VRA - Earnings call transcript Q3 2022

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Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Vera Bradley Third 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 and instructions will be provided at that time for you to queue up for questions.

conference recorded. today's reminder, a is being As I to Mr. like to conference over turn the would now Mark Bradley's Dely, Vera Chief Administrative Officer. Please sir. go ahead,

Mark Dely

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

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

Robert Wallstrom

you and X.X% data-driven innovation and gain the responded Mark. We product of posted customers today. me joining quarter supported as Vera brand by you, third after John have over Bradley revenues and have us increase levels momentum targeted revenue continued CFO, X.X% thank to of pre-pandemic increase XXXX. fiscal Good to marketing. collaborations quarter joins also Enwright, for consolidated Thank morning, on our today's call. a quarter year-over-year

that nearly last drive vehicles by year marketing returned were comparable double-digit underway. and have growth quarter, of and the earlier Third sales Vida's last and sales XX.X fiscal over marketing over in in the sales e-commerce Facebook X year. X% iOS Vera Vida still put update lessen the year Instagram to quarter up the to suppressed advertising. XXXX. Pura Pura place is Pura Vida this primary Apple revenues platforms brand over the Bradley X% XX.X% nearly platform shifting These rose effectiveness been

significantly Pura and year. other the quarter. X in and quarter growth ahead Pura continue approximately meaningful increased we margins pressure these EPS run put much air months. in of industry, $X.XX expenses store future incremental negatively our the expectations, gross including expanded for the hand, expect open X impacted to continue in Vida and diluted San freighting freight supply channels. challenges and distribution Vida's $X.XX for X product by first additional On by well Like cost physical Diego we next stores chain on to will growth of that to the experience online balancing be We to estimate freight the

few to retail year's our will next quarters. began price strategic and both to supply pressures. increases inflationary begun have fourth mitigate some in We take over continue these brands of price this and chain quarter Those increases the across

We to not from renewed and of and status be chain GSP more of system certain $X.XX Bradley, the the countries at duty-free the otherwise Vera ahead the even beginning higher before retroactively reflects addition, of $X.XX where we year. EPS for by as In preferences, X where by Congress quarter but basis of status of on when again, the if lower XXXX once will of with the in specific This pre-pandemic. anticipate in known and reinstated products last for under the GSP non-GAAP the delay occur. we has items, the year EPS beginning that fiscal approximately calendar year-to-date impacted Congress. supply tariffs generalized In year guarantee a were duty-free negatively renewed we tariffs this of past, months. such will previously of to GSP, rate status margin as cannot renewal the GSP the source challenges, was and current $X.XX Even is the diluted ahead duty-free

We that Vida ahead. growth beyond and and both long-term even brands core opportunities have are meaningful confident Bradley uncertainties well the lie Vera their headwinds categories, product Pura though

marketing drivers and strategy; first Our our innovation category distribution continue customer collaborations extensions; our community X digital our key elevating brand expanding four, evolving customers' loyalty; pipeline, channels. our and product through growth to and enhancing deepening our number be:

flow purpose-driven an our We brands invest have lifestyle other allow cash us and affordable, over of generate out a comfortable, ability to healthy cash free debt-free continue seek balance and time. brands will to sheet to both that position, a acquisitions in

driven, Our long-term team are a strong, high-growth for brands on to we and are company. our remain We focused our is purpose-driven brand, growth. positioned be multi-lifestyle vision

Now, the discuss turn let me information. call John to our over to financial

John Enwright

Thanks, Rob, morning. good and

are for today discuss non-GAAP. third numbers The highlights the go I me a Let quarter. few all over will

For X.X% million the the of release. today's a please increase fiscal of an million quarter from the non-GAAP well third revenues current in third quarter a pre-pandemic press year $XXX.X as year totaled non-GAAP of items as prior reconciliation increase detailed net $XXX.X numbers, to numbers complete excluded Consolidated over XXXX. reference GAAP X.X% and in the $XXX.X million a over for

or total $XX.X factory the third in quarter, and year net XX was $XX.X months. Bradley revenues totaled X fiscal company year. prior per million, $X.XX $X.XX over stores the in XX.X% totaled a year and current Direct diluted permanently compared or income full-line third segment million million opened last last the year. share outlet million quarter Bradley Vera Vera $X.X over year Current increase closed share revenues the diluted increased X segment other stores $XX.X of million, mask over Indirect a per For to by a XXXX. an We key $XX.X sales sales Comparable X.X% X.X% consolidated million, sales. volume prior the revenues partially XX.X% in in lower categories sales year in prior an Pura were rebound in reduction $XX.X in by in COVID-XX in certain quarter, over accounts, the negatively to a specialty orders impacted decrease year. X.X% from Vida in prior related account account totaled year, primarily increase reduction that wholesale increase and prior a $XX.X offset $XX.X by product a the third orders driven segment million to million reflecting

