VRA - Earnings call transcript Q2 2021

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Operator

Good morning ladies and gentlemen. Thank you for standing by. Welcome to the Vera Bradley second quarter conference call. At this time, all participants are in a listen-only mode.

Following the presentation, we will conduct a question and answer session. at for provided up to be questions. for will that you time queue Instructions

today’s is conference reminder, a As call being recorded.

Now call over Chief to turn Dely, like go Bradley’s Please Administrative I Vera Officer. to would Mark ahead. the

Mark Dely

Good you joining thank call. us like earnings for Bradley’s morning welcome Vera and We’d to everyone. for

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

Robert Wallstrom

and I to for customer agility, joins and proved today’s cash by sales in We driven control, results, Pura despite results, careful leverage Vida our and joining full quarter sales new the pleased year-over-year Thank you team year’s me what our and Total Vera company. results ourselves revenue managed decrease both ingenuity can due our and extremely experience promotional emerge achieving Bradley’s doubling, on Mark we controlling of and revenue product company am ecommerce of masks CFO that of the We for offset that morning exceeded product through headwinds growth. for Bradley carefully we expectations and in the the and enhances making flow, expanded by I store collaboration with XX% the us good a by of which We customers to strong to produce responded sales drove you tightly can these John of quarter focusing Vera strong At thank and initiatives COVID-XX. store masks, facing the closings performance Bradley and in significantly today. credit quarter the product Enwright, a and cotton second launches call. tenacity, of marketing grew and activity. related rate controlled expense quarter on our everyone, COVID-XX our stronger quarter. last also margin expenses, our technology gross innovation by a position reality. and meaningful a entire drive management, collaborations, for marketing cotton revenues quarter. Pura consolidated second Vida, Vera a portion inventory addition

protocols. quarter by with hours, end, full stores factory June. factory three end the and line but although XX approach staffing million $XX.X of customer after reopening full levels, and cash open XXXX, Vera and as of All XX we million. the of sheet of On phased balance ended X, stores and we second reduced stores stores down XX paying began remains stores with strong. all were quarter, out open ABL with $XX capacity Bradley lower Even the during investments a our in and Our greatly line XX enhanced May facility on safety our of

the data, of limited in sales. a on approximately are of the While XX% of no that aggregate month XXX prior the open existing were future number July stores growth performance upon making based the of year’s generated assumptions entire sales we for days fiscal

traffic us to down outperform While was level, significantly traffic the increased units trend. allowed typically transaction more sales conversion per and than the

business, was that very stores even consumers reopen. in and pandemic and combined, this strong the Bradley the more know competencies on will a as environment. Pura digital are shop ecommerce in Our Vida new important quarter have impact Vera lasting that We to the even act began and way our

share infrastructure in ecommerce investment of has continued acquisition our with Vida, Our future. ecommerce revenues, site for native Vera well us Pura larger and positioned of company the total being digitally resulted our in which a along Bradley’s

those and so center working for appreciative associates part-time a lines delighted this distribution keeping extraordinary our our are our distribution and bonus been our prorated in center, have that in associates and We quarter team of customer during were and on time We and are full are thriving ensuring business working $XXX a work of provide the for quarter in that full their ecommerce our having to time. safe customers service our hard to all members and front for especially great dedication the associates our portion thankful stores experiences. the and store

All indicative of great have brands. of this built we dedication both and is our of nurture the culture associate at

our again about are associate our indicated engaged once recent passionate associates highly Our company. engagement survey and that

building enhancing want strengths We better and diverse striving of a and of our to a part more environment, even we history build although we inclusion upon a is this key are and diversity our an and inclusive community. build do have to always initiatives,

a to members represent project efforts, diversity in and inclusion We have manager the launching quilt formation long the beginning in whose committee time diversity talented our diverse appointed communities and throughout a we serious associate to of and a our starting our equality of company take with diversity, organization. and we but Bradley thoughtful is communities enhance and only our to to Vera This continue lead across want serve. as efforts, the actions and inclusion inclusion

community look forward associate we will customer and three to We on areas: the updated you and keeping key our progress. the focus experience, on experience, experience, the

Now over the review the to call me let John financial turn John? to results.

John Enwright

and Rob, good morning. Thanks

highlights a for quarter. the over few Let me go

results have beginning are Vida period first As I XXXX, been discuss Prior full non-GAAP. have The acquisition. today a reminder, to day will include the not consolidated numbers Pura July numbers been following XX, the all financial restated.

a over expenses. non-GAAP the complete the asset exclude For Project non-GAAP intangible The Vida statement today’s reconciliation current exclude prior of release. the numbers year net attached statement quarter schedules to quarter Novus EPS to income increase please press current today’s also related non-GAAP second income in for and year the the and Project the the Consolidated acquisition totaled charges $XXX.X a year current described new Pura adjustment million ASC of for numbers prior reference revenues expenses. amortization Novus The Non-GAAP the an year. second for GAAP measurement quarter excludes quarter, numbers, release. XX% second for

$XX revenues Vida, revenues XX% totaled a from million Pura the for net Vera decrease Bradley masks Excluding $XXX.X represented prior of quarter. the over million, in XX.X% quarter. consolidated second Cotton year

