Earnings call transcript Q4 2023

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Operator

Good morning ladies and gentlemen. Thank you for standing by. Welcome to the Vera Bradley Fourth Quarter and Fiscal Year-end 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.

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

Mark Dely

Good you joining thank us like for call. morning welcome today’s and We'd to everyone. for

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

the Vera Ardrey. Jacquie? I call over will Bradley’s now turn to CEO, Jacquie

Jacqueline Ardrey

seasonal revenues you, Good the on quarter key in and driving call. fourth thank promotions morning focused you and We for targeted items. Thank on Mark. giftable today’s joining us on through strategic

our pressure. although As a company revenues margins gross result, total under remained quarter guidance, fourth outperformed

quarter, prior total Vida with which a deliver sales improved Pura year. than with was on and both per enabled diluted of just and control In sales $X.XX, sales quarters, year-over-year earnings over Vera at last to X% Vida us Bradley non-GAAP flat less Bradley basis. quarter trends down Pura expense X% Vera down Diligent the fourth fourth nearly share

affected Vera Targeted to retention the the experienced efforts year-over-year improved fourth growth. Channel increased trends Vera revenues Bradley although while continued quarter. Factory traffic Full-Line the quarter, Indirect and e-commerce be revenue levels, customer store For by negatively consecutive throughout revenues, led Bradley to

Pura digital digital to strategic At and a coupled continued quarters e-commerce promotions; with media social to previous in however, costs. challenges in effectiveness year-over-year over persist And, our we our rising improved Vida, channel. overall decline media sales wholesale experienced due trends

On the ahead and markets. retail perform they continued and of improved traffic plus Pura side, e-commerce Vida Full-Line our expectations, to in drove revenues stores their

name position We the consolidated goodwill took fiscal Pura million, to our recording fourth opportunity and appropriately $XXX future, Vida by also and reset impairments We trade in quarter necessary of the year and which guidance. inventory exceeded for the revenues the with write-offs. the business ended

supply we year, to stabilization diligently managed controlled our our carefully in chain, and began expenses, cash. the see During our

quarter. year-end reduced inventory our we During the from quarter, the fourth meaningfully third levels

had Although contracts cost-reduction technology the areas actions efficiencies, of information expense future. its logistics operational we Many were services, and the Company, derived were costs. Company retail including took XXXX, savings annualized reductions, marketing the and The fiscal projects, in and challenges, various in we store of collaboratively for payroll expenses, XXXX. the savings and In realized professional fiscal across and the $XX million XXXX laid identified processes. position groundwork efficiency initiatives to mid

our order adding best and focus for merchandising, plans. add team right-size drive marketing approximately Chief Marketing continuing environment, long-term to designed more January macro and Bradley Brand to In to XXXX, streamlined the Chief by to of the President, our to we address Officer, and by and million, steady were annual cost of the Vera Chief deliver further Revenue $X decisions made of structure on positions size leadership position the and Company achieve cost These corporate and Officer, top position savings to business, structure our growth. eliminating challenging bottom-line strategic additional Creative the in of our position and Officer, us

Vida the Paul XX% for XXXX, Griffin to Pura remaining end Thall founders Subsequent of fiscal from Goodman in acquired $XX we million. XXXX, and in interest January the

to We in data investments and decisions optimization, and analytics, run data and to business pricing collect us make make continued customer science, fact-based more efficiently to analyze business. allowing our

innovation Crocs; expanded with our collections. At we cozy, Vera our expanded iconic sleep, our product Harry collaborations, and year brands brand, Featherweight and Collection; launching the like Bradley of and product robust also pipeline, another continued Disney, outerwear including Potter,