XX.X% Third year, XX.X% our we this Last costs also profit points. net to or XXX year. gross $XX.X in approximately through sales points $XX.X quarter and masks, expanded margin prior freight This million compared basis by the year. negatively gross million net year, totaled expense of of inbound the revenues by basis revenues was approximately which were outbound not by replicated higher XXX rate of for or cotton impacted

tariffs, higher SG&A approximately previously points. $XX.X surrounding net duty-free to million reflects at we status XX.X% the of the totaled GSP fiscal revenues margin or XX of actions of million tariffs the In Due year. addition, $XX.X lower in year. the revenues gross expired the quarter for of no longer the expect countries or beginning uncertainties current of Congress' the basis net duty-free reinstatement impacted expense margin any by from whose retroactive to compared prior regarding XX.X% year. in third rate benefit year future This

year SG&A the higher applicable. year reductions which year, expense no expense due longer current primarily COVID-XX than are prior related to were expected, last As to

to million the $X.X totaled XX.X% revenues net year. or million X.X% prior $XX.X of consolidated revenues quarter net operating or Third of income compared in

Let about me financial to continues fourth quarter The predict. future outlook. talk to uncertain, environment performance our difficult and retail be remains

could current based estimates and are the performance conditions on that the year. trends providing we and industry quarter for consideration in sales for the fourth However, gross the balance macro impact of company's of certain and economic margin expectations

to levels our prior operating We expenses. increases are expect continuing volume traffic control and to see and over year

to increases. like chain delays continue many including forward-looking extended substantial Keep outbound transit is in This that our freight into guidance. headwinds, inbound below face and non-GAAP. However, factored manufacturing retailers, mind expense guidance numbers we all projected and referenced are times supply

Consolidated which of fiscal of of consolidated diluted $XX income $XXX and year $X.XX our ongoing to million a prior to totaled fourth to of million $X million the restatement in fiscal margin in the For of reinstatement GSP operating estimate. the and million; to benefit diluted XX.X% quarter; in XX.X% XXXX; $XXX challenges general million last quarter. year fiscal GSP profit our in gross impacted primarily basis on year inbound Consolidated fourth gross compared compared million revenues million per to equate which The Based revenues compared to $XX.X million net XXX million prior is to in XXXX; $XX XX $X.XX XX% year. diluted expense. XXXX, variable million an free for expectation. compared the basis and increase of to estimates net revenues of to to the year. XX.X% EPS is of million additional expense retroactive margin year updated $XX of of gross year; updated $XX million Net million in margin XX.X% gross of quarter in the last would The points; SG&A to the diluted consolidated to revenues of million $XX to $X of to or to million, relates gross $X.XX, million compared equate totaled associated prior year million in points to to freight rate mask in was $XXX SG&A GSP, a prior year. our XX.X% year for to sales, expected fourth consolidated $X.XX current in million not expense The gross to of $XXX $X.XX million with expectations flow $XXX.X fourth XXXX; chain to by would of are: GSP in compared net to fourth margin totaled $XXX.X $X and prior $X.X the basis year in sales million EPS mind, consolidated included SG&A of to current year; the Consolidated included outbound included $XX of $X expected related the not $XX approximately $X.XX $X.XX to consolidated net approximately quarter consolidated $XXX Keep million higher EPS $XXX was cash approximately quarter. decline spending income is fiscal are: in diluted $X.XX to margin. reinstatement increases XX expectations million to retroactive million The year. prior in current points costs share compared incremental capital $XX of compared estimate. expectations, by EPS year margin the previous the to supply improved retroactive fiscal margin approximately Prior gross $XXX in last

and end. equivalents borrowings at year's cash Now higher million let the Cash, year-end. than We me the year at of at totaled ABL third end of inventory. Pura compared million $XX quarter to to credit turn to facility inventory quarter $XX.X quarter at compared to million Quarter-end on last end and no was quarter million Total quarter had $XXX.X at million year. end million investments our $XX.X the of additional Vida end sheet. balance $XXX.X $XX.X prior due fiscal last third inventory

down We year-over-year be should fiscal range in the by expect low year-end. single-digit inventory

$XX the Rob? During December repurchase our stock a that XXX,XXX This plan in authorization XXXX. approximately activity, new approved month, share the of third purchasing $X.X Directors Board we resumed quarter, shares repurchasing expires million. for million

Robert Wallstrom

Thanks, John.