$XX.X and million Vera factory months. in Bradley accounts. indirect COVID-XX compared $X.X Vera Vida a share in Bradley the incorporated non-GAAP second revenues the to increase that million, partially $X.XX a opened consolidated decline income post from for of offset second Bradley to direct from resulted prior totaled $X.X revenues totaled and the million share charges, for $XX.X which the the revenues per or last for half per quarter. million in segment revenues or the second a year number closed XX reduction diluted Vera quarter Excluding totaled XX orders and prior net XX.X% partial compared from an year primarily five revenues We in $XX.X last primarily related a XX.X% year. diluted $XX second department quarter. quarter, to million closed acquisition. or was the quarter, COVID-XX the store stores million $XX.X temporarily stores decrease year, approximately in full represented segment by were $XX.X in result prior million, line as The decrease ecommerce million stores segment of reflecting period for of Pura a specialty in XX.X% $X.XX

year. by Second quarter year Pura Vida in second current or a consolidated year second net gross non-GAAP expense on SG&A for or $XX.X consolidated quarter XXX added million basis, masks points. net totaled the of quarter. margin sales percentage On a compared basis inventory million prior $XX.X gross management, tightly in year XX.X% and for revenues and current expanded promotional gross non-GAAP margin XX.X% or prior nearly the margin through million benefited the to On rate of the non-GAAP basis, cotton of revenues $X.X points $XX.X significantly the to XX basis. net to or non-GAAP million quarter in SG&A $XX.X million Pura year. our of We last controlled year collaborations, current Cotton careful quarter activity. totaled revenues expenses approximately product in a million Vida the compared XX.X% the basis of contributed $XX.X XX.X% masks,

additional to year. million or these continuing Pura lower permanent totaled related million income COVID-XX or year temporary current to reductions operating make expense related XXXX expenses a consolidated predict. primarily Bradley net prior extremely non-GAAP the than COVID-XX. difficult expenses, XX% second revenues uncertainties SG&A of fiscal to and Vida performance $XX.X Excluding The basis, were financial X.X% last $XX.X Vera due to year compared quarter On to

are not we As a result, guidance. providing forward-looking

masks predictor of not future be particularly not as may the the of strong should performance of be balance quarter the a performance Second for sales considered year. as

expenditures million $X equivalents as turn X, spending Now factory respectively. and related primarily at million the $XX.X Capital to totaled and approximately Cash, quarter. investments and for $X to of second million are $X.X logistics year enhancements. Net $XX compared the let quarter capital the the year’s $XX.X sheet. to totaled second million cash and end XXXX August expected stores total million to for new last me technology of months to balance million six and

orders company certain $XX in our $XX due seasonal to noted, much and balance news of fall the flat year. a cancelled ABL million The good apparel. to our the Rob the leaving inventory is the is million credit of and of not COVID-XX not for facility. second of Quarter was product second As relatively inventory last life balance borrowings million million inventory at has we of have year. of quarter, does expects shelf compared the future be facility $XXX.X to end quarter fashion $XXX.X The the end on outstanding $XX the repaid on of million

inventory, we always We to Rob? we rational and will as be as be. prudent clear try

Robert Wallstrom

Thanks John.

our additional August Plus best-in-class our our Microsoft platform. order business for intelligence POS, ERP, migrated existing enterprise management that efficient of work Cloud-based capabilities enable conversion to mobile our only and recent but as This First, a the not sites technology has provided on lessened us Novus, will and live. We to me experience. a enhance a the cloud-based providing our POS. entire work replaced ecommerce simplifying must Project dedication, than platform year went and our such future hard To complexity our systems IT quick our environment transformation. in streamlining achieve more be and Shopify to database you DXXX platform in In and early net let informed further technology objectives. technology update we the system decisions make able more with of to future, thrive and this after systems, customer

to we in harness about and marketing able Through are capabilities we and new our to be systems, innovation to these we instantaneously invest as our earlier forward. possibilities excited customer and feedback stores. the of build and more technology data will across systems capabilities product, We and will continue drive and move

added systems experience. our increase to consumer have our enhance and distribution center We productivity, which new should the enhance automation warehouse also capacity,

due and both Pura update brands. the our way Now an work two dovetail through dramatically well on we especially technology. The live are let’s comfortable and into forward customers Vera product has COVID-XX, and innovation permanently Vida on and our shift. changed and propelling remain and We brands Bradley and with to shift casual that that positioned brands focused marketing to this

me start Bradley. with Let Vera

continuing but remain to existing attract more innovation true more heritage, new our our is customers. and important will to to in becoming customers Our and and brand authentic products

a have our place and collection cotton to update fabric We fabric process to develop robust alternatives. innovation in

rated twill early and Our new for newest are highly the We XX by to offerings are our introduced just the months. recycled tuned full a more our factory traction and fabrication over line customers. of in our next collection, ultra-light ReActive, strong. results innovation are performance stores Stay fabric gaining XX and

new bring to to facets silhouettes continue also differentiated will the lifestyles. We and our and market of all styles meet patterns customers’ to

customers, becoming focus to our during particularly as is and Our our like key the our pandemic. hands-free products slings they cross-bodies increasingly important are

building on dollars example campus, A margin youth innovation franchise great every of since be which ramped drove up sizes, our have focus the in during gross to and and solids. and of and we cotton newness styles, long-term of Our masks to distribution upon areas continues dominance April, is masks and different our revenue our meaningful our quarter. day. key us for In add patterns we and manufacturing continued travel, then,

