vra-20220430

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________

FORM 10-Q

___________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended April 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From to

Commission File Number: 001-34918

___________________________

VERA BRADLEY, INC.

(Exact name of registrant as specified in its charter)

___________________________


Indiana						27-2935063
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

12420 Stonebridge Road, Roanoke, Indiana						46783
(Address of principal executive offices)						(Zip Code)

(877) 708-8372

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

___________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, without par value	VRA	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

The registrant had 31,458,289 shares of its common stock outstanding as of June 1, 2022.

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TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Balance Sheets as of April 30, 20 22 , and January 29 , 202 2	4

	Condensed Consolidated Statements of Operations for the Thirteen Weeks Ended April 30, 2022, and May 1 , 2021	5

	Condensed Consolidated Statements of Comprehensive Income for the Thirteen Weeks Ended April 30, 2022, and May 1, 2021	6

	Condensed Consolidated Statements of Shareholders' Equity for the Thirteen Weeks Ended April 30, 2022, and May 1, 2021	7

	Condensed Consolidated Statements of Cash Flows for the Thirte e n Weeks Ended April 30, 2022, and May 1, 2021	8

	Notes to the Condensed Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32

Item 4.	Controls and Procedures	32

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	33

Item 1A.	Risk Factors	33

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 5.	Other Information	34

Item 6.	Exhibits	35

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FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical or current fact included in this report are forward-looking statements. Forward-looking statements include references to our current expectations and projections relating to our financial condition, results of operations, plans, objectives, strategies, future performance, and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “might,” “will,” “should,” “can have,” and “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. For example, all statements we make relating to our estimated and projected earnings, revenues, costs, expenditures, cash flows, growth rates, and financial results, our plans and objectives for future operations, growth, initiatives, or strategies, or the expected outcome or impact of pending or threatened litigation are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including:

•possible adverse changes in general economic conditions and their impact on consumer confidence and consumer spending, including political unrest, social unrest, acts of war and terrorism, inflation, impacts related to variants of the novel coronavirus (COVID-19) outbreak, and other related matters;

•public health pandemics, including the continued outbreak of COVID-19 and actions to contain the spread of the virus by governmental or other actors;

•possible inability to successfully implement our long-term strategic plans;

•possible declines in our comparable sales;

•possible inability to maintain and enhance our brands;

•possible failure of our multi-channel distribution model;

•possible inability to predict and respond in a timely manner to changes in consumer demand;

•possible inability to successfully open new stores and/or operate current stores as planned;

•possible loss of key management associates or inability to attract and retain the talent required for our business;

•possible data security or privacy breaches or disruptions in our computer systems or website;

•possible disruptions in our supply chain;

•possible new or increased tariffs on our products that could lead to increased product costs and lower profit margins; and

•possible inability to successfully implement integration strategies related to the Pura Vida business and possible inability to derive expected benefits from or to successfully integrate any future business acquisition.

We derive many of our forward-looking statements from our operating plans and forecasts, which are based upon detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results.

For a discussion of the above described risks and uncertainties and other risks and uncertainties that could cause actual results to differ materially from those contained in our forward-looking statements, please refer to “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 29, 2022, as well as in Item 1A herein.

We caution you that the risks and uncertainties identified by us may not be all of the factors that are important to you. Furthermore, the forward-looking statements included in this report are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Vera Bradley, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)


	April 30, 2022		January 29, 2022
Assets
Current assets:
Cash and cash equivalents	$	63,987	$	88,436

Accounts receivable, net	20,115		20,681
Inventories	161,787		144,881
Income taxes receivable	3,466		9,391
Prepaid expenses and other current assets	17,458		15,928

Total current assets	266,813		279,317
Operating right-of-use assets	79,827		79,873
Property, plant, and equipment, net	60,032		59,941
Intangible assets, net	43,454		44,223
Goodwill	44,254		44,254

Deferred income taxes	3,980		3,857
Other assets	5,337		6,081
Total assets	$	503,697	$	517,546
Liabilities, Redeemable Noncontrolling Interest, and Shareholders’ Equity
Current liabilities:
Accounts payable	$	39,327	$	30,492
Accrued employment costs	7,897		12,463
Short-term operating lease liabilities	17,288		18,699