comp Bradley XXXX continue Vera robust, exceeding quarter despite remained XXXX with experienced comp the last XXXX to the brand. begin improvement X disruptions. domestic Bradley update Let's of in demonstrated sequential both solid has over quarters and With fiscal strengthen, supply category travel third an year and growth sales on levels. chain and growth traveling Vera fiscal

expected, and was elongated As lasted into the third the back-to-school this well quarter. year season

our alternatives Cozy graphic more last optimistic fabrics bring and apparel about second product Collection year-over-year ReActive look quarters traction levels, Ultralight in leggings vest, and XXXX. were committed collection. our and Performance back-to-school remain new options, collection, Twill to solid collaborations, continual expected Customers combined, revenues and flat growth innovating we of pipeline XXXX and recycled robes. fiscal exciting and nearly of a popular sustainable pleased cotton, our updating more over XXX% remain are color continued We're back-to-school Disney. seasonally. our up the quarter eco-friendly to constantly researching Potter cotton with our With substantially selection performance. We our and larger in fabric with adding for by to and and saw expanded including proper third tees, so sleepwear to We and to responding product customers Harry had another were offering to very we already jackets pajamas and of and as forward We We year innovation. of factory our

Our everywhere. with successful Disney fans Bonjour wildly Beast Belle capsule and Beauty was the

to throws. Snoopy-Themed And of introduced wide including ranging our we from price ready Holiday giftables all For key patterns, points, with entire robes to selection the duffels holidays, our brand are popular Collection, to go beloved limited chains a edition in a family. the of collaboration for the with a X first-ever line on November, we featuring Sleepwear to Peanuts Cozy at

reap Our Peanuts and business season. customers In delays that and term. results. love do I we note to data the has big area, remain abating we the the this reflected Bradley's also continue are marketing far Vera in challenging, analytics novelty, chain the and science, holiday made in supply substantial benefits hit capture and investments have not and a data been in will this customer so near delivery see

driving We more media. are social engagement on

user-generated are ambassador to grown influencer expanded employing programs, Live Facebook storytelling and and enhance social we have Specifically, continue more our have content, social selling, reals. and our and

efforts TikTok over third ads, media the by to million nearly engagements with over up VB and garnering over quarter. These X tactics, collaborations post brand to awareness initiatives. engagement, views We XX,XXX along impressions with continue fueled to Cares year-over-year expand in targeted billion, continuing XX% our X.X quality average are launches, and our drive PR product new and placements, media per our TV

increasingly ongoing to our commitment reflective proud also inclusion. our of are that diversity and marketing efforts are We

customers, stores much the higher customer customer-level factory aiding the existing activations engaging in personalized than new customers meaningfully past. customers at and lapsed rate Our are retaining across our messaging of and line journey-centered in reactivation a and full

Bradley XXXX, foundation third has during fiscal the the the Our of also brand growth in of in third Vera quarter count active customer quarter eclipsed the pandemic. representing the

younger have attributable customers is our along, base Cares evolving Our progressively All diversified become we collaboration. returning our marketing continued customer in-store in innovation product focus to our advance VB and to to have been shopping efforts to and more mission. and and

center, Cancer fundraising awareness is because breast and for research the October particularly of of to us for special support Breast conducts Bradley The University contributions $XX.X million $X.X the Research was of Bradley Foundation Vera million. Center Indiana the Foundation annual contribute bringing series course, life-saving Vera year, for able total Medicine. to to month. School Of Cancer to groundbreaking Breast at events a Foundation another cancer This date to of the

distribution. to Turning

business our digital continues by lead to our being Our while base. supported store growth

XX% Our by strategy. to revenues this verabradley.com XXXX fiscal our time, key over driver a stores levels. grew of omnichannel become support continue business nearly over Digital but has

levels. and third improve attained quarter, the continued revenues During our comp to pre-pandemic our store store nearly traffic

the more have channel retail single Our have over higher customer a goal a is typically customers we sales for to experience. seamless than spends the shopping our Xx omnichannel customer-led average markets presence, Digital where are and in customer.

enhancing certain reinventing curbside that appointment shopping in popularity and during have digital the customer focus pick online, popular, We remained in on buy the store parks our like full-line continue experience stores selling, pandemic pickup. to gain up and and

We our through as to are focusing highest our potential fleet and our of appropriate. and existing optimizing the rationalizing continuing on closures portfolio localizing full-line improve profitability by stores, select assortments our

process. However, this fluid a remains

year opened to stores our negotiations. bringing factory for to for and cut to total the expected close the continues up in openings combination the due locations example, customers performance but expand we at number this store a year, half X. to new beginning successful Vera of its the to shop. that of favorable We XX fiscal Bradley X year, lease options For quarter, have in to

In Phoenix test as the international quarter We a in internally. website is pop-up with factory launched XX which locations. ended We factory store addition, opened we stores market. XX our the full-line website experience, localized and first managed Canadian our

their customers focus. pay products to and added opened pet We excited increased and line about units Afterpay, transaction store our purchases for travel part the allowing partner be which new sales. as continue of our LAX a Airport per distribution installments, as payments in such is a of chewy.com and driving for Bradley We as to expansion Vera higher alternative

Vida. let's switch Pura to Now

noted, I nearly double-digit growth return in to sales of the As last were to Vida previously we quarter XX% Pura year. pleased see over

vehicles short of Instagram of marketing e-commerce Vida's primary this expectation advertising, Facebook our impaired by iOS sales. to fell However, effectiveness update Pura drive to XX% of suppressed Vida's XX%. were and still Pura the revenues Apple that the