We personal process. in provide are our in we fun customers happy offer and a communities little necessary the the to and equipment protective serve color

see will our You in and also on Staples, masks Target, QVC.

the As of are lessens, the we masks see recovery COVID-XX the a in back to of impact also core to business. the sales anticipating in expect half we further year, the of but slow

is our shop. to which about Best year, in which time excitement so this our capsule offer for of and and special to Cat’s add month were collection, centered dogs. continue limited we the or Show Constitution guaranteeing customers Vera We to Pride our sense women periods course print Pride of fun wild to urgency anniversary Meow customers patchwork and vote, in collections novelty, our limited edition playful a to we tote Last sure seasonal launched around fan to the favorite. XX. right the recognition This XXXth on Bradley features Persistence of the a introduced debuted we tote, Amendment be XXth of Month August commemorate June, In our

new In launched our strength brand our collaboration These Gillette annual Disney we the in and Bradley and with newest media Venus product to awareness, increase of August the for are we with and introduced collaborations VeraBradley.com expand second test are that ultimately and alliances Target and We July, collaboration and our testament brand. attention, excite wide our on Crocs. categories. collection customers, our and appeal second continuing true Vera new both in through distributed brand enter a engage Sainsbury strategically U.K., strategic partnerships and opportunities and generate provide to existing reach, our

patterns Potter long gearing or Of popular the series Warner are embodies imagination launch collaboration to the includes an robes, Hogwarts they’re The in from huge Hogwarts this Bradley response to to holiday. This exclusive an quickly. visitors many the for record with our most also in website, and of Vera course, we spirit were Bradley. of sold whom In backpacks for out available day pieces everyone, which lanyards, has and home we the launch, solid were whether iconic Bradley accessories Harry many symbols are up bags Vera plus awaited the new of something for some school in Harry launched of captivating was of back in had Select had the a All most wizarding house. From time Vera items looking corduroy partnership we many success collection styles Potter just products, and the collection lunch more, reordering to consumer Vera Potter from pattern a with about simply Bradley’s our July. items for fans excited are the and with that each magic. and Bros and signature colorful bit adventure of to in We world. touch. collection styled available capsule Harry overwhelming

Let me to marketing, VB beginning switch with Cares.

our through we women organizations our improve our the particularly umbrella support The and Cares, we masks, organization, the meaningfully end mask over contributed One donate the Nurses. As of strengthen the of the who the bravely Response tirelessly charitable sold cotton working sale that an community and for position able such were Fund and July nurses Fund. of the COVID-XX of organization frontlines each lives through reinforcing Nurses VB focused support continued on to as cotton ESG initiatives can we of under crisis. $XXX,XXX a American company Through the Coronavirus is to of to the are percentage on to children.

and we on to might very giveaway food pandemic, affected a and are elementary chains surrounding and the Blessings, school able so weekends hearts. able specialty by workers all to making we provide Our year May loyal this limited to otherwise and in long. limitations support financial our across traditional treat Unfortunately for America gathering fighting those this the our with is plus near day we uncertainty this who sale individuals support for through Blessings and mobilizes very organization be customers the Shawn Johnson help the gold happen. year; East to associates our fall, great this resources communities, medalist, go collaborations are been appreciative thrilled the Backpack hungry. are of to school amazing backpack are dear to to healthcare have we our of not edition children Olympian This every cause our COVID-XX, year, with hosting however, provide to able under-resourced

teams on customer digital marketing our digital are focused Our growth. and accelerating and

data until positioned we Our the Essentially in entered the customer reopened, triple analytics to acquisition revenues in pandemic while an our return a stores unprecedented on business only change. us investments as doubled. operating as ecommerce digitally customers rose in respond science customer new underwent way quarter and year-over-year digits VeraBradley.com agile ad business and well spend on as

strategic marketing We in our a have real platform react teams uncertainty data to driven and by time. data which has to built in the enabled our allowed investments science marketing

we such during efficiency hands-free, healthcare washable as have to brand such travel and have centric masks, our attributable doubled revenue media We from data areas adjusted Using our spend buying, media and other and the quarter. and into products. paid away categories beach as programmatic paid

a during the these brand really data has to has We demonstrate challenging marketing back about times. customer Vera the that of the connecting for helped and been our half optimize team continue and our people spend mine always will Bradley year.

followers and across both engagement social have seen channels. new increased We customer strength in

influencer and includes user content. generated media increased strategy enhanced several Our co-branded participation, more social sweepstakes, diverse

drove fact, growth. largest Instagram quarter In of the follower user Instagram generated. was quarter content in second efforts XX% These of than more our

Our and only Potter, brand almost one most was Bradley of Johnson X nurses Baird’s have Shawn billion social over Venus, our COVID-XX media and and social In Harry like Harry media engagement July, communities relief during of efforts, collaborations sustainability our with in analysis products. of impressions. engaged quarter the positive East of Potter, our strong efforts exceptional Vera highly for media out trends and masks, revolve supporting recent and focused We and coverage earned brands mask XXX media, growth posts Earned our around had media influencer nine that collection. was work, The second traveling. to in markets. sales digitally social of in of year-over-year in at TV XXX% we on top of back on and traffic shoppers period. on variety school, drove our July, to this back and to test, advertising. backpacks we media keep release month-over-month ran back In streaming states those engagement another as connected at holiday to ad focused our The the XX%. first or for a planning ad ad masks are the foray mind and success coordinating to tested Based prepare services brand XX help to into

on Let me brief update you give a stores.

