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Category: Stock Market and Vera Bradley
Date: 12 December 2019 Stock Price: $11.03 We take a look at the 3rd quarter earnings for their 2020 fiscal year of Vera Bradley, the handbag and luggage and travel items designer. Will this earnings report stop the continued slide in Vera Bradley's stock price.
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About Vera Bradley
Vera Bradley is a leading designer of women’s handbags, luggage and travel items, fashion and home accessories, and unique gifts. Founded in 1982 by friends Barbara Bradley Baekgaard and Patricia R. Miller, the brand’s innovative designs, iconic patterns, and brilliant colors continue to inspire and connect women unlike any other brand in the global marketplace. Vera Bradley offers a multi-channel sales model as well as a focus on service and a high level of customer engagement The Company’s commitment to bringing more beauty into women’s lives includes its dedication to breast cancer research through the Vera Bradley Foundation for Breast Cancer.
Overview of Vera Bradley's 3rd quarter 2020 earnings report
The numbers we are interested in (for the quarter):
- Net revenues: $127.501 million ($97.688 million up from the same quarter of the previous year)
- Net revenues increased by 30.5% over the last 12 months
- Cost of sales: $59.631 million (up from $40.536 million for the same quarter of the previous year)
- Cost of sales increased by 47.1% over the last 12 months
- Net income attributable to Vera Bradley, Inc: $139 thousand (down from $4.226 million for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 34.114 million (down from 35.496 million for the same quarter of the previous year)
- Diluted net income per share attributable to Vera Bradley, Inc. : $0.00 (down from $0.12 for the same quarter of the previous year)
- Cash and cash equivalents: $25.999 million
- Cash and cash equivalents per share: $0.76
- Cash and cash equivalents makes up 6.9% of Vera Bradley's current market capital
- Cash and cash equivalents makes up 4.88% of Vera Bradley's total assets
- Inventories : $133.964 (up from $91.581 million for the same quarter of the previous year)
- Inventories makes up 25.2% of Vera Bradley's total assets.
- Inventories grew by 46.3% over the last year (possibly due to acquisitions of other brands)
- Total shareholders' equity of Vera Bradley, Inc.: $292.048million
- Shareholders' equity per share: $9.38
- So Vera Bradley is trading at 1.18 times its stockholders equity per share which is outside the expected range of between 2 and 4 times that most firms tend to trade at.
Vera Bradley's management commentary on the results and earnings guidance
FORT WAYNE, Ind., Dec. 11, 2019 (GLOBE NEWSWIRE) -- Vera Bradley, Inc. (Nasdaq: VRA) (“Vera Bradley” or the “Company”) today announced its financial results for the third quarter and nine months ended November 2, 2019.
Pura Vida Acquisition and Accounting
In the Company’s second fiscal quarter (on July 16, 2019), Vera Bradley acquired a 75% interest in Creative Genius, Inc., which also operates under the name Pura Vida Bracelets (“Pura Vida”). Pura Vida, based in La Jolla, California, is a rapidly growing, digitally native, and highly engaging lifestyle brand that deeply resonates with its loyal consumers. The Pura Vida brand has a differentiated and expanding offering of bracelets, jewelry, and other lifestyle accessories.
Financial results for Pura Vida have been consolidated beginning July 17, 2019, the first full day following the acquisition. The third quarter is the first full quarter reflecting the acquisition. Prior period numbers have not been restated. Any reference to the results of Vera Bradley in this release refers to results of the stand-alone Vera Bradley business (comprised of the Vera Bradley Direct and Indirect segments) and excludes Pura Vida. Any reference to the results of Vera Bradley, Inc. refers to the combined results of Vera Bradley and Pura Vida.
Pura Vida Acquisition and Accounting
In the Company’s second fiscal quarter (on July 16, 2019), Vera Bradley acquired a 75% interest in Creative Genius, Inc., which also operates under the name Pura Vida Bracelets (“Pura Vida”). Pura Vida, based in La Jolla, California, is a rapidly growing, digitally native, and highly engaging lifestyle brand that deeply resonates with its loyal consumers. The Pura Vida brand has a differentiated and expanding offering of bracelets, jewelry, and other lifestyle accessories.
Financial results for Pura Vida have been consolidated beginning July 17, 2019, the first full day following the acquisition. The third quarter is the first full quarter reflecting the acquisition. Prior period numbers have not been restated. Any reference to the results of Vera Bradley in this release refers to results of the stand-alone Vera Bradley business (comprised of the Vera Bradley Direct and Indirect segments) and excludes Pura Vida. Any reference to the results of Vera Bradley, Inc. refers to the combined results of Vera Bradley and Pura Vida.