Full-Line ending and strengthen to and stores and continued fiscal our five Factory store, XX XX one with rationalize underperforming stores Factory and Full-Line locations. year base. closed the store new Factory We We opened XX

in continued boutiques also presence to shop, like our select adding Amazon including third-party enhancing to and expand We options in high-traffic marketplaces, customers airports. for

our to Pura designed and into Hello collection product the our customers we to several Vida as Disney, At Harry brand. Potter, expanded our with collaborations, assortment brand, jewelry, engravable offerings and of bring expanding such high-profile entered all Kitty, by launching demi-fine brands and new our product

less We complete building coherent, that diverse, This drive platform a effective, project for began data and build reliant scheduled completion a on marketing to target of customer Pura spring. personalize single, Vida can sales. of program and view marketing so e-commerce Pura each comprehensive is third-party performance-based we Vida the to better this innovative, become marketing. customer focused We on process more and implementing a

SMS, engage impactful effectively customers. to explored other micro launched on to our influencers, optimized TV, continued methods ads significantly expanded our reach our and presence, connected aggressively We TikTok

stores marketing loyalty, expectations. driving have role platforms, in Full-Line to they and we three exceeding opened our diversify and power year, These omni-channel to spending. customer during retail continue our count a Pura the four digital also collectively demonstrate are We new acquisition new as can a sales, driving stores which playing store Full-Line the Vida are presence bringing our four, in

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

John Enwright

-- Jacquie and me, Thanks, excuse morning. good

outlined today will and a go charges I are over fiscal year. non-GAAP me discuss all Let numbers excluded for the release. today's few highlights The in

numbers, items of non-GAAP reconciliation the of reference a as from today's For a as release. to well detail press GAAP numbers, please non-GAAP complete excluded

net $XXX.X for compared totaled or per fiscal $X.XX in revenues or fiscal $XX.X sales million XXXX. net this share Comparable diluted the direct Consolidated $X.X from to million share, compared per $XXX XXXX last totaled Consolidated year, income $X.XX diluted million $XXX.X X.X%. revenues million Bradley $XXX.X year. segment X.X% million totaled to declined million Vera for year. prior a decrease

up shift from million increase over rising Vida totaled digital media $XX.X e-commerce Vera certain negatively Bradley media segment as digital and an wholesale in million last in reflecting decrease a year. prior the Pura segment totaled Indirect year, revenues million, $XXX.X were well revenues to XX.X% effectiveness and account Pure in in Vida's key orders. social a XX.X% costs, accounts. revenues decline by as impacted the $XX.X $XX million, sales

year This last totaled of profit current year. offset XX.X% promotional The frieght or was net by and or increases. margin by year's $XXX.X outbound negatively XX.X% million of price expense gross million and partially affected higher revenues activity, revenues, rate $XXX.X net to gross increased compared inbound

due and lower or totaled sales expenses in compared volume. a lower year. or prior revenues due expenses to reduction variable SG&A initiatives of expenses million million, cost year primarily $XXX.X Current the XX.X% prior to reduction in XX.X% year related than were net to revenues net of $XXX.X

compared year, last of million year. net consolidated was the to or $XX.X profit revenues or net $XX.X For fiscal revenues operating X.X% of million, X.X%

-- was Now, cash inventory $XX.X Total cash year-end. year-end. compared year at year-end. no million totaled at million let's million last $XXX.X fiscal the compared year last $XXX.X our $XX borrowings prior sheet. million and We year Year-end at fiscal balance to equivalents turn fiscal fiscal $XX.X to had facility on to credit million, at

Total logistics inventory. associated current lower were excess of costs fiscal due burdening third offset overall lower prior Inventories quarter. inventory $XX inventory and to million incremental the with inventory, the year discounted year by partially was than than end primarily the adjustments

approximately repurchased of average During common million $X.XX. fiscal we representing XXXX, million at X.X of an XX.X price shares stock,

will a to conservative We approach volatile cash, in to particularly environment. continue this take

our shift let's Now XXXX to focus outlook.

macro year be that for be providing macroeconomic will our expectations. this the rebuilding trends environment full We brands. to anticipate and and based unpredictable, both estimates a of for on to year current economic are year continue We the

gross opportunities However, we margin diligently. our structure of to expense take expect advantage manage improvement and

but the not per are the to expect in for be quarter line fiscal roughly of detailed revenues loss share with we diluted guidance and XXXX, We providing prior first year.