becoming Although revenue, our larger of portion our to important continue of be omnichannel our business an part strategy. digital is a stores

open our stores felt average our factory month In aggregate, centers have last July enclosed noted compare earlier, I in more in shopping malls. as customers in the As were of entire full on aggregate approximately comfortable stores the line stores the outperformed that year XX% than sales. of prior to fiscal generated outdoor the XXX year for

Bradley and shopping, feel believe As open consumers more traffic sales and improve. more Vera will comfortable retailers store we

by COVID-XX are and course, watch will to continuing Of accordingly. we cases react geography

fulfillment line on the both VeraBradley.com, customer in experience on factory our in full service and focus to continue our operations, in customer stores, and department. We enhancing our

available curbside in-store, Our to is, where whether she goal pick-up. offering ecommerce, or be by on exceptional is service appointment,

of Our COVID-XX again despite in of execution the satisfaction the and voice customer quarter disruption. scores once initiative customer related customer robust the industry-leading all our service drove

of XXXX service, time experience personalities customers’ of achieved experts deep customer its analytics. and quarter to Vera for advanced through understanding Vera Awards NICE, Excellence in experience, a noting This customer real a customer Bradley journeys as improve announced best winner Bradley

opened up bring our Beach, XX permanently the and We year have fiscal still full close productive the XXXX. line will South this of factory five XX store. Myrtle store beginning We total our expect to new year, which to during since closings stores Carolina full expanded line stores highly to factory

year. so closed We six have far this

our We in to and be conversations several rent and with landlords progress on negotiations have on relief properties. continue made our of

Pura native part excited Pura about every digitally Pura in Griffin Vida. very vision want Vida lifestyle. of talk day founders, of future and the for as about let’s the Paul, growth business confident of Vida the be the the remain Now We more customers to and

COVID-XX, did manufacturing rates total in by and facility the until despite continued and in Revenue a increase closed wholesale X% late ecommerce last Pura to revenues primary grow last disruption. weeks to in supply for over quarter, Vida the year. quarter For our conversion Due Salvador seven not over orders Average a nearly chain increased over was fully sales. XX% was significant year El June. and reopen driven

successful continued We further introduced second and have quarter we metal, several stone at Pride signature operational our for were introduced second hair and in selling than and traditional in Mother’s bracelets the We are product off packs COVID-XX, the and material our our special capabilities bracelets. into quickly. are launches, the sourcing jewelry string with and quarter quarter popularity to price introductions bracelets they a working good point and higher a like actively styles to our Day Vida our expect are style start. accessories to and Pura Despite mood, and production new diversify product, semi-precious fourth deliveries. and charms sources of continually expansion and core In alternate our raw have strengthen

seed of and jewelry, our like popular. bracelets expanding alphabet Our styles, are beyond and very beach bead-based bead earrings, kitsch daisy selection kitten the

them, our customers by patches popular their core above personalize choosing calls. a the pins. continuing special are the working bracelets trend. to board and on Customers Personalization never-ending to with continuing can Zoom earrings color from and signature can and expand items combination their We is key looks customize fun or like they for home necklaces

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We signature category are integral continue and Vida’s are our of expansion Pura part cause-minded many further the truly be charity to they excited about Pura growing as are so this lifestyle a an important the bracelets of program. customers. Vida to loyal

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sold thousands so of tens We that popular are they they these currently out. are have of sold masks, and

global third party fulfillment reach new wholesale for new We only launched entered us distribution many Earlier the for our is and others. and anticipate and customers but There to serve already year, have well again. to not as on will lifestyle. Shopify around to and the agreement into to Europe this expert international into fulfillment Europe the Pura world to out those customers taking products Hectic complement this selling the always and is in bring there. delivery allow next Vida to of loyalty are Vida our expansion distribution front. Vida more Canada preorders Pura is as We Pura ecommerce continuing with the extend is build ways business expansion our for expand come. we existing looking fans our an Pura at engaging an Vida capabilities customers currently

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to sell promotion. built-in top organic influencers several products collaborate and themselves that create We our also of buzz with with

diversity marketing We are working diligently add to and efforts. influencers our to more

up launches for have lined product several exciting We fall. influencer

dancer launch Vida Charli star, partnership style and excited to very are D’Amelio bracelet our with about a Pura influencer pack Tiktok We this season. holiday

marketing target New on has most paid making, Tiktok to the followers, organization. and our forward. cash queen and with was Pura followed to efficiency she expand products Even digital York demonstrated personality and mindset Tiktok creative of to with is by focus think the the responded Now dubbed management perfectly the initiatives, our fits and and margins, XX demographic while of our Vida over is us an million Times. the reigning unprecedented am agility, brand. organization and teams there and be remotely, up of propelling the I have cash. offensive maintained are created decision in to quarter, on entire have working digital, In it so flexibility I ways added that use closing, proud crisis sum us could our think to infrastructure driven has last innovation, the would words sales, four and expenses. reduce how Investments off I and drive Charli’s new

Our multi-brand powerful. proving more to is even strategy be

than at I right and we offerings casual are more both Now confident our with ever, in product the comfortable Pura Vera and Vida. am space Bradley

the smaller in live city open who from we call dressier more major is migration a lifestyle to are a from world, towns and lifestyle. customers to as the more even cities questions. now COVID casual beyond centers Operator, we a a major to will the on focus Our seeing advantageous

