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1. Company Snapshot

1.a. Company Description

Vera Bradley, Inc., together with its subsidiaries, designs, manufactures, and sells women's handbags, luggage and travel items, fashion and home accessories, and gifts.It operates through three segments: Vera Bradley Direct, Vera Bradley Indirect, and Pura Vida.The company offers bag products, such as totes, crossbodies, satchels, clutches, backpacks, baby bags, and lunch bags; accessories, including wallets, wristlets, eyeglass cases, scarves, and various technology accessories; bracelets, rings, and necklaces under Pura Vida brand name; and travel products consisting of rolling luggage, cosmetics, and travel and packing accessories, as well as travel bags comprising duffel and weekend bags.


It also provides home products that include throw blankets, beach towels, and comforters, as well as items, such as mugs and tumblers; apparel/footwear comprising sleepwear, footwear, cotton face masks, outerwear, socks, and scarves; and stationery and merchandising products, as well as freight, licensing, and gift card breakage services.The company sells its Vera Bradley branded products through its full-line and factory outlet stores in the United States; and verabradley.com, an online outlet site, as well as its annual outlet sale in Fort Wayne, Indiana.As of January 29, 2022, it operated 70 full-line and 75 factory outlet stores.


The company sells its Pura Vida branded products through wholesale retailers, as well as through Pura Vida websites, including www.puravidabracelets.com, www.puravidabracelets.eu, and www.puravidabracelets.ca.It also sells its Vera Bradley branded products to approximately 1,800 specialty retail locations, department stores, national accounts, third party e-commerce sites, and third-party inventory liquidators, as well as through licensing agreements.Vera Bradley, Inc.


was incorporated in 1982 and is headquartered in Roanoke, Indiana.

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1.b. Last Insights on VRA

Here is a 90-word analysis of the negative drivers behind Vera Bradley's recent performance: Vera Bradley's Q3 loss of $0.27 per share, missing estimates, was driven by declining sales and high operating expenses. The company's financial condition remains strong with no debt and $89 million in liquidity, but sales continue to decline. Management missteps and failed strategic plans have contributed to the company's struggles. Additionally, activist investor Fund 1 Investments LLC, the largest shareholder, is pushing for strategic alternatives, highlighting the need for change. The company's appointment of Andrew Meslow, former CEO of Bath and Body Works, to the Board may bring fresh perspective, but near-term challenges persist.

1.c. Company Highlights

2. Vera Bradley's Turnaround Efforts Show Early Signs of Progress

Vera Bradley, Inc.'s third-quarter fiscal 2026 revenues came in at $62.3 million, representing an 11.7% decline from the prior year. The direct business segment revenues were $49.7 million, down 5.3% from the previous year. The net loss from continuing operations was $8.3 million, or $0.30 per diluted share, compared to a net loss of $3.7 million, or $0.13 per diluted share, in the prior year. The actual EPS of -$0.30 missed estimates of -$0.11. The company's gross margin was impacted by a $5.9 million inventory write-down related to the brand's strategic product shift toward cotton and heritage prints.

Publication Date: Dec -20

📋 Highlights
  • Revenue Decline: Q3 revenues fell to $62.3 million, an 11.7% decrease from $70.5 million in the prior year.
  • Direct Segment Performance: Direct segment revenue dropped 5.3% to $49.7 million, but saw sequential improvement with positive comparable sales in brand channels.
  • Project Sunshine Progress: Cotton refocus and social-first marketing drove new customer acquisition, expanding social media reach by 35% compared to previous strategies.
  • Financial Losses: Net loss widened to $8.3 million ($0.30 per share) vs. $3.7 million ($0.13 per share) last year, driven by $9.9 million in inventory/write-offs.
  • Inventory Reduction: Inventory levels fell 24.3% YoY to $82.9 million, with a target to improve turns to 2-3 over 12-18 months.

Operational Highlights

The company's direct segment showed sequential improvement in key metrics across nearly all channels, with positive comparable channel sales in brand channels. The refocused investment in cotton was a key driver of performance during Q3, and the shift to a social-first marketing approach delivered measurable results, driving new customer acquisition on vb.com while expanding social media reach.

Project Sunshine and Outlet 2.0

The company remains committed to Project Sunshine, with a focus on product reinvention, critical function, and heritage-inspired prints. Outlet 2.0 has shown positive results, with seven pilot stores receiving positive qualitative feedback from teams and customers. The company plans to refine the concept further through store visits and customer intercepts.

Valuation and Future Prospects

With a P/S Ratio of 0.23 and an EV/EBITDA of -4.2, the market appears to have priced in significant challenges for the company. Analysts estimate next year's revenue growth at -30.4%. The company's focus on disciplined expense control, inventory management, and strategic initiatives is expected to lead to improved performance and enhanced shareholder value over the long term.