the The guidance looking hope first stabilize quarter see to build quarter momentum business. forward is the as we as We work non-GAAP. a rebuilding All to progresses. numbers year are

million For Vera approximately of revenues we expect $XXX Revenues million Pura fiscal Bradley a fiscal $XXX to in be revenues XXXX. Both totaled Vida year-over-year basis. expected flat to are XXXX, on million. $XXX and total

overhead related freight costs year-over-year to to XX.X% Gross in expense, XX.X% offset compared to by partially deleveraged to is margin purchases. last increase inventory of inbound reduced primarily year. The related expected XX.X%

restoring last SG&A year. to million levels $XXX compensation and SG&A primarily initiatives. million to driven to reduction cost compared million Year-over-year in normal by changes expense companywide by long-term short-term expense incentive offset $XXX of $XXX.X are

of million $XX.X XXXX. Consolidated diluted effective usage operating of cash last rate Diluted income flow fiscal to approximately of compared $XX.X to to compared EPS Free XX%. EPS between in outstanding $XX million $XX last year. million on $XX.X and of tax shares Diluted to of year. million $X.XX million cash million a and totaled weighted XX $X.XX was million based $XX.X $X.XX,

stores investments to prior $X.X and technology and spending reflecting logistics new capital the Factory million Net $X associated compared of approximately Bradley with million Vera in enhancements. year,

the me Let our more strategies. to Jacquie share Jacquie? go-forward over back call turn to about

Jacqueline Ardrey

four and channel, both bottom-line Project and our focus on Restoration Pura brand, Vida embarking key and drive long-term Thanks, are we Bradley pillars: consumer, top will John. and on product, Vera growth. to At brands,

at Vera Bradley. First,

targeting age style, the we feminine this focus XX-year also function. not also on and value old inspire will retain group. Regarding to and our we only brand fashion who women strategy, relevancy, will With loyal and outside this of casual restoring customers XX consumer, but the

customer as will about our distinctive that our unique the on a brand feminine think we colorful, level. As fashionable and deep connect brand, positioning strategically emotional we a market

will at, within our and we and on core innovating by categories core items products. We refocus best are expanding product

colorful and trend distinctive elevate updated will We but our through print keeping feminine design. more it heritage, relevant

target We item introductions will strategic into And sense with we customers. pursue our innovate to that for continue lifestyle customers. make and adjacent that will collaborations align partnerships our

perspective, focus and From presence digital-first a our accelerate messaging. we will online mix brand of a storytelling through product and channel

clearly new from pattern differentiated with differentiates that relationships a wholesale or build color, fabrics sourced Full-Line footprint partners. we more will Factory strengthen will sustainably pricing. and And through stores product strategically and aligned We functionality, existing balanced target

old At will to focus who we be. aspire XX-year Pura the on Vida, both older consumer XX to girl, and collegiate those on younger the care-free front, sharpen our

and free herself way a her customer is spirited, target jewelry Vida Pura living focus is personality. of life. a trendsetter fits best on Our expressing her and

looks free that living our refresh real diverse feels on and and with will We brand what and real a image are moments faces real like, focus authentic, showing showing places, inclusive.

We of will Pura life our as [indiscernible] as and "living responsibility. the brand supporting charities on to social ethos re-center fullest" well Vida's

unique, delivering on focus and fun, playful will that product We are designs accessible. affordable

of our jewelry other We as well for deepen adjacent will business innovate continue in items. And additional that opportunistically hero expertise our in and string explore to our makes close bracelets, as our categories will sense core and category we customers.