Operator

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

Mark Altschwager

quarter this Thanks morning. strong congrats my and tough for Good on question, taking a in really backdrop.

couple to things a the mask sales. wanted I clarify on of First,

you think just - on run XX% help masks, correct. you been sales then in I and been said the maybe back so said looking further like but August? you an quarter just that’s was there, finally know mix in you confirm the direct I total the between of significant indirect rate the given that of What what expect could that just half, provide in on to the impact, monthly moderate any that has it’s and

John Enwright

different anticipate but seen in sales. It’s significantly August more, go necessarily what now, we we it In we you be of to time little indirect, so similar about but of you’re the total anticipate--again, year. It’s economy a out. Yes in mask that XX%. looking because for be mix we number COVID the anticipate we to of to the segments, kind any sales throughout quarters we two some we split rate regards frame. if July it The have something to in the current the right to unpredictable, give to to we that of the quarters, that to Mark, expect and revenue, XX% run have as to unpredictability between commented not was future guidance to call back don’t it close going forward, is was forward going hard moderate above but with it’s don’t it and those values, me associated so think that the bit XX/XX it XX% the direct was was to,

Mark Altschwager

August helpful, the switching Curious of that’s think digital trended shifted XX% said number all the and was July. in That’s productivity, channel perspective, just a gears, has you. I you at stores reopened? thank as into store how Then if from move meat season, you of kind for with really the back-to-school

Robert Wallstrom

in the back-to-school from a XX% but store relatively kind say being know, the similar. that same, offset customers couple other a businesses I It’s of that’s One, of run been seen things, you a Yes, it’s some by driving - rate’s been business, the but the interesting have would we innovation performance, softness number. Mark. in that’s and

very surprises In terms digits, when go strong, remained that really the and digital that. at we I we of and The the we’re triple be reopen, quickly as we might something that through has stores holds. started larger that that how was didn’t rest of so one we year of of saw, digital, that that’s digital only that business because out our watching as would thought would to say see were kind up ecommerce moderate and

new really two what’s think marketing. was It’s things. driving through innovation I digital

instrumental is this that put how new feeling at engaged forward. that this so of digital place, that we’ve through is and so is has behavior brand, goes strong see some keeping the we’ll going we’ve into our shift, A, going as analytics customer an the ongoing, see we think digital seen We’ll of of watch and been well brand All all buying year customer how business across in, elevated part in that channels. the really programmatic a the permanent getting growth the consumer think the as customers be moderates, I that our to but point in

Mark Altschwager

versus period, margin that’s like cost with the the within various this operating mask quite more to Okay, more the XX%, picture of sales in this the temporary challenging which a really just cost some the by picture, versus Maybe maybe the really understand thinking result. the segments. much on factors, all Then are an structural basis? how to some help about on maybe quarter, structure any go-forward thoughts you’re In learnings corporate us just or profile addition bigger how bigger of in to business savings, the helpful. margin changes through going driven moderate, was the of general, incredible

John Enwright

T&E at year, remainder that do discretionary year look savings we as will going this for we travel, individuals was what’s let I store to regards believe next with percent spend, as just probably regards we XX/XX the were who closer not would about as think margin, our when some different with order there. the operating cut our discretionary we the of They’re think individuals, we we you commented plan meet I I but indirect into savings of there’s to a so utilize so travel. XX-plus some operating - think I having with quarter. in spend a so before. versus back look to corporate with little in benefit of earlier be as the and is it’s said more furloughed so SG&A technology to Yes, to have potentially having--some to savings individuals as sales. so in individuals me going some than being and the be we perspective reduced, and been In and that can to quarter, from higher correct got able something some mask there that to But definitely in think the XX/XX of little closures, a be temporary think only direct forward call Obviously well bit expenses associated bit I

from some you a expense introduced and We permanent continue and that. think margin basis. looking wanted that, gross the with go-forward operating sell we benefit be we there’s contracts, add the masks, perspective structures, associated some that perspective, we’ve obviously margin I associated masks, see should should to and on operating over we some anything, to to as some Rob? savings moved significant with are time we all down we margin at Novus, Project to as got to if to a see obviously really all savings going benefit don’t regards also In know

Mark Altschwager

Thanks luck detail. the this helpful. of Best for That’s all fall.

John Enwright

Mark. Thanks

Robert Wallstrom

Thanks Mark.

Operator

comes and Company. Oliver Cowen Chen Our with question from next

Kimberly Hong

about Kimberly questions. our for targeted this the current is year this inventory for are re-openings taking demand? uncertainty school to crowd enough Hong your Oliver. back to Hi, there’s that’s year? school the to you around repurpose if not on thinking given back you How school Thank this How would you

Robert Wallstrom

ability the always that’s season. going seen that’s example be to industry, October are school to Texas some change about lot for and levels. of school we concerned to have situations, not as very with moving our of we the Pura back there, and rebalance it’s definitely right business. an to the school, fall, back to for will future around, for inventory season. so seen to to to is Back Vera to schools, been to it elongated advantages, Yes of period so holiday lot that’s of for and and around--they also buy for whole is but the for bracelets packs school we Bradley that’s you the moving important the brand, and of happen the One important It Kimberly, lower thing do we’re can the the used right? think now going that really portfolio, a going think think a around softness teams potentially be in and expect schools soft. for and thing a openings, is business evergreen demand, not slow we a believe It August have on-order very business we’ve back a At to targeted One one that one if out be lot going part as period be and off we to to have product very in school them. drives the particularly run people program buy thanks our rush. definitely all in fundraisers we been where thing as suppression so start Vida sports now at a It’s backpack we’ve bag has the that to question. in of some lunch interesting we seen that be If they’ve