Other accrued liabilities	17,298		16,422


Total current liabilities	81,810		78,076


Long-term operating lease liabilities	81,513		80,861

Other long-term liabilities	168		195
Total liabilities	163,491		159,132
Commitments and contingencies
Redeemable noncontrolling interest	31,092		30,974
Shareholders’ equity:
Preferred stock; 5,000 shares authorized, no shares issued or outstanding	—		—
Common stock, without par value; 200,000 shares authorized, 42,834 and 42,429 shares issued and 32,152 and 33,170 shares outstanding, respectively	—		—
Additional paid-in-capital	107,040		107,907
Retained earnings	327,390		334,364
Accumulated other comprehensive loss	(60)		(29)
Treasury stock	(125,256)		(114,802)
Total shareholders’ equity of Vera Bradley, Inc.	309,114		327,440
Total liabilities, redeemable noncontrolling interest, and shareholders’ equity	$	503,697	$	517,546

The accompanying notes are an integral part of these financial statements.

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Vera Bradley, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)


	Thirteen Weeks Ended
	April 30, 2022		May 1, 2021
Net revenues	$	98,459	$	109,094
Cost of sales	45,945		49,930
Gross profit	52,514		59,164
Selling, general, and administrative expenses	60,914		60,896
Other income (loss), net	167		(227)
Operating loss	(8,233)		(1,959)
Interest expense, net	40		90
Loss before income taxes	(8,273)		(2,049)
Income tax benefit	(1,563)		(531)
Net loss	(6,710)		(1,518)
Less: Net income attributable to redeemable noncontrolling interest	264		627
Net loss attributable to Vera Bradley, Inc.	$	(6,974)	$	(2,145)

Basic weighted-average shares outstanding	32,672		33,590
Diluted weighted-average shares outstanding	32,672		33,590

Basic net loss per share available to Vera Bradley, Inc. common shareholders	$	(0.21)	$	(0.06)
Diluted net loss per share available to Vera Bradley, Inc. common shareholders	$	(0.21)	$	(0.06)

The accompanying notes are an integral part of these financial statements.

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Vera Bradley, Inc.

Condensed Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)


	Thirteen Weeks Ended
	April 30, 2022		May 1, 2021
Net loss	$	(6,710)	$	(1,518)
Unrealized loss on available-for-sale debt investments	—		(2)
Cumulative translation adjustment	(31)		(6)
Comprehensive loss, net of tax	(6,741)		(1,526)
Less: Comprehensive income attributable to redeemable noncontrolling interest	264		627
Comprehensive loss attributable to Vera Bradley, Inc.	$	(7,005)	$	(2,153)

The accompanying notes are an integral part of these financial statements.

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Vera Bradley, Inc.

Condensed Consolidated Statements of Shareholders’ Equity

(in thousands, except share data)

(unaudited)


	Number of Shares
	Common Stock	Treasury Stock	Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Shareholders’ Equity of Vera Bradley, Inc.
Balance at January 29, 2022	33,170,430	9,258,741	$	107,907	$	334,364	$	(29)	$	(114,802)	$	327,440
Net loss attributable to Vera Bradley, Inc.	—	—	—		(6,974)		—		—		(6,974)
Translation adjustments	—	—	—		—		(31)		—		(31)

Restricted shares vested, net of repurchase for taxes	404,469	—	(1,410)		—		—		—		(1,410)
Stock-based compensation	—	—	543		—		—		—		543
Treasury stock purchased	(1,423,096)	1,423,096	—		—		—		(10,454)		(10,454)

Balance at April 30, 2022	32,151,803	10,681,837	$	107,040	$	327,390	$	(60)	$	(125,256)	$	309,114


	Number of Shares
	Common Stock	Treasury Stock	Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Shareholders’ Equity of Vera Bradley, Inc.
Balance at January 30, 2021	33,414,490	8,393,207	$	105,433	$	316,526	$	8	$	(107,060)	$	314,907
Net loss attributable to Vera Bradley, Inc.	—	—	—		(2,145)		—		—		(2,145)
Translation adjustments	—	—

SEC Form 10-Q filed by Vera Bradley Inc.