Balance Sheet and Cash Flow

The company's balance sheet shows cash and cash equivalents at $10.7 million, with borrowings of $10 million on its $75 million ABL facility at quarter-end. Inventory decreased year-over-year by 24.3% to $82.9 million. The company is targeting a turns rate of greater than two to three over the next twelve to eighteen months.

3. NewsRoom

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Vera Bradley (NASDAQ:VRA) Stock Crosses Above 200-Day Moving Average – Time to Sell?

Jan -30

Source: defenseworld.net

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New Strong Sell Stocks for Jan. 15

Jan -15

Source:

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Comparing Li Ning (OTCMKTS:LNNGY) and Vera Bradley (NASDAQ:VRA)

Jan -10

Source: defenseworld.net

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Vera Bradley Goes Back to Its Whimsical Roots

Jan -02

Source: wsj.com

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Vera Bradley Returns To Its Core, But It Remains Fairly Challenged

Dec -13

Source: seekingalpha.com

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Vera Bradley, Inc. (VRA) Q3 2026 Earnings Call Transcript

Dec -11

Source: seekingalpha.com

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Vera Bradley (VRA) Reports Q3 Loss, Beats Revenue Estimates

Dec -11

Source: zacks.com

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Vera Bradley Announces Third Quarter Fiscal Year 2026 Results

Dec -11

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.77%)

6. Segments

Vera Bradley Direct

Expected Growth: 4.83%

Vera Bradley Direct's 4.83% growth is driven by increasing online presence, strategic marketing efforts, and expanding product offerings. The brand's strong e-commerce platform, loyalty program, and targeted promotions contribute to higher sales. Additionally, the company's focus on digital marketing, social media engagement, and influencer partnerships enhance brand awareness, attracting new customers and driving revenue growth.

Pure Vida

Expected Growth: 9.9%

Pure Vida's 9.9% growth is driven by increasing demand for stylish, functional, and affordable jewelry. Strong brand recognition, effective social media marketing, and strategic partnerships contribute to its success. Additionally, the brand's focus on empowering women and donating a portion of proceeds to charitable causes resonates with consumers, fostering loyalty and driving sales.

Vera Bradley Indirect

Expected Growth: 4.83%

Vera Bradley Indirect's 4.83% growth is driven by increasing online sales, expanded product offerings, and strategic partnerships. The brand's strong e-commerce platform and social media presence have enhanced customer engagement, while new product categories, such as pet accessories, have attracted a broader customer base.

7. Detailed Products

Bags

Vera Bradley offers a wide range of stylish and functional bags, including totes, backpacks, crossbody bags, and more, designed to fit various lifestyles and preferences.

Accessories

Vera Bradley's accessories collection includes wallets, phone cases, keychains, and more, designed to complement their iconic bags and add a touch of personality to any outfit.

Travel

Vera Bradley's travel collection features durable and stylish luggage, travel bags, and packing accessories designed to make traveling easier and more enjoyable.

Home and Campus

Vera Bradley's home and campus collection includes decorative items, storage solutions, and organizational tools designed to add a touch of personality to any room.

8. Vera Bradley, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Vera Bradley's products are moderately substitutable, as customers can opt for other brands or alternatives. However, the company's strong brand reputation and loyal customer base mitigate this threat.

Bargaining Power Of Customers

Vera Bradley's customers have relatively low bargaining power due to the company's strong brand reputation and loyal customer base. Customers are willing to pay a premium for the company's high-quality products.

Bargaining Power Of Suppliers

Vera Bradley's suppliers have moderate bargaining power due to the company's dependence on a few key suppliers. However, the company's strong relationships with suppliers and its ability to negotiate prices mitigate this threat.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the industry, including the need for significant capital investment and the difficulty of replicating Vera Bradley's strong brand reputation.

Intensity Of Rivalry

The intensity of rivalry in the industry is high due to the presence of several established competitors. Vera Bradley faces intense competition from other brands, which can lead to pricing pressure and decreased market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 23.76%
Debt Cost 3.95%
Equity Weight 76.24%
Equity Cost 13.34%
WACC 11.11%
Leverage 31.16%

11. Quality Control: Vera Bradley, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Weyco

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Growth: 5.9

Quality: 7.1

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Momentum: 3.0

Volatility: 5.0

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Hooker Furnishings

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Wolverine World Wide

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Value: 5.0

Growth: 2.8

Quality: 5.1

Yield: 4.0

Momentum: 2.5

Volatility: 2.3

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Caleres

A-Score: 3.5/10

Value: 7.9

Growth: 3.7

Quality: 3.5

Yield: 3.0

Momentum: 0.0

Volatility: 3.0

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Vera Bradley

A-Score: 2.9/10

Value: 10.0

Growth: 0.7

Quality: 4.0

Yield: 0.0

Momentum: 1.5

Volatility: 1.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.61$

Current Price

2.61$

Potential

-0.00%

Expected Cash-Flows