We it. think our get in for through get third similar will it to started performance, to quarter. quarter going it be and We’re we through second

Operator

your Does question? that answer

Kimberly Hong

- I you. mute. Thank on Hi sorry, was

year-over-year. Can this last over the from products Pura the Pura from math, throughout Pura looks Just Vida environment in Based indirect to direct that base you the this customer down you’ve Bradley’s seen to pretty resilient the also me. Vida’s millennial speak Gen year. transfer Vida, and and base versus like one segments more and on the Vera V the demand environment it’s been over were if

Robert Wallstrom

through we is in definitely couple the a their social which things. the the of channels, Vida terms Pura strong brand. on customer about Well, business, engaging engagement, are thing One, still very with so seeing we excited closely customer we’re is especially continued health, really all monitor one consumer

going lot a have momentum there’s forward, We initiatives so good there. of

that a loyal seen haven’t Bradley, is seeing of customer as brands, really push both still back. against terms been big migrating has both back followings. consumer separate they our In Vera their we not and very part and The strategy of brands have

customer plan individual both been their We let some businesses communities. always has to crossover, have but grow the

Kimberly Hong

Okay, thank you.

Robert Wallstrom

You’re welcome.

Operator

Our SCC Eric next with Research. question from Beder comes

Eric Beder

Can little online? seeing traffic morning, about Good you stores the bit expand twill? new you driving the congratulations. both base, those it and and and fabrics talk ReActive in customer a performance Are is

Robert Wallstrom

Yes, helped is there’s and office really COVID esthetic, brand, sustainability but the slightly been off the a things, first fabric the the that’s focused that’s as ReActive, it’s so to been has was continue what to jump a that to our adds is start, way. at another has from more very little helped Thanks heard been for, that bring twill, for product everything in the understanding feedback, continue something our the twill that bring strong product, also a question, focused us, bit We’ve on through we’ve very and really to been customer so We a really been seen a we’ve but has we’re business, go one Eric. encouraging. dressier less to a how younger, of lifestyle those see into real feedback of movement us after for another in that That growing It’s in think more innovations lifestyle we been will going in response. in receiving good you’re the that piece that strong performance into in ReActive brand. not new the future. both. very new rate grow adds customers our same customer from developed. both confident good large have seen going the Performance and to customers from customers, terms we’ve think sustainable little

Eric Beder

has other trying of accomplish at look cotton what haven’t cotton to I there? trying potential, that looking you you ones, are Vera done experience, upgrade, mean, always do are with to do? the cotton you to the been there obviously fabric what are so Bradley When you or the core

Robert Wallstrom

In with things happening cotton. terms of cotton, are there few a different

lastly, resonating It very really foundation really you will the of a in it If there’s wash focuses our all, our we’ve really for this important, very market our a innovation of you be it it’s into lot business, as been the all more what very we part. we’re part most But cotton say for focusing hygiene so Then where focus, really short franchise, dominant at new is still been in on becomes second as so too on. watch idea information washable term, move to we to comfortable, of cotton of right different for with our year, the seen The cotton our responding incredibly of hygiene, use period the COVID, and that. as innovation, on some therefore we’re collaborations. - can our is That’s during wearable. next heritage, cotton really our our improves our customers. really the fact of so look an it, well customer what’s innovation that interesting collaboration obviously, collection, consumer. piece bringing around well we the It’ really of is important with

Eric Beder

how potentially rollout Vida, business I of that next Pura test Is My pushed Vida that do the plans, question driving on you to know you forward? year. September going in back last Pura see the still in and as that store

Robert Wallstrom

But we wanted Yes, estate, up we there locations were a in have find make open to have were store world a this opened new Pura the but real to were to COVID sure for right months actually so we the economics announcements able we ago, want as stay that sure and to to that about deal. reality to tuned we we’ll and make obviously make next more than more so are Pura have the into out year, we We Vida. looking Vida we location. plans there over at year. right next changed, that bring excited move a still store Obviously few have

Eric Beder

Great. for the season. Good holiday luck

Robert Wallstrom

Eric. Thanks

Operator

you next a move is phone from ladies ask our onto We’ll reminder, over with Group. Telsey that would Telsey to gentlemen, one star then a like today. the question Advisory if and and question Dana As

Dana Telsey

everyone. morning Good

digital you how you to business are when the impacting you and with planning about had think success margin overall about this structure, model, you’ve shipping that see How the balance sales expenses? of for the As think should going be the for do the that you you. shift how that the year and that to base? masks, Thank you there environment COVID adding other we post you forward for are are masks looking this categories planning see in operating