Westfield mid-August perform in On surpassing hand, expectations. well, far first in the Diego's other to Vida store opened our our continues Pura that Mall very UTC San

as planning are us year. existing like allowing a makes to with summer. new showcase we We to The volume. open of up across by full lifestyle new X is next and stores product apparel, hope products the store we open Vida the innovations, country now have Diego into categories So array Pura Pura of sales Vida the store more expand especially San product to about XX% which

have we to country As in our double-digit we expanded by has new driving an omnichannel retail continue the store opened, Pura presence Stores in going spending. important the San in our physical experienced the forward will to a business diversify role future of online and demonstrating growth the play improvement platforms. distribution digital e-commerce power loyalty relative rest balancing will since Diego and channels. growth customer Vida's marketing sales, be acquisition in a as

expectations. new joined We've distributor. this has a growth our new as as Pura remains over partnerships. which store Vida added XXX we wholesale exceeded Dillard’s department to Nordstrom far strong continue year add fall, Our This so accounts

presentations in with categories solid larger presence these growth experiencing in wholesale our and expand in-store accounts We product are retailers. continue existing significantly core to with

more experienced have larger Pura in and key many role in product the a traffic. frequent on collaborations Bradley, Vida's fiscal than continue as innovation accounts, to in average, XXXX a like In wholesale current have orders Our strong resurgence and Vera area, placed play will growth.

and have In new addition well to adding jewelry. to elements we our designs diversified also beyond jewelry continually collections,

of the truly and momentum. apparel of to brand. a our building great of gain lifestyle the lifestyle extension the which continues Ts, are collection was example hoodies We of launch Vida A spring Pura

So Live been Pura and tie-dye have the the far, styles Vida the assort Free logo. graphics top

opportunity is Now drives next but customers customers, and only ranges, believe this styles our bottoms existing be to year. and revenue new size broadening appeals we'll our we We forward. are our logos to Apparel meaningful a introducing not going brand.

collaboration been new Kitty very have thrilled of Hello rings, super response collections have customers have we jewelry Cinderella. of with brand, from our Our and featuring and been Hello to Kitty necklaces And collection Disney's with brought of our bracelets big a with Princess enthusiasts fans. characters hit their favorite date. to and collection pleased to course, Both Jasmin are the

just collection Additionally, already and appealing much Outer collection Vida great our Bailey, customer. Potter influencer, the introduced to + start. a August, In and to Pura diverse this week Madison a which launched star with awaited we more is Harry jewelry is off Banks our

high-profile and have licensing tuned few that a Stay collaborations partnerships We months other in those. we’ll ahead. for launch the

lifestyle. to marketing. to expertise turning Vida has loyalty its new introducing Vida devotees in building Pura engaging inception, the customers, and Since Pura Now demonstrated

potential Instagram to Vida I Facebook As we impacted to earlier, Pura spring e-commerce have drive historically update sales. relied revenues and platforms customers heavily our since like various on mentioned reach the Apple

a diverse traction other and resources it diligently will marketing our like base, time platforms take balanced more podcast worked a spreading agency TikTok, growing has platforms. marketing know team SMS and We new a analytics like to to and subscriber marketing and dive deeper these program other our customer gain YouTube. with to building of onboarding portion Our e-mail into

more both for Pura will focused been and first ways to continually company's expertise customers Bradley looking Bradley a traditional awareness. drivers. focused engage Pura our social X the digital Vida, strategy. In which customers key Pura Bradley and Vera its able e-mail Since on new to continue becoming instrumental with our Conversely, drive like Vera as our marketing drive remain Vida and Vera XXXX their and creatively enhanced are to brands. campaign. to for has mail more sharing brands more undoubtedly expensive they effectiveness to on brand be acquisition its digital direct One, continue our cost-effective challenging meaningfully help we of manner, in as We new in summary, growth is channels diversify and Vida media we leverage our

Instagram collaborations a We Peanuts. Over a have with revenues our sustainability of our experience. investments Bradley for bringing diversify essentially X/X more X categories continue XXXX, effectively million, analytics, targeted a followers digitally-focused new made XXX,XXX Disney, levels, customer-centric, customer marketing strategic back count as producing digits of Pura in Facebook and expertise than continues more Pura and approaching year website media through retail as demonstrated we introducing and into climbing. XXX,XXX after product ReIMAGINED seamless the We're distribution Care's apparel building now are as jewelry followers we product Vera the to and of Vera evidenced to and over partnering launching through Number redesigning from continual sales million extensions. new followers, has half introduction Bradley, from accessories Bradley, category are Hello launch. building company customers Harry into digital-first the grow shopping us reinvent channels. our is offer and to expanding are to nearly to is growth allows customers Two, Afterpay, COTTON alternative website its to to factory of engage community customers, excitement our new with consolidated looking Instagram the total with to pivot ways reach and Potter. And commitment number our technology-enabled the and total TikTok continually and X.X entering to verabradley.com Crocs our our customer Vida four, to to at our ever Vida lifestyle last enhance and social a powerful the over like department fabrics, be nearly little And into the loyalty and generated first collaborations to grow Vera by open e-commerce. Vida e-commerce us and and store Vida. engage, our broadening BB will relationships XX% marketing. well call our continuing will by our efforts. pre-pandemic with launch store and fiscal excluding Disney, this wholesale newness with exciting shifts and in us Operator, and and such for category which base lifestyle, TikTok our core brands and of over shopping The collaborations brick-and-mortar. to sales. other by over collection, combination to questions. driven Pura grew Potter, opening to Kitty digital Harry a customer future product our At at engaging enterprise, year, Bradley's evolving and to three, Canadian we than now innovation company, Vera countless stores, devotees data-driven are our experience, evolving both double and pipeline, at Pura