Rob Wallstrom, Chief Executive Officer of Vera Bradley, noted, “Both of our brands – Vera Bradley and Pura Vida – had a strong third quarter performance. Vera Bradley’s comparable sales, full-price selling, and customer count once again rose in the quarter, and Pura Vida’s sales were at the high end of our expectations. As a result, our consolidated non-GAAP diluted EPS of $0.20 was at the top of our guidance range and nearly 70% higher than last year’s third quarter diluted EPS of $0.12.”
“The addition of the Pura Vida business to the Vera Bradley, Inc. portfolio has strengthened our positon as a unique lifestyle company,” Wallstrom continued. “We are sharing resources and expertise as we grow our brands together. Pura Vida is a great strategic fit for Vera Bradley with their expertise in social media and other digital marketing strategies, and Pura Vida has already begun to leverage Vera Bradley’s infrastructure, partnerships, and back office support services to bolster its growth.”
“The addition of the Pura Vida business to the Vera Bradley, Inc. portfolio has strengthened our positon as a unique lifestyle company,” Wallstrom continued. “We are sharing resources and expertise as we grow our brands together. Pura Vida is a great strategic fit for Vera Bradley with their expertise in social media and other digital marketing strategies, and Pura Vida has already begun to leverage Vera Bradley’s infrastructure, partnerships, and back office support services to bolster its growth.”
Vera Bradley (NASDAQ: VRA) stock price history
The image below, obtained from Google shows the stock price history over the last 5 years of Vera Bradley (NASDAQ:VRA). And as the image shows its not been a very good time for stockholders over the last 5 years. 5 years ago the stock of Vera Bradley was trading at $21.40 and its currently trading at $11.03. That's a loss of -% suffered by Vera Bradley stockholders over the last 5 years.
The stock of Vera Bradley is trading at slightly closer to its 52 week high than it is to its 52 week low which to us is an indication that the short term sentiment and momentum of Vera Bradley stock is slightly positive.
The stock of Vera Bradley is trading at slightly closer to its 52 week high than it is to its 52 week low which to us is an indication that the short term sentiment and momentum of Vera Bradley stock is slightly positive.
Recent coverage of Vera Bradley
The extract below covers the latest regarding Vera Bradley
Shares of women's bag maker Vera Bradley (VRA) - Get Report were dropping nearly 14% in trading Wednesday after the company reported second-quarter results below analysts' expectations. The company reported consolidated net income of $8.7 million, or 25 cents a share, which was on the low end of the company's own guidance of between 25 cents and 28 cents. Revenue for the period totaled $119.8 million.
Analysts were expecting the company to report earnings of 27 cents a share on revenue of $117.35 million. "Retail remains challenging, particularly in the Indirect channel as our partners continue to feel the pressure of a difficult environment, and our total sales fell slightly below our expectations. In addition, gross margins continue to be pressured by increasing tariffs and higher shipping costs," said CEO Rob Wallstrom.
For the third quarter, the company expects revenue between $122 million and $129 million, which includes revenue between $23 million and $25 million from bracelet maker Pura Vida, which it purchased for $75 million in June.
Read the full article here
Shares of women's bag maker Vera Bradley (VRA) - Get Report were dropping nearly 14% in trading Wednesday after the company reported second-quarter results below analysts' expectations. The company reported consolidated net income of $8.7 million, or 25 cents a share, which was on the low end of the company's own guidance of between 25 cents and 28 cents. Revenue for the period totaled $119.8 million.
Analysts were expecting the company to report earnings of 27 cents a share on revenue of $117.35 million. "Retail remains challenging, particularly in the Indirect channel as our partners continue to feel the pressure of a difficult environment, and our total sales fell slightly below our expectations. In addition, gross margins continue to be pressured by increasing tariffs and higher shipping costs," said CEO Rob Wallstrom.
For the third quarter, the company expects revenue between $122 million and $129 million, which includes revenue between $23 million and $25 million from bracelet maker Pura Vida, which it purchased for $75 million in June.
Read the full article here
Vera Bradley (NASDAQ: VRA) latest stock valuation
So based on the group's latest earnings results which showed a decline in the earnings per share compared to a year ago, and their outlook provided, we have a target price on Vera Bradley shares of $13.88. We therefore believe the the stock of Vera Bradley is undervalued at its current price and we expect it to trend upwards towards our target price in coming weeks and months. The valuation is based on the assumption that earnings growth will match revenue growth and this is pegged at around 3,3% according to the group's comments on the earnings
Next earnings release of Vera Bradley
It is expected that Vera Bradley will release their 4th quarter and full fiscal 2020 earnings report in early March 2020