Robert Wallstrom

Dana. Thanks

questions. both handle Let me

you’re and the costs. surcharges a there right from all, conversations on forth, to be and rest that as of year so we First over we digital the believe around out shipping of will perspective, continue the pressure look shipping

different for one a packages. We our we online packages. here shipping, of lot made - six, when being how consolidate as that, just us recently threshold We that very well, or purchase waited that looking creative less motivate outlet had sale, they seven shipping charge XX. tried something did worked a that to customers from had opposed just how $XX helped We we about feedback of We’re and we where at we free prior. finished ways

to going manage We’re to that. continue

have it’s but that of to of to help there’s efficiency a also We Vida we look we between don’t long our to be takes long-term we more an the detriment hard EBITDA that process. pushes that. the build for that continue robotic just more offset in put believe we’re center, standpoint, and think huge some shipping used is term The very efficiency margin Bradley distribution term, distribution drive that platforms. we we and from through efficient continue other in network, so how that as working the on driving focused operating this targets, We our will logistics a and on that Pura being automation obviously the pick thing we then the can Vera costs, will distribution Long still efficiency manage are ways and and think center.

John Enwright

that, to there it in will Yes, is the a only is I an difference from be perspective. accounting add Rob, thing would where

You freight more pressure expense the sales may bit with maybe see to. gross we’re above, leverage move to of margin and some depending little a we where SG&A get on how able manage

Robert Wallstrom

from it’s watch we’re business. been to the masks interesting It’s with mask part of standpoint, continuing--we important the Then how consumers responded. feel an the

PPE is expand we’ve done things other what we type and of stuff, it’s to other Staples, Target so really there for today that. in not headbands, done been bandanas, can opportunity important types is also it’s that but upon, of it’s think opportunity I it’s relationships all our think and only to distribution whether in an expand of terms said terms and people kind of innovation, like as masks use plans continue with to an also we

because the team, truly lot think more I and brand have for than us it, and are flexibility brands, the ability a brands something a lifestyle I that Vida as lot find talking been is I though, items think about lean a and Vera important Bradley categories lot really gives that they and have. both so there, into Pura I big investors both of is believe a lesson to of we’ve find the brand there’s which think flexibility the management and

that’s part brands. to magic on these of think why I lifestyle we of wanted focus casual the comfortable really

to respond so or quarter. around our things things home, this around type like we’re and comfort the customer The some of importance see that’s in are consumer fourth and of Beyond other the to things resonate are continue as will other to move think always those environment, that throw masks, of our we expansion watch. with we robes blanket, so into the things, been areas well things into program continuing loungewear important, fleece those we think of some to

Dana Telsey

Thank you.

Operator

next & We’ll question Marotta Associates. take our from King from CL Steven

Steve Marotta

quarter that John. a and guidance, you the having cash would tranche generate Rob of when the not that if little expectations the off in but morning quarter, down debt, you I and know and Good do the that in bit not provide bit the specific of third can ability little last you pay about to third to talk the books? anticipate

John Enwright

indication we’re a anticipate it’s not the project, hard we’re looking different on needing that Based ABL giving don’t think we any million, think to facility. that models down Given the I by end guidance, paid additional we think the down of that to ability borrow but $XX funds we that an fact current there’s I at, pay from the year. is to probably good that it

Steve Marotta

helpful, thank you. Very

Operator

Capital from question We’ll Fearon Partners. our next from Rick take Accretive

Rick Fearon

for impressive John, operating Rob on on a I March XX you want the to reduce took quarter. thank really Hey congratulations the just and bold really costs. to you steps

substantial and quick and salary it. we Your teens yourselves Pura the company, realistic Vida there even margin Pura and expected? and we’re team, your qualities for you Vida’s XX have high directors. really in of a of expansion great like is or it a questions. These appreciate not cuts this I Is are board Prior management [indiscernible], decisive great the pandemic, few particularly the a from to just range, actions took target EBITDA far going margin currently. additional running forward, was sounds to were

John Enwright

generated, Pura a we continue Yes it even in on we I term EBITDA quarter Vida, margin, high the to margin anticipate call for Pura Vida profile the Vida. teens believe long be XX%, margin for XX.X% in from Rick, to and Pura perspective, second the

Rick Fearon

a customization growth, a achieved year I’m you full bit, because great, in It’s know the brings million better the little your leverage sales. the than $XXX that Vera EBITDA on sure is $XX million Along same I infrastructure. but a XX% EBITDA lines, margin. Bradley year margins last probably down of That’s helping

that and teens into As something infrastructure, your margin investment and your mid you or to high closer digital is the to goal? systems a higher ecommerce expand realistic continue presence make the to EBITDA a

John Enwright

we’ve the in first had with over with it year an what of the think bit a given some in COVID Obviously the term long and different some I over the inclusive Yes, Vida. commented we of term. this Pura that challenges of challenges be expecting will the low margin range, little long to but would quarter, operating mid to the teen be and

You can as proxy what margin that EBITDA use we a think be. would for

Rick Fearon

and those focus or Warner That’s the was the have Vera collaborations upon the of could are capitalized sports military, very Disney with K-XX Vida market in recent Pura perhaps the colleges there and that Bros areas across collaborations, but additional be successes, is are are and know K-XX schools like market, those been great, Crocs areas? such you thanks. It country, on if collaborations and/or--I large foresee and that that already sounds wondering and as phenomenal fragmented there I Bradley targeting the sort club

Robert Wallstrom

different Rick, that. to think I think there’s Yes two about ways

like for explore continue think Potter, an Harry in opportunity as to of Vida. products, the of well First all as collaboration terms I particularly continue these some expand, Bradley Vera Pura both and Disney, around to that that’s of licensing to