Operator

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

Mark Altschwager

with newer some little bit regarding you're with particular more us of or customers, newer engagement efforts categories really on growth? curious at like learnings when give any just looks I there any Can progress are guess it customers. the So to continuing make outperforming the customer file you Vera. detail that marketing are fabrications a nice

Robert Wallstrom

Yes.

new new customer brands to we're the think is file. in, it is in younger, our positive a with which We've driving of doing. our collaborations all new customer which customers getting really think of that is, thing one, that's customer been also new inside one been terms The bringing count, also that see. seeing we is exciting has I partnerships

overall, of the been but reiterate, pleased think only just to been I very that customer more So but and great side. the as thing we've long-term also towards making the younger, on which other earlier, again efforts, see the we is the really file. progress And builds mentioned we've marketing we've becoming not diverse health to is been with Bradley Vera our the diversifying customer is

Mark Altschwager

gross lot outlined. of and on then you cross-currents, pressures And great. a That's so margin, as near-term

thinking on year, As benefits into any few here, 'XX, the the costs chain ongoing look we versus is what but could those over 'XX, currents other how increases. should perspective we think price next you're quarters? be thinking about margin calendar cross ramping GSP guess, a Obviously, supply like just swing how about next understanding that about gross from I factor

John Enwright

Mark. John. This is Thanks, Yes.

half year. I think as look In all next chain supply at for some to and significant the to expecting looking a those for see the fourth point the half the the swing that next of us the approved. for another will call XX of margin the believe year reasons a you taking is into some into year. it. to to year. first factor increases benefit similar the GSP, Obviously, then in months. we do we the We quarter price you're first it increases to back planning that at we're some be could costs with took of this But the freight acceleration the within price to compared expense normalize cases, of To have last year. are year, freight be year least to additional And is consideration offset going if half

we'll given increases and side side. Asia release. cost cost product that well, continued are vendors we price come looking some March we do pressure pressure for. the But on within some on to be going with guidance in the be there's going the So our some also, think as out There's inflationary believe, a to ultimately, plan freight

too. some So we're working with inflationary will them pressures, to ensure there we're we paying appropriately, think be but

Robert Wallstrom

of to way I price we that said, would as increases. add trying Mark, pricing is the I with think on that, inflationary out the pressures on balance all

in As started increases Vida, and July. taking with started beginning John with We first talked Pura started about, they the some increases. price out we in

seen that, doing customer overall been price and seen We similar Bradley started good we've reaction. we've acceptance that. monitoring of As limited some have in Vera increases

we margin a will process. need to help forward. to key improve few gross next have we the continue program lever move over out that That as we be the months pressure So to set pull a

Operator

Chen We to move Oliver Cowen. next with

Oliver Chen

relative now inventory freshness what Pura also, inventory happening with versus it portfolio? forward? on the how key strategy the the the that? is And Vera level what's to inventory. front, about makes you're thinking pricing, Regarding what demand? as How sounded seeing the the and And Vida And sense inventory, what going undertaking you was Vida in you work Pura more there strategies Bradley through you're the are do are to like

Robert Wallstrom

about and inventory that talk is standpoint, both increases. in maybe targeted brands within let So what a our do and I'll thoughtful pricing But John sure address I'll trying pricing price one. the very from the we are make then we're one to

at there's So we're high In going brands, each through level of and looking continuative a both product. item.

