Vera Bradley Q2 Results Miss Estimates; Shares Fall 10%

Vera Bradley (VRA) delivered second-quarter Fiscal 2022 results that fell short of Wall Street expectations. The company also warned that the retail environment remains uncertain amid supply chain challenges and an increase in freight charges. VRA shares fell 9.42% to close at $10.38 on September 1.

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Founded in 1982, Vera Bradley designs and sells women’s handbags, luggage, and other travel items. It also deals in home accessories and unique gifts. (See Vera Bradley stock charts on TipRanks)

Fiscal Q2 revenue increased 11.6% year-over-year to $147 million as Vera Bradley bounced back to pre-pandemic levels on a comparable basis. The increase came on customers responding to product innovations and sales for travel-related products bouncing back. However, revenue fell short of analyst expectations of $153.61 million.

Meanwhile, consolidated second-quarter net income landed at $9.5 million, or $0.28 per diluted share. Analysts were expecting earnings of $0.33 a share.

According to CEO Rob Wallstrom, Pura Vida revenues were negatively affected by the Apple iOS 14.5 update. The update impacted Facebook and Instagram advertising, which have been vital in driving sales.

Wallstrom stated, “Our team is working diligently to quickly diversify a portion of our marketing resources to other platforms, and consequently, we began to see Pura Vida direct-to-consumer sales volume build momentum throughout the balance of the second quarter and into the beginning of the third.”

For Fiscal 2022 Vera Bradley expects revenues to land at between $550 million and $565 million compared to $468.3 million delivered in Fiscal 2021. Consolidated diluted EPS is expected at between $0.80 and $0.95 compared to $0.63 for Fiscal 2021.

In June, Robert W. Baird analyst Mark Altschwager reiterated a Hold rating on the stock with a $14 price target, implying 34.87% upside potential to current levels.

Consensus among analysts is a Moderate Buy based on 1 Buy and 2 holds. The average Vera Bradley price target of $15 implies 44.51% upside potential to current levels.

VRA scores 8 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.