I that be think something that going to be that will that see ongoing. you’re will

as where it’s has customer to of them. doing traditional We about. is I talking side, teen year Vida just on the our expansion second up but lot the Gillette in the exciting of new terms we’ll and coming seen category reach, seen not fundraising around Target one, of and really our we and been and at success we’ve so big it that, our world. just but brand, be into It’s and because but Venus the get in areas, and collaborations two collaborations so address the also had to definitely Pura part the that a Potter success, that that believe of for think We we that’s that in we have this broader next gets right? more mentioning and through has being I brands, collaboration something strategy grew into that only Disney you year more in you’re Crocs, with how forward we there. a look thing about our think expands is Harry move in us their the more character brands had can people success second and new to as the a terms other a go great both idea at lot of an customers to it about a really believe space can across Bradley collaborations not way, That brings Again in over the lot collaborations, with be brands. beyond that’s that of the area both these we’ve spirit too, year with important of in terms think talk Vera radar. masks that We’ve helps. of able look it’s

we marketing on is the The new to think what world, have as that which to in use so how but too, we Charli as the think the tendency too, is product marketing I collaborations this product Pura the partnership of I doing be side talk side marketing-focused maybe you as their in well on just o just a other around and move influencers, forward. around more are thing power collaborations looking for shows I mention collaborations Vida with all time, didn’t collaborations speak about, four

Rick Fearon

Obviously thanks. of magic of Bradley Pura great, opportunity are Vera that ambassadors, part well? the the as influencers. Vida where Is considers there’s an That’s the area

Robert Wallstrom

the talking Yes, believe about now have we’ll there opportunity we that more that work out underway do we build right really future. to in an ambassador be base, and is some

Rick Fearon

that. Okay, forward great. Look to

story founding authenticity the it just Patricia dreams that empowering years message to there’s XX story, quick great seems ago the and and couple a of additional women and Barbara Just here wonderful company their questions. The about like a of achieve to can the base Are well? as or do resonate customer shows that this media, that that showcased even it some possibly be the your of extent in would really talk with there social concept. or underway featured efforts to or that

Robert Wallstrom

being New are program this bracelet only about they told what more involved things There whether younger finding Barb we us supporting these can is customer do our with, Bradley but more with or Vida, our around able out that it’s not and at but a we’re stories and Girls Hope a speaking is of do to a Vera at do that in even story, in it’s Pat not whether these able the write. so and Pura whether we some highlight there, some to like Barb between Bradley to idea them but from about being important, it’s it’s what we’re that become at different the book customer that Backpack, want the ago. and found what in the it’s continue at still with to Vida, that. some foundation working or out participate Blessings wrote that charities Vera been only ones is stories is work help actually Pura we’ve stories is with charity the year

bringing into lot lies. our addition talking really these to spending stories in of where about that’s customer For we’re power a and us, the maybe focus we think most on heritage, our

Rick Fearon

That it with be makes also which for future to cultural same shared via resonates been what way great like and with the template you’ve demographic. the question, a acquisition, Vida the success Vida sounds back to last approach know do that the I sense, does, giving a and Pura I with that’s Pura growth Rob, appears community just you guess possibly consider this acquisitions? exactly

Robert Wallstrom

both We what model know, and other, been a have that, so but a two strong have Pura and acquisitions, feel - capital want we right? did to Paul driven in still potentially brands companies We One, been cash that that I going We brands company. I about to very other a Vida it’s time pleased think Vida the there We us Bradley great have find flow you focus. Vera we’ve we I lot to still really special have and well, a each which we and at think future to do two forward. strong the like between not on think lifestyle integration’s allows think Bradley well. done lot in with If moment. I think with unique same we’re commenting and things, brands show of to continue special, invest at would our is could we one focus optionality. It it’s the we’ve Vera specifically Griffin being the far, a really continue but growth. model. ESG think gone acquisition. peak helping gone the very really future, Vida a is is a very and think Pura don’t be Yes, Right number that Pura are brands The brands that and strengthen focus now, the happy

Rick Fearon

of work so and your thanks look to understood. and for Vera on plenty stakeholders Bradley all behalf in staying John, hard Understood, growth Rob forward of you’ve all and touch. totally got opportunities, organic

Robert Wallstrom

Rick. Thanks

John Enwright

Thanks Rick.

Operator

questions at the Wallstrom back would conference this further time. no closing to remarks. to any are turn for There Rob like over I

Robert Wallstrom

is for on and authentic, Vera Well, joining thank Inc. emotionally Bradley much an you two brands customers. company very call. us lifestyle today’s connected iconic with passionate, powerful

improvements are product, customer in focused We and engagement, continual on technology. innovation and

have strong balance cash sheet, flow, We liquidity. and ample a solid

are ESG commitment We strong to long-term continuing stakeholders our committed all fully with focus. a to

survive only we demonstrates environment. not quarter that this This in but thrive can

of We team challenges create team customers. ways and has could and tenacious be reach the agile, prouder our We how that have new do and to a address business talented together innovative. not to is engaged and worked the

you our our brands. on and two us quarter Bradley you to call Vera more stronger, We in third hope powerful company. join a X. can agile for interest your on emerge December are Inc. poised Thank We

Operator

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

Vera Bradley (VRA) 2 Sep 202021 Q2 Earnings call transcript