So the going with research inventory. months. that rolling needed have a take changing And right? and out because a little it future we price a it. item very said, again, of we're been very we change to more much over like prices lot challenging to on approach the to X next existing It's we makes I those focused behind price But basically items, how by

promotional do spending that's at. evaluate looking next into then look think at on. we're time I So thing I year? we thing the And we're to activity the other we're how going think that's to And continuing more first that the some continue

Bradley ago, out very and the clearance a of really have many took of Vera you we clean been of few a a might business. running lot remember, years business As

the are activity to at didn't as to margins. channel, and that look the -- we opportunities activity in factory reduce what opportunity improve many this look year. much as particularly we the But at, beginning promotional have to are So

John Enwright

deals and than now inventory think distribution Pura tale to higher of certainly we I than the give regards brands, Bradley to sure But that opportunities year. during some right that sell if inventory. year-over-year, kind think efforts we stores to with to the that we last the point often wholesale to are from be have partners of through we through Pura right? year quarter looking some to We're want some of a So of we're move you certain forth putting well. website. and the to at the sell. Vida And in want Vida through were doing sell for devalue about too other Vera And think by of we perspective next brand, brand inventory the that we'll about it's some some higher X as inventory, of don't we another -- created through to make doing And a

not anticipation. to really flew a increase sell Bradley holiday in those we'll where of definitely the product a time, were work I place obsolete, better styles year-over-year, expectation of the have to in inventory. an just other just an we'd and over of brand was we'll months, up. out over for over in the in that here, were it Bradley wanted hung we we have So was that X consistent probably air there with but certain in through I product stuck thought call so the Vera categories are to locations, time. in it take take we're bit done some our when because stuff become the be we're a little through we past freighted containers definitely position "a and be inventory" in fairly of time doesn't how ability product, stock that it last here we've there some approach would because we think things The Vera say -- so We been we

to bit chain here. a continues but bit supply challenging, get are to we get anticipated to expect soon, initially in than product taking a little those We as little the longer be ultimately, things

Oliver Chen

the very of might happened your I a why was on know relative you prior any to expectations? on have that That's there's context delayed what color. have helpful. Okay. of lot uncontrollable GSP, Would -- renewal there. And any variables love

Robert Wallstrom

Yes.

So part. I I'm didn't I the think last hear -- sorry,

Oliver Chen

The relevant be as that would to applied well. helpful countries that,

Robert Wallstrom

you. Yes. Got

and it So to the applied supply is Indonesia chain relevant as from year. our this procured countries from that Myanmar, Cambodia, we

we're the of that became some get still that less indication from. to that I we're Congress the the it's we During going going on to much a renewing was to year, think year and beginning is believed were passed past, work And little was year hearing, in throughout get the going still everything hearing it but the this. full more every hopeful at there right,

bill. has they than into the kind Just of the want Senate house put the to a perspective different what does on

So things you than bit with happens Congress, a in everything longer it's just take that little anticipate.

don't have so assuming planning But to our we happen, guidance year, when year, happen. it December it's anticipate So happening making not third to this expectations changed this it's it at happen that it still we're quarter happened, We're next still early of and given the end will released part of that. year. based going hasn't now, we on -- of end right guidance decisions at the and for and or fact happen hope full year to we second the anticipate we're the quarter, not

Oliver Chen

And spend your and situation strategies do you we a your a the strategies with for about? you control? has with that the what industry. on are the people across where What well Okay. main see thoughts marketing the IDFA you're of as difficult are undertaking. should as are been know what effectiveness that within And lot happening And

Robert Wallstrom

Yes.

I think I it let me all but beginning, the we have sure missed right over. make

I traditional Connected strategy things the think as things like update are becomes making it platform terms Bradley cost. done, what's And and of iOS also doing looking and really marketing mixture forward, going in what key this marketing thing the right? it's of methods maybe success at up. I'm like in that direct consider digital would to be the changing, both as we think I distribution go and going is happen more arena the we avenues, other Vera our retail, right? sure that seeing to was if mail, against word, digital So I been they've going you the continuing and about think in are key costs of think diversify some one is to space with our arena, and things that digital the the in about I it on is -- has that TV we This think

to digital do more some how you have lot the So balance that a customers traditional first-party you more a much more get with stores new avenues, through with that and TV, Connected Pura events. spend, store. that but outreach direct opportunities, been or become mail more lot data balance a in targeted, We've Vida is have data, whether in excited something like very in getting other crowds doing successful events

the And so as using major just part becomes acquisition stores think customer all of we of opportunity. new as well as platform a that

think for data strong science behind more we brands, is But can more sure exciting again, skills us complicated, have keep to make that to Bradley those and right? has I a Bradley learned out them. it. been a long the Vera really lessons Vera need of some you our and So our traditional, what's strengthen building cross-leveraging balanced, they've really kind between with we and digital of can Vida Pura use history has more platform, of and share that

Oliver Chen

traffic you the on seeing And what by traffic, full versus outlet how Okay. will you relative levels think price? 'XX And manifest physical channel store levels? are front, to do these

John Enwright

Yes.

a that the than with channel, year, traffic in it channel been it factory traffic which stronger the the perspective all factory So how was a outlet saw slightly perspective had better fairly was from channel. consistent in in third quarter, is in from traffic full-line we is performing the

still the line channel. traffic over year next the a extent strengthen ultimately, think there factory and anticipate channel we come greater longer I at into back in full term, the to continue to than

