Vera Bradley Stock Down After Q3 Earnings Miss: Retail’s Optimistic

Shares of Vera Bradley ($VRA) dipped 11% on Wednesday after the maker of handbags and fashion accessories reported worse-than-expected third-quarter earnings, missing Wall Street estimates, but retail sentiment remained extremely bullish.

The company posted loss per share of $0.27 versus the expected earnings per share of $0.06 quoted by Wall Street analysts. Its revenue came in at $80.58 million, below the estimated $98.7 million.

Its direct segment revenues totaled $52.5 million, falling by 27.4% year over year (YoY). Comparable sales declined 27.2% YoY, with the company experiencing weakness in all direct channels.

“The third quarter was extremely challenging as we remained in the early stages of ‘Project Restoration,’ our strategic initiative to transform our business model and transition Vera Bradley’s brand positioning,” Jackie Ardrey, CEO, said.

“With the current consumer mindset focused on value, we have more work ahead of us on our repositioning journey…With the launch of our Holiday assortments late in the third quarter, and the strategic promotional adjustments we executed, we are experiencing a steady trendline improvement across the majority of our Vera Bradley direct-to-consumer channels in Q4, as well as in our wholesale channels.”

Retail sentiment on the Vera Bradley stock remained ‘extremely bullish’ despite the stock’s decline and downbeat messaging.

VRA sentiment meter and message volumes on Dec 11 as of 4:40 pm ET

Ardrey highlighted the company is entering the fourth quarter with no debt and $13.7 million in cash.

Vera’s board approved an additional $30.0 million repurchase authorization, which will begin at the expiration of the current authorization and extend for three years.

It also stated that it doesn’t plan to purchase shares under its remaining 2024 Share Repurchase Program but expects to use the newly approved share repurchase authorization in the future, depending on market conditions.

In October, Vera Bradley adopted a shareholder rights plan and declared a one-time dividend to each of the company's issued and outstanding shares of common stock, the Fly.com reported.

The dividend was payable to the shareholders of record at the close of business on October 21. Despite the attempt to reward and encourage long-term shareholders to stay invested, shares are down over 8% since then.

Vera Bradley stock is down 36% year-to-date.