Vera Bradley's Q4 Highlights: Earnings Beat, 1.7% Top-Line Decline, Margin Pressure, Mixed Outlook & More

Vera Bradley, Inc. VRA reported a fourth-quarter FY23 revenue decline of 1.7% year-over-year to $147.09 million, beating the consensus of $137.51 million.
Adjusted EPS was $0.16, nearly flat with last year, beating the estimate of $0.15.
Gross margin contracted 1,009 basis points Y/Y to 40.8%, negatively affected by higher inbound and outbound freight expense and increased promotional activity, partially offset by price increases.
Adjusted SG&A expense was $64.4 million, or 43.8% of net revenues, compared to $67.1 million, or 44.8% of net revenues in 4Q22.
Adjusted operating income was $7 million (-23.1% Y/Y) with an operating margin of 4.8%, compared to 6.1% in the prior year.
The company held $46.6 million in cash and equivalents as of Jan. 28, 2023, and no debt.
During the quarter, the company repurchased ~$0.8 million of its shares, which brings the fiscal total to $18.1 million. VRA's $50 million share repurchase authorization expires in December 2024.
"We anticipate the Fiscal 2024 macroeconomic environment to continue to be unpredictable and that this year will be a rebuilding year for both of our brands. We expect to take advantage of gross margin improvement opportunities and manage our expense structure diligently", commented CEO Jackie Ardrey.
FY24 Outlook: Vera Bradley is not providing detailed guidance for the first fiscal quarter of 2024 but expects revenues and loss per share to be approximately in line with the prior year.
VRA sees FY24 revenues of $490 million - $510 million, compared to a consensus of $507.77 million. It sees EPS of $0.40 - $0.50 vs. consensus of $0.35.
It expects a consolidated gross profit percentage of 52.6% - 53.6%, operating income of $17.3 million - $21.7 million, and Free cash flow of $25 million - $30 million.
Price Action: VRA shares are trading higher by 5.70% at $5.75 on the last check Wednesday.

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