Robert Wallstrom

is have both both after great what's tracked full traffic to and to line quarter. has important The to we've of increase, performance Oliver, I them which quarter think quarter, get stronger our continues see. continued quarter But been do to factory of know, after the

factory improvement slight a we've line. been looked just versus at full there's as traffic So

probably and So continues out pattern, both both we on both. of standpoint I The similar trajectory performance across conversion, a of key really increased very think from to them similar be are real traffic though forward, a expect channels. going

though which So over encouraging see. really strengthened, a down pre-pandemic conversion levels, bit traffic to is is little think the has even I

Operator

[Operator Instructions]. Beder Eric SCC Research. We'll go to at next

Eric Beder

How levels. talk A, is which the of -- doesn't? how they a works collaborations that one be better some thinking of a for about multiple opposed in, Or done kind fit little which a them collaboration? not-as-good one a what kind is you better is are as You've is to we which and bad what of Could is bit X should X -- what to -- versus good what about years, collaboration? how

Robert Wallstrom

opportunity growth things. collaboration, It's of maybe kind outsized think to of best you couple for pent-up way Eric, the your one, answer demand. when I a that an do always more is first there's

largest collaboration. have our first-time So been results some of

partner second how across very with becomes The piece both licensing brands well that you. that important is collaborates

Pura Kitty were base, to customer Hello Vida successful at example, doing. for push what Sanrio support out had from So we very their we was and to

that So performance we got outsized some Pura in Vida. in

ask we just customers brands. a it's their research licensing do lot So are favorite characters. both what of in We

for And so things are we're look continuing fresh. that to

some Potter is So of and we'll ahead have franchises. a Harry that we're drop franchises going then in are what you'll But see go freshness. like lot to massive and Disney

You're going partners. newness lot a licensing in to see those of

things managed see that. how exciting Harry over Vera expand Bradley to and portfolio. to been way new X combination becomes to important. a the of those Bradley it's we've at Potter, very into even And customer as customers like many customers Vera So again, a with as really it looking It's moved came

So -- think licensing about and with, brands things Bradley Pura but think and other it's partners that that other done whether only again, some the we've don't collaborate Vera Crocs we with about right, or with brands to, Vida.

John Enwright

would I we've think thing we only The be need is I that, brand. to learned also to to add the what authentic

to ethos packs bit of packs Madison Bailey. performed Charli the Vida Charli some So little think Vida we in Bailey regards the D'Amelio of Madison us if for released D'Amelio, more the released some Pura better with brand and pack Pura has that sales. the we really you about and did brand, than a

about think when about think have to we influencer. with are as think also I that thinking we an So that, and we about who we collaborate

Eric Beder

Canada. way? I'm expansion, some be that? franchise must should that And something customers had Canadian maybe about have the how thinking On the assuming already does we sell stores in eventually or either down you the

Robert Wallstrom

as international Canada, do the I -- we're test would you imagine, in Eric, We #X to brand. growth. country would is think I what continuing our for is now, Bradley say, that Vera right

in begin our for thought in important to directly. learn it customer to Canada, control begin experience the was we So really Canada to

big to look market Vida. not decide But to how learnings, at Pura as So continue Vera can And build we're opportunities. but that, we we're for to we're watch getting that we're have test Pura Europe, only in do presence continuing international on to learnings. and going that Bradley, and be. we'll international at we Vida, going

we'll travel I expansion, So an other kind think international we of for be see just through begin place the and will brand important of to the seeds expansion. we the part over is plant to think grow it at expansion look But those time. how

LAX think with Vera you Bradley. what in see I happening

the on but had lot reach get not coming a new and with a we haven't of with our think to LAX been I whether there's place some local minority-owned the of a We've before. or out we like think able it's lot with terms customer, businesses as unique female-owned that, opportunity. businesses. And and to current international new of connect that pandemic, way work travelers more come that only in of businesses a really eyeballs out provides we've through brand

do So opportunity is we acquisition customer unique opportunity. that travel expansion a think the

Operator

We'll & to next CL King Marotta Steve Associates. go of

Steven Marotta

expected for Rob and are next ones to back the increases as I John, want year. to as price go recent well

you And You about to these magnitude guess also across best if moment specifically it's the headwinds you talked a are either at bit the increases a all. or fully expecting line? offset that costing the price them offset product expect average experiencing on or to little

the price If talk what of offset? and how about the size are can expected to feel you they about you increases

John Enwright

Yes.

