FORT WAYNE, Ind., Dec. 7, 2010 (GLOBE NEWSWIRE) -- Vera Bradley, Inc. (Nasdaq:VRA) today announced its financial results for the fiscal 2011 third quarter ended October 30, 2010.
Third Quarter Highlights
- Revenues increased 26% to $91.6 million, with Indirect revenues increasing 10% and Direct revenues increasing 74%, including an increase of 32.5% in comparable-store sales.
- On a GAAP basis, the operating loss was $0.2 million, which included a one-time charge of $15.7 million related to restricted-stock awards that vested upon the completion of the Company's IPO on October 21, 2010. On an adjusted basis, excluding this one-time charge, operating income increased 17% to $15.5 million.
- On a GAAP basis, diluted EPS was $0.17 for the quarter, compared to $0.36 for the same period of the prior year. On an adjusted basis, excluding the restricted-stock charge and including an adjustment for income taxes, diluted EPS was $0.25 on 36.2 million weighted-average shares outstanding, compared to $0.22 on 35.4 million weighted-average shares outstanding in the comparable prior-year period.
"We are pleased with our strong financial results for the third quarter, our first as a public company," said Mike Ray, Vera Bradley's Chief Executive Officer. "Our solid sales momentum continued during the quarter, reflecting the strength and expanding appeal of our brand, the ongoing loyalty of our customers, and the strong response to our product offerings. Looking ahead, we remain focused on executing our growth strategies, which include expanding our product offerings and growing in underpenetrated markets in our Indirect and Direct channels."
Third Quarter Results
Vera Bradley reported net revenues of $91.6 million for the third quarter, compared to $72.8 million in the same period of the prior year, an increase of $18.8 million, or 26%. By segment, Indirect revenues increased 10% to $59.8 million, and Direct revenues increased 74% to $31.8 million, with comparable-store sales increasing 32.5%. For the quarter, gross profit rose 30% to $51.7 million, and gross margin improved from 54.8% to 56.4%.
During the quarter, the Company opened five new stores, bringing the total to 34 full-price stores and four outlet stores as of October 30, 2010. The Company opened one additional full-price store subsequent to the end of the third quarter, its final anticipated store opening of fiscal 2011.
The operating loss for the quarter was $0.2 million, compared to operating income of $13.2 million in the third quarter of fiscal 2010. On an adjusted basis, excluding stock-based compensation expense of $15.7 million related to restricted-stock awards that vested upon the completion of the Company's IPO, operating income increased 17% to $15.5 million.
On a GAAP basis, net income for the quarter was $6.0 million, compared to $12.8 million in the comparable prior-year period. GAAP earnings per diluted share totaled $0.17 for the quarter, compared to $0.36 for the same period of the prior year. Net income for the current quarter included the previously discussed restricted-stock expense and a tax benefit of $6.8 million related in part to the Company's conversion from an "S" Corporation to a "C" Corporation for tax purposes. On an adjusted basis, excluding the restricted-stock expense and including an adjustment for income taxes as if the Company had been a "C" Corporation at the beginning of each period described (at an assumed combined effective tax rate of 40%), net income for the quarter increased 15% to $9.0 million, from $7.8 million a year ago, and diluted earnings per share increased to $0.25 on 36.2 million weighted-average shares outstanding, from $0.22 on 35.4 million weighted-average shares outstanding in the comparable prior-year period.
Year-to-Date Results
For the thirty-nine weeks ended October 30, 2010, net revenues increased 26% to $256.7 million, from $203.8 million in the comparable prior-year period. By segment, Indirect revenues increased 13% to $161.3 million, and Direct revenues increased 55% to $95.4 million, with comparable-store sales increasing 28.2%.
Operating income for the thirty-nine weeks totaled $26.8 million, down 3% from $27.7 million a year ago. On an adjusted basis, excluding $15.8 million of stock-based compensation expense related to the restricted-stock awards and $6.1 million of compensation expense for bonuses paid to recipients of the restricted-stock awards to satisfy tax obligations, operating income increased 76% to $48.7 million.
On a GAAP basis, net income for the thirty-nine weeks rose 23% to $32.0 million, from $25.9 million a year ago. Net income for the thirty-nine weeks included the previously discussed restricted-stock and bonus expenses as well as the tax benefit recognized in the third quarter. On an adjusted basis, excluding the restricted-stock and bonus expenses and including an adjustment for income taxes as if the Company had been a "C" Corporation at the beginning of each period described (at an assumed combined effective tax rate of 40%), net income for the thirty-nine weeks increased 79% to $28.5 million, from $15.9 million in the comparable prior-year period, and diluted earnings per share increased to $0.80 on 35.7 million weighted-average shares outstanding, from $0.45 on 35.4 million weighted-average shares outstanding in the comparable prior-year period.
Call Information
A conference call to discuss third quarter results is scheduled for today, December 7, 2010, at 4:30 PM Eastern Time. A broadcast of the call will be available on the Company's website, www.verabradley.com. In addition, a replay of the call will be available shortly after the conclusion of the call and remain available until December 21, 2010. To access the telephone replay, listeners should dial (877) 870-5176. The access code for the replay is 7269477.
About Vera Bradley, Inc.
Friends Barbara Bradley Baekgaard and Patricia R. Miller founded Vera Bradley in 1982. Today, Vera Bradley is sold through 3,300 specialty stores as well as 39 Vera Bradley stores nationwide. Vera Bradley accessories, handbags, and travel and paper & gift items have recently been spotted on Desperate Housewives, Brothers and Sisters, Entourage, and Modern Family, and in over 20 feature-length films. Visit www.verabradley.com for a store near you or to learn more.
Forward-Looking Statements
Certain statements in this release are "forward-looking statements" made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the Company's current expectations or beliefs concerning future events and are subject to various risks and uncertainties that may cause actual results to differ materially from those that we expected, including: possible adverse changes in general economic conditions and their impact on consumer confidence and spending; possible inability to predict and respond in a timely manner to changes in consumer demand; possible loss of key management or design associates or inability to attract and retain the talent required for our business; possible inability to maintain and enhance our brand; possible inability to successfully implement our growth strategies or manage our growing business; possible inability to successfully open new stores as planned; and possible inability to sustain levels of comparable-store sales. For a discussion of these and other risks and uncertainties that could cause actual results to differ materially from those contained in our forward-looking statements, please refer to "Risk Factors" in our Registration Statement on Form S-1, as amended (File No. 333-167934), which became effective on October 20, 2010. We undertake no obligation to publicly update or revise any forward-looking statement. Financial schedules are attached to this release.
CONTACT: ICR, Inc. Investor Relations: Joseph Teklits Jean Fontana Jean.fontana@icrinc.com 203-682-8200 Vera Bradley, Inc. Public Relations: 877-708-VERA (8372) Mediacontact@verabradley.com