robert Wallstrom

Great question, Mark.

begin of factory pricing our is handling little of one one move in the bit see We were the the that we discounting peers. competitors as through of channels. how year, factory went this the they we we through kind I our had in the been terms would to think become marketplace level a from as hoping watching and the we less were watching year

our not have has that. our We we traffic seen on definitely had negative as a well impact sales level. And that believe as particularly

and a if activity. that power So customer should moving into the next we’re believe at something promotion move we to we the have year bit the We is still the sales stronger. the look be what rebalancing taking use promotional that another line move and little

our channel outlet as still with long year. plans So for we’ll share do we opportunity to whole, we profitable provides term channel a business, next for us. the are an have a more channel to but that as that pick But a and watching finalize customer highly the believe opportunity for base up we a new great a

So really on our we that. changed thinking haven’t

Mark Altschwager

all best Thanks luck. of for detail and the

Robert Wallstrom

Mark. you, Thank

Operator

We’ll & Steve with C.L. take Associates. Marotta our question next from King

Steven Marotta

morning, Robert John. Good and

year year, there year that given been that and are standpoint additional affect Just have any other this and words, haven’t ask the regarding negatively exception would store specific the closures Is those a year top next any would other full you with also that was promotional internal closures obviously executed to you In see year? expected store know increase with big an wanted windshield line in of there activity from year, price. initiative other the this expect dynamic the are of to reduce that to and initiatives sales? ones internal exception the but to pressure guidance, I you that the next next

Robert Wallstrom

would store that’s absolutely closures, one The them. so biggest be the one of

year. over as a if of that and one vast activity, period talked said this we we the XX/XX it kind is of reducing laid about The clearance with remember three-year out being majority we other would Vision it we you do

still we of clearance. little have a So bit

X% next in the that be about sales residual we’re to of amount, terms numbers of expecting a sales X% activity around, of put haven’t material a highly – maybe exact not out. taking bit to but little year X% clearance of We still

would internal those to beginning a with headwinds activity really is really the dissipate headwinds, we’re and that more two much from. the but to setting foundation grow So up solid be feeling amount really of from us

So again, back really looking next to a we’re trying forward to to year. pivot level growth

Steven Marotta

follow-up Sure. current And one versus then regarding just there of to introduced. maybe was again and any year what patterns next during cadence expected patterns year or categories the this how not just Is freshness you question versus changes exhibited be fiscal but also product year? view

Robert Wallstrom

things. couple A Steve. Sure, of

I think any to one from pattern We see what changes next poor we’ll launching. year. call don’t major

month basically about have per we is been we So generally the one cadence. pattern launching right which think

We call do to so more in-and-out have type the opportunity I’ll though of to what do launches, opportunity some in marketplace very an quick micro some seen launches.

to So at we continue look that.

micro We’re collections go seeing what are and as excitement. down some create really the to interesting we path collaboration results

see that you’ll think I happening So of more year. next

see begin we year, to The talk about lot pattern. focused we a other going thing you’re that on next to launches have as product

a site about So is pattern. or email our you think experience, if the about of newness experience new Web lot

little product you’re think too. see and next bit that mix to to begin up talk to begin really I us going about a

introduction the about pattern function, to itself, just respond call So customer as what to the it’s pattern purpose, not the product product we’re the really just opposed actually I’ll the seeing shape, the even because but introduction. about stronger

next you’ll But begin a be overall change year. cadence another I of it to way year. would to similar little bit see very that’s So to this expect that

Steven Marotta

Very helpful. Thank you.

Robert Wallstrom

Steve. Thanks,

Operator

Cowen [Operator Instructions]. Oliver We’ll move Chen and Company. with onto

Oliver Chen

Hi. you Thank much. The details really very are helpful.

articulate in when in expectations, did as of the to end come the in do overall you channels weather your your you. what your think opportunities? can an as And most face to assortment, of did of volatility are of which you about you mitigate on So well? the terms try just Thank fortification basis lower revenues at had what thoughts

Robert Wallstrom

Thanks, Oliver.

they of of third relates we’ve look in quarter, of the think reduction. the all all the channels had most in I that first going pressure lot – been if a you to at through it clearance what terms

channel, on volume activity, using So first clearance pressure our all indirect reduce to because we the drivers. continue of channel those seen were businesses indirect clearance in there’s of some as some as that we’ve

a one a of been we deep saw industry the be lack pressure the into channel would say we just very Those that jumped as bit to in that of clearance experienced pressure what’s promotional And I most not game, is are two we factory areas second we happening in activity. talked continues in. and saw have little So indirect around that the the pressure the there. we about

