Vera Bradley Plummets On Q3 Earnings Miss, Weak Outlook

Vera Bradley Inc VRA reported third-quarter FY21 sales growth of 7.9% year-on-year, to $134.74 million, missing the analyst consensus of $138.01 million. Vera Bradley brand comparable sales rose nearly 8% over last year.
Adjusted EPS of $0.18 missed the analyst consensus of $0.26.
The gross margin contracted 550 basis points Y/Y to 53.6%. The operating margin was 5.9%, and operating income for the quarter declined 34.4% to $8 million.
The company held $75.3 million in cash and equivalents as of October 30, 2021. Cash provided by operating activities totaled $19.2 million.
"Like much of the industry, we continued to experience supply chain challenges and significantly increased freight expenses that put meaningful pressure on gross margin in the quarter," said CEO Rob Wallstrom.
Outlook: Vera Bradley sees FY22 sales of $546 million - $551 million (prior view $550 million - $565 million) versus the analyst consensus of $559.29 million.
The company expects FY22 EPS of $0.65 - $0.70 (prior view $0.80 - $0.95), below the consensus of $0.90.
Vera Bradley sees Q4 sales of $155 million - $160 million versus Street view of $165.6 million. The company expects Q4 EPS of $0.24 - $0.29, missing the consensus of $0.40.
Price Action: VRA shares are trading lower by 14.6% at $8.62 on the last check Wednesday.