we target channel have As platform and utilizing on restoring new strategically data personalized distribution, to strong will we marketing. our focus growth, e-commerce comprehensive look customer a at

pursuing our account. We of by and drive more will expansion larger of growth partnerships strategic wholesale existing larger strategic

support diligently big this will drive investments year top continue strategic help and base. expenses support make the growth, and should line the basis, two further will be gross right store what and is and drive In to our that to addition, flow. our and to cash margin, brands manage a we our store infrastructure growth needed To corporate growth of how our development chain, supply to new and refine transformation pausing on model talent bottom determine SG&A we store to base

at year sales, focusing and XX%. year-over-year and income gross stabilizing by control, increase EPS margin we on expense by least This at by operating we can XX% believe expansion least

year. financial long-term fully more plans, share strategic We I later in of this developing more will you details along the with targets process with are our

Operator, the questions. will now to we open call up

Operator

much. wait, with Beder we so While from SCC you Instructions] go [Operator Please first Research. go question, Thank our ahead. Eric we'll

Eric Beder

Good morning.

John Enwright

Hey, Eric.

Jacqueline Ardrey

Good morning.

Eric Beder

in terms along Hey. in Could that million? how this how much we expenses, $XX you And of year? the on far should incrementally -- I guess reduction see in you the of are talk

John Enwright

So million $XX we in pulled actually fiscal we saw the majority of initial 'XX. the through

to alluded her at additional remarks, of near prepared Jacquie are As end of looking opportunities. of kind kind the we

incentive built them. So that into that incremental we why there's compensation. of the that's identify with But range were just additional fully XXX gave some them to we the That's going our why haven't we to and associated expense we execute XXX normalizing opportunities that budget of range. costs offset we're after the think gave

Eric Beder

off should Okay. When in chain -- thinking Pura of you and about on I closures we store know talked you about Vera be Bradley store Vida this the a hold some look terms opening openings, what for year?

John Enwright

at we identified minimizing negotiations, now fixing stores less little close that landlords so to the some for But some stores out right that we're this our Yes, that. than to to as regards price we're a can close. to plan of towards the could to perspective three through Factory improving to see to of open or we XX probably with full we a bit sell-through from be closure have going closures work product rent going working we're we're or some those to Full-Line. working We're move but product look in little about if and number, we continue a that bit brand. more It

actively we're landlords conversations perspective, about So you Eric probably think a major number. of having to reduce from up with But it model some of can that XX. our

Eric Beder

it guess, mix the in should adjacencies, mentioned Bradley get stores and be of go be you the And product, so as terms doing? of, mentioned the to thinking kind in you what terms we to should Okay. product focused, what trying we be I category the more Vera of

Jacqueline Ardrey

too think you I in much short-term, Eric, won't So the change. see

customer product based data sales quickly too the our see making short-term, you can. adjustments timeline, on leverage we're we as data, much. of in kind as probably won't But we As development

little those decisions I think -- right not should may product now, we to what the little to to around future. want want just we adjacencies we may it's have right the a make data we the sure in now, the those a we different it What be. to that early have look make make drive data sure all But bit have decisions.

early So seeing on things count speculate think little a can a focused it's -- more our how projection. what different. I be But on from product to might outlook you

Bradley and So when we really the shop help come people our into Vera brand. clear important for they make what's want to stores

Eric Beder

going for you Okay. no Harry What’s your and -- collaborations both about with, to continued thinking you increased Thank the collaboration and kind Bradley of collaborations see to Bradley. is be you. going Pura longer Vida terms provide, in I in pieces. there of What's the can how partner Pura terms that know Potter Pura of and criteria relevance of have I they Vera Vida the forward customer. guess, to of your

Jacqueline Ardrey

Yes, that's future we're our to we want. that right looking really And a think for great the question, resonate customer now, I Eric. with partnerships

have all customers long-term our So to to IP how collaborations, using -- again, now those the what's we're input into using customers interacted define lineup. the what data with future past value of ended to up our work doing right be, that

Eric Beder

year. rest the and the Congrats with of luck Okay. good

John Enwright

Eric. Thanks,

Jacqueline Ardrey

you. Thank

Operator

And from Capital. next Gomes question you. our Noble Joe Thank comes from

Joe Gomes

Good for questions. thanks taking morning, and the

Jacqueline Ardrey

Good morning.