That's would Increases, obviously over pushing of about the overall. price total, vary think what through single-digit increases anticipating you you style could we're time. increase, the as each So and kind say overall in But low low I category. brand. think that to price on the mid-single-digits in depending about increases

for continued We're on possible, much working as ultimately, we're all to still to try out through to but Now seeing contract rates. the whether those working And pressure we're being some think offset the offset all rates is shipping. bids the able to plan or intent next And full as in year. that year, we're -- with we not for associated pushed gets as about through through details.

it's So right to fluid transparent. very really we're now be a process --

the fully price we're now, can't and XXX% So increases working say a is estimate for that offset? yet. it through does best what certainty right I with

Robert Wallstrom

entire look we're single in right? up XX% do individual increasing was some and at in when the blend to in I the could single-digit items you portfolio end that I increases be at prices, prices, But Yes. you targeted is kind portfolio total you add low you John we -- so items, price the that numbers. more look the When you think, XX%. in of increases thing saying in cases, that's when only at would price to we've are digit, where not John look right? what if between is the where increases, right, seeing we're increasing

Operator

Telsey We'll go Telsey Group. Dana at Advisory next to

Dana Telsey

in a accounts? follow-up. on with accounts, then magnitude quick fewer just bit have past is you in increases, concentration taken the it with price And indirect what the you And price accounts? a in the the and Can more what's little I then happening Is about those increases have past? talk

Robert Wallstrom

So of I a answer from think a overall, pricing Dana, couple I'd ways. increase, it

of type items increase year, we started increases price If at of how magnitude. kind the you have individual the our And think this double-digit I quarter. in generally, about fourth look would is taken on

price years both dealing we few that at issues, low China as years across few with brands, we were Vera back tariff range. all the type ago of made a in If the and single-digit, across going Bradley a single-digit increases did it of was you we historically period where have look kind of a

core they we're few a product their did not took double-digit And Vida have significant So aggressive seeing double-digit product. increase core as of another increase in this back November. as increase, just kind did their in Pura ago, they year. what a years have in

Vida time, fairly we there's had at opportunity have over there. increases and Pura magnitude think we So large

John Enwright

Pura was over add happened that last Vida The years. only that of the ownership, has I thing would to the prior couple to our

Robert Wallstrom

Talking indirect. about

John Enwright

perspective, indirect both expansion brand, It in an ultimately, year last you about in brands, there's it's doors to really happening that Vida if has compared -- brand. So as the are expanding continues Pura year. an that this it of accelerated accelerate to from think

Bradley think about kind we're we're the diversifying partners diversifying offerings while our you If there, of brand, product Vera really there.

So and plan kind brand. that's with Vera the the thought associated the of Bradley

Robert Wallstrom

it target, how find as our you do partners So much right, now we what playing opportunities we obviously like significant new amount has And our to and the as in at really of just line, as as which grab do put use Vera mentioned, volume. how again? we're customer eyeballs is take I Bradley right? think of a -- wholesale pet doing we chewy.com, So much eyeballs chewy.com,

Dana Telsey

most and And count, for How do percent think each you of of where SKU a the then do of brand? the SKU or reduction Any you the on think sales how dominant expansion from that are now? SKUs? SKUs comes you of counts

Robert Wallstrom

different So at us. are been always a The have They right? top focus key things, a items for Vera few always Bradley.

our You can the Backpack, lanyards, needle think -- those tote, iconic throw there blanket, between the are movers. very large of the about much floral all items Campus

focus We continue those. to on

in assortment, we're opportunity items there's focused an categories the to that that the core in tighten We best product, Bradley, that bag expand sure then really also driving make to in key SKUs, believe and the Vera edge. the right, on core do business really the on assortment continue

the So key trading to the one as customer reason of one really Vera other, bag another focus that to add home the area, but the giving adding another Bradley. to apparel into the at more really opposed from or to just That's buy reason area buying strategies buy.

about try been terms jewelry Vida, new to monitor become SKUs string newness new SKU successful, out that the think there how count. of something focus has If important great maintain which business, core But bracelet been has very Pura into like has expand to jewelry, you something continue in do in of we we really sell don't in a that a driving will that strategy assortment. great tight broad, go think new. too be But make for we growth. just And SKU And new, testing but us to kind into as we're in we sure bringing have apparel. We bring move out, want something forward. then

Operator

Mr. session. conclude Wallstrom closing will for Rob other And comments. turn holding, back any the no that to additional I'll or With question-and-answer conference today's questions

Robert Wallstrom

Thank you.

dedicated clear company. high-growth We to have an multi a and team, culture, vision extraordinary purpose-driven loyal a a brand, lifestyle customers be

strong our capacity invest free allow Our unique affordable, balance brands generate in flow to position, and will to cash X debt-free cash us purpose-driven and at to time. continue other out sheet seek comfortable, brands over acquisitions

disruptions elevated and we our are near-term costs digital ability expenses, GSP delivering demonstrated the renewal, supply an with Although manage to strategy. challenges delay through long-term headwinds short-term in the on while there have chain and rising

have nonorganic of within We ahead year-end long-term create us join the and future you by current and exciting seek for our stakeholders growth our through brands time. X. Thank an Bradley, pursuing all brand to for can growth value interest your innovation to our in hope for call continuing new and on Vera and and acquisitions over Inc., time you earnings opportunity we March

Operator

Ladies for today's you and conclude that will We thank gentlemen, call. participation. your

You have disconnect a great and time, at day. this may

Vera Bradley (VRA) 8 Dec 212022 Q3 Earnings call transcript