vra-20230429

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 29, 2023


☐			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 30,915,493 shares of its common stock outstanding as of May 31, 2023.

Table of Contents

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Balance Sheets as of April 29, 202 3 , and January 2 8 , 202 3	4

	Condensed Consolidated Statements of Operations for the Thirteen Weeks Ended April 29, 2023 , and April 30 , 202 2	5

	Condensed Consolidated Statements of Comprehensive Loss for the Thirteen Weeks Ended April 29, 2023 , and April 30, 2022	6

	Condensed Consolidated Statements of Shareholders' Equity for the Thirteen Weeks Ended April 29, 2023 , and April 30, 2022	7

	Condensed Consolidated Statements of Cash Flows for the T h irteen Weeks Ended April 29, 2023 , and A pril 30, 202 2	8

	Notes to the Condensed Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

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 6.	Exhibits	35

Table of Contents

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 inability to successfully implement our long-term strategic plans, including Project Restoration;

•possible declines in our comparable sales;

•possible inability to maintain and enhance our brands;

•possible failure of our multi-channel distribution model;

•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, and other related matters;

•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 or design 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 websites;

•possible disruptions in our supply chain;

•possible new or increased tariffs on our products and increases in inbound and outbound freight expense that could lead to increased product costs and lower profit margins; and

•public health pandemics and actions by governmental or other actors regarding containment.

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 28, 2023, 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.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Vera Bradley, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)


	April 29, 2023		January 28, 2023
Assets
Current assets:
Cash and cash equivalents	$	25,338	$	46,595

Accounts receivable, net	20,241		22,105
Inventories	142,742		142,275
Income taxes receivable	4,167		1,311
Prepaid expenses and other current assets	15,108		14,276

Total current assets	207,596		226,562
Operating right-of-use assets	75,148		77,954
Property, plant, and equipment, net	57,791		58,674
Intangible assets, net	15,189		15,918


Deferred income taxes	21,089		21,542
Other assets	3,117		3,851
Total assets	$	379,930	$	404,501
Liabilities, Redeemable Noncontrolling Interest, and Shareholders’ Equity
Current liabilities:
Accounts payable	$	16,536	$	20,350
Accrued employment costs	10,356		14,312
Short-term operating lease liabilities	20,280		19,714

Other accrued liabilities	13,425		12,723
Income taxes payable	390		558

Total current liabilities	60,987		67,657


Long-term operating lease liabilities	71,870		74,664

Other long-term liabilities	81		90
Total liabilities	132,938		142,411
Commitments and contingencies
Redeemable noncontrolling interest	—		10,712
Shareholders’ equity:
Preferred stock; 5,000 shares authorized, no shares issued or outstanding	—		—
Common stock, without par value; 200,000 shares authorized, 43,176 and 42,846 shares issued and 30,968 and 30,766 shares outstanding, respectively	—		—
Additional paid-in-capital	110,753		109,718
Retained earnings	269,950		274,629
Accumulated other comprehensive loss	(115)		(105)
Treasury stock	(133,596)		(132,864)
Total shareholders’ equity of Vera Bradley, Inc.	246,992		251,378
Total liabilities, redeemable noncontrolling interest, and shareholders’ equity	$	379,930	$	404,501

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

Table of Contents

Vera Bradley, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)


	Thirteen Weeks Ended
	April 29, 2023		April 30, 2022
Net revenues	$	94,362	$	98,459
Cost of sales	42,613		45,945
Gross profit	51,749		52,514
Selling, general, and administrative expenses	58,506		60,914

Other income, net	371		167
Operating loss	(6,386)		(8,233)
Interest expense, net	32		40
Loss before income taxes	(6,418)		(8,273)
Income tax benefit	(1,739)		(1,563)
Net loss	(4,679)		(6,710)
Less: Net income attributable to redeemable noncontrolling interest	—		264
Net loss attributable to Vera Bradley, Inc.	$	(4,679)	$	(6,974)

Basic weighted-average shares outstanding	30,794		32,672
Diluted weighted-average shares outstanding	30,794		32,672

Basic net loss per share available to Vera Bradley, Inc. common shareholders	$	(0.15)	$	(0.21)
Diluted net loss per share available to Vera Bradley, Inc. common shareholders	$	(0.15)	$	(0.21)

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

Table of Contents

Vera Bradley, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(unaudited)


	Thirteen Weeks Ended
	April 29, 2023		April 30, 2022
Net loss	$	(4,679)	$	(6,710)

Cumulative translation adjustment	(10)		(31)
Comprehensive loss, net of tax	(4,689)		(6,741)
Less: Comprehensive income attributable to redeemable noncontrolling interest	—		264
Comprehensive loss attributable to Vera Bradley, Inc.	$	(4,689)	$	(7,005)

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

Table of Contents

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 28, 2023	30,766,024	12,079,690	$	109,718	$	274,629	$	(105)	$	(132,864)	$	251,378
Net loss attributable to Vera Bradley, Inc.	—	—	—		(4,679)		—		—		(4,679)
Translation adjustments	—	—	—		—		(10)		—		(10)

Restricted shares vested, net of repurchase for taxes	330,500	—	(942)		—		—		—		(942)
Stock-based compensation	—	—	691		—		—		—		691
Treasury stock purchased	(128,100)	128,100	—		—		—		(732)		(732)
Purchase of noncontrolling interest equity adjustment	—	—	1,286		—		—		—		1,286
Balance at April 29, 2023	30,968,424	12,207,790	$	110,753	$	269,950	$	(115)	$	(133,596)

SEC Form 10-Q filed by Vera Bradley Inc.