John Enwright

Joe. Thank you,

Joe Gomes

along kind question here of opening/closing. Bradley store follow on Vera and the wanted about the I to

past are guys how Or attract stores higher customer customer? the line mean, on Factory this doing have lose seeing You income that that those in income said the stores. that you stores? household the go the I are customers Factory to to are are as But if cut stores. stores? the line into attract -- customers factory household higher higher the full alone you household the not you income What the you to XX, opposed that's year XX%, full ones

Jacqueline Ardrey

effectively gap to that think that's brand the customers. that Yes, be that for great answer we to that's is I the able e-commerce we'll fill a those again, relying I and how help appealing we're really customers more identify demographic at think want on that to short And the that's our and, question. target to

Joe Gomes

Okay. Pardon me.

So you on categories. core talked the about focus

footwear in year been line, as the the footwear look had that did is One how you -- was at a would line of is in -- the how you quarter? as doing the your fourth a end of things it last end the the and; category that two, core do towards -- wondering: something look one, introduced

Jacqueline Ardrey

continue expansion a footwear about. very excited So be we and were to was product that excited about

footwear very started spring Our has off strong.

at identifying and again, only these look of we're really customer relationship and to but in happening a to going programs value all way, not So the driving time. to is what it's how in sales, targeted over her with

happening -- now. those right analysis So that's are that's

Joe Gomes

Vida a Okay. And Pura maybe second. to for switch over

of us one down. more side Vida looking to do going in on color and Pura challenges wholesale is happening we're that opposed over to quarter to the that account. for give detail Maybe turn just there was mentioned line, little the what as Vida could You of up you your a segment back the see Pura what wholesale

Jacqueline Ardrey

Sure.

Vera quarter saw retail to on Bradley environment I retail and our Bradley. case did had tightly. buy What to it some the due in qX, Vera seen that more than well. And on at did think much as Vida, early dollars hesitancy people is we But we've impact an since their from Pura our then, the in that definitely we in more partners. definitely a see partners positivity just just little was that the open holding macroeconomic

definitely the So the increase that year. pipeline since beginning seen that we've of

Joe Gomes

on where me. are? reduce projections John, are good That's from today Great what news. that level? the additional year-end a for is being more inventory even to one for for Seeing And think you is that looking job there you are inventory 'XX, on Do you fiscal we levels. are able last one, the the leverage where good

John Enwright

improve for look opportunities to turn. to we're No, going level continue reduce to I think our to debt

built drop flow levels expect from with is today. year's associated flow cash cash So where as inventory the free out to next it associated, guidance, the we we

Joe Gomes

great. that. for Okay, in you. back queue. I'll Thanks Thank get

Jacqueline Ardrey

you. Thank

Operator

like that, over any turn for remarks. call closing With I'd to Jacquie the to

Jacqueline Ardrey

Thank you.

are to cash and more Pura I our believe the generating the flow joining strong committed Vera We growth as have profitable convinced the long-term. very Since and of I'm enormous will to And Vera Bradley, that Bradley Inc. excited returning company, shareholders I'm deliver November, value future which brands about potential. than in over Vida company a ever, both to

portfolio culture. multigenerational and have brand two impressive brands, and solid of remarkable iconic devotion, loyalty lifestyle sheet We customers recognition, a a balance with extraordinary

to lifting I'm stronger heavy We emerge have company. XXXX, will but in fiscal that a some do we confident

our change in commitment our I want all their to great to to do work. place to they a for driving associates make company thank

We are one proud joining Forbes midsize we best of employers us Thank today look quarters you ahead. to in as our by progress once again and be forward to sharing recognized you the for with in the America.

Operator

gentlemen, Thank Ladies Have your that appreciate participation. and wonderful a We today's you. conference. does day. conclude

Vera Bradley (VRA) 8 Mar 232023 Q4 Earnings call transcript