As we think is about one, be going through see. to great reduction forward, of this going just clearance getting the anniversarying to

to promotional around build and going thing that’s move products. From really to we that factory we’re getting our be at make look look right we’re Two, us. to a to number next approach what going out going we the and we’re we’re of a do really taking So how core think We continuing close be kind product there. year. a in one year, sure this we help activity come month-by-month as demand standpoint, the into We taking of have nice is to foundation. clean

we what to more business, going And demand to of we’re business. beach continue back-to-school build how lead and in So take travel and October for look for; we’re really some one then us create really our months out really probably there. challenging business, at known our and our the

talking we’ll year. you come we about So be next to that there be will as more

Oliver Chen

the this plan been Okay. and around articulating And product. you’ve prudent brand

for line? the this improvement link key margins margin you to in our long-term drivers we and prioritize steady plan As margins, merchandize views the would on how merchandize merchandize

Robert Wallstrom

tariff China One, an of this issue obviously unknown. things. bit two a think I is little

make So I to forget that. to that I sure just mention want don’t

be which pressure few that continue that cost outperform a sourcing, chain. line. could out margin long really find we’ll good design, our just term up enhancer. a product the from clearance putting drive will against Outside just also that continuing complete of done business our to the from things. well continue negotiation to be clean supply team believe direct squeezing is So a activity, a job the what of – of We obviously to product the margin One, will out of selling full-price from to has we’re margin to that very itself, in ways doing both enhancer. continuing sourcing be consumer cost some And as which standpoint a as of obviously from

and consumer So more sell goods, be drivers. to through those to savings at going will the that I of cost to price that continue we’re continue push into full expect direct more to continue primary move

Oliver Chen

Mark being Thanks. Factory what’s helpful interesting despite with a environment environment in been a asked promotional and Okay. a view. multiyear consumer about healthy factory. And tough question to respect a our channel has

will what your coming are feels And towards inflow around expectations even It and promotional like anniversarying well. be factory in continued could how may a though behave? we’re could factor over risk pressure So time? activity, competition as there be what there happen

Robert Wallstrom

think couple things. of I a Yes,

activity I think, get one, but lighter. channel robust promotional as we expect growing channel not one. not we look Two, do at to the a channel, solid factory a profitable

hoping And so lighter. it would get through we we’d I be year as the went would say reset this

we’re going year, and next to react going assumption it’s I think that. to plans appropriately we’re for lighter going making to not to as we’re the make our get

one, interesting domestically. I more an think driven tourism business is tourism for our us because right, is

So we tourism do domestic business. stronger from a

one number in store factory Sevierville. is Our

don’t look a have tourism. brands and at tourism, markets same some the than international the other different we So of to do exposure the international for it’s us the bit little that we as

the not domestic market risk for that is high continuing We tourism very to So be see strong. us.

Oliver Chen

ahead the would you lastly, reception existing business of as like-for-like pricing And you mix and feeling both in on pricing your that as opportunity are think architecture portfolio, you and and thoughts ahead? on to the about applies see your your you. Thank your elasticity across overall of terms how and consumer love evolution, what

Robert Wallstrom

That’s a great question, Oliver.

to openness think, more been we’ve as have move pleasantly in I of surprised appears there long the that to that prices there’s our bit things up to value a first little from as all, a done the in be product. consumer this great allow we year few

within that backpack of So example a the have great we is category.

of Backpack put which one was of would in same for low-end market we most we test give well, plus the feeling that bit did. a We did weren’t too we’ve backpacks launched that to starting when go a expensive put the standpoint, us. real that sure launched we of she our First that a out that backpacks the our all, market space in a from consumer us exceptional Journey are At $XXX but time that backpack ever pricing high. little

more our was And our so of dramatically did backpack that of below simplified kind we a expectations. and back-to-campus version

how believe really it innovate valuing So in both the really a do all at of and to our pricing in room probably that probably continue we’re putting as pricing is our at little push to year, what we to product look we consumer looking there’s pushing. into we’re and there’s us of opportunity shows next And product on across categories. bit

price would next expect increase into moderate as some we go we So year.

Oliver Chen

Thank you. regards. Best Happy holidays.

Robert Wallstrom

Thanks, Oliver.

Operator

any back call will queue. I no Instructions]. over for questions we further And closing turn in [Operator remarks. the the Robert to Wallstrom have

Robert Wallstrom

XXth. us for Well, today. to We earnings our March you to thank look call on speaking scheduled on year-end you forward joining

Operator

today’s ladies concludes And We that and once appreciate gentlemen, today. conference. your again, participation

Vera Bradley (VRA) 12 Dec 182019 Q3 Earnings call transcript