Vera Bradley posts surprise profit thanks to masks, e-commerce and Pura Vida
Despite the challenges posed by Covid-19, Fort Wayne, Indiana-based accessories company Vera Bradley, Inc. achieved net income of $7.2 million, or $0.42 per diluted share in the second quarter ended August 1, 2020, up from $5.9 million, or $0.17 per diluted share, in the prior-year period. Progress at the group was driven by mask sales, e-commerce and the recently acquired Pura Vida brand.
Consolidated net revenues for the quarter totaled $131.8 million, increasing 10.0% from $119.8 million in the same period in the previous year. Pura Vida, which was acquired in July 2019, accounted for $32.8 million in revenue in the quarter, up from $5.4 million in the same quarter last year.
Vera Bradley brand direct segment revenues were $81.2 million, decreasing 13.9% from $94.4 million. The decline reflected the fact that, in the aggregate, Vera Bradley stores were closed for approximately half of the second quarter, a negative impact which was partially offset by a 99.1% increase in e-commerce sales.
As of the end of the second quarter, 144 out of Vera Bradley’s 147 company-operated full-line and factory stores have reopened.
Quarterly Vera Bradley indirect segment revenues came to $17.7 million, falling 11.4% year over year from $20.0 million.
“I am extremely pleased with our second quarter results, which significantly exceeded our expectations and last year’s performance, despite facing the headwinds of Covid-19,” said Vera Bradley CEO Rob Wallstrom in a release. “At both Vera Bradley and Pura Vida, customers responded to new product launches and marketing initiatives, and cotton masks also drove meaningful revenue growth.”
Vera Bradley’s consolidated net revenues for the first half of the fiscal year totaled $201.1 million, including a $54.0 million contribution from Pura Vida. Excluding Pura Vida, the company’s net revenues were $147.0 million, up from $205.4 million in the same six-month period in the previous year.
Direct segment revenues at the Vera Bradley brand came to $118.1 million, falling 28.7% from $165.5 million, while indirect segment revenues were $29.0 million, representing a 27.4% decline from $39.9 million.
First-half net loss at the company came to $8.1 million, or $0.24 per diluted share, compared to a net income of $3.4 million, or $0.10 per diluted share, in the prior-year period.
Due to continued uncertainty surrounding the ongoing coronavirus pandemic, Vera Bradley has not provided financial guidance for the third quarter or the full fiscal year.
Following the announcement of the company’s surprise second-quarter profit, shares in Vera Bradley shot up 18% in premarket trading on Wednesday.
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