Vera Bradley Designs, Inc
Mar 8, 2017

Vera Bradley Announces Fourth Quarter and Fiscal Year 2017 Results

Fourth quarter net revenues totaled $134.8 million

Fourth quarter net income on a GAAP basis totaled $3.5 million, or $0.09 per diluted share; fourth quarter net income on a non-GAAP basis (excluding store impairment charges) totaled $10.1 million, or $0.28 per diluted share

Company ended the fiscal year with strong cash position (including short-term investments) of $116.5 million, no debt, and year-over-year inventories down 10.0%

FORT WAYNE, Ind., March 08, 2017 (GLOBE NEWSWIRE) -- Vera Bradley, Inc. (Nasdaq:VRA) ("Vera Bradley" or the "Company") today announced its financial results for the fourth quarter and fiscal year ended January 28, 2017 ("fiscal 2017").

Note that the Company has now excluded store impairment charges and certain additional severance charges in its previously reported non-GAAP income numbers.  

Comments on Fourth Quarter Performance

Robert Wallstrom, Chief Executive Officer, noted, "The retail environment became even more challenging in the fourth quarter.  Consequently, both total revenues and our gross profit percentage were modestly below our expectations.  However, we exceeded our fourth quarter EPS guidance, primarily due to diligent expense management and a lower-than-expected tax rate." 

Summary of Fourth Quarter Financial Performance

Net revenues totaled $134.8 million for the current year fourth quarter ended January 28, 2017, compared to $154.1 million in the prior year fourth quarter ended January 30, 2016.

For the current year fourth quarter, the Company posted net income of $3.5 million, or $0.09 per diluted share.  These results included $6.6 million of after-tax impairment charges related to underperforming stores.  On a non-GAAP basis, excluding these charges, the Company's net income totaled $10.1 million, or $0.28 per diluted share.

For the prior year fourth quarter, the Company recorded net income of $15.7 million, or $0.41 per diluted share.  These results included after-tax store impairment charges of $1.8 million.  On a non-GAAP basis, excluding these charges, the Company's net income totaled $17.5 million, or $0.46 per diluted share.

Summary of Fiscal 2017 Financial Performance

Net revenues totaled $485.9 million for fiscal 2017, compared to revenues of $502.6 million for the fiscal year ended January 30, 2016 ("fiscal 2016"). 

The Company posted net income of $19.8 million, or $0.53 per diluted share, in the current fiscal year.  These results included net after-tax adjustments of $7.0 million, comprised of:

On a non-GAAP basis, excluding these adjustments, the Company's current year net income totaled $26.8 million, or $0.72 per diluted share.

For the prior year, the Company posted net income of $27.6 million, or $0.71 per diluted share.  These results included net after-tax charges totaling $6.0 million, comprised of: 

On a non-GAAP basis, excluding these charges, the Company's net income totaled $33.5 million, or $0.86 per diluted share, for the prior year. 

Comments on Fiscal 2017 Accomplishments

Wallstrom also noted, "Even though fiscal 2017 was a challenging year, we made meaningful progress against key elements of our long-term strategic plan.  Specifically:

-- In product, we:

-- In  distribution, we:

-- Our marketing efforts drove customer engagement by:

Looking Ahead

Wallstrom added, "We have a strong brand, a talented team, and a solid financial foundation and are focused on ensuring Vera Bradley's prosperous future.  However, our transformation is taking longer than we had originally planned, and the overall retail environment and accessories space are significantly more challenging than anticipated. 

"As we enter fiscal 2018, our primary objective is to increase our customer count.  In order to do this, we must:

"We believe keenly focusing on these three goals will best position Vera Bradley for long-term revenue and income growth," Wallstrom concluded.  

Fourth Quarter Details

The non-GAAP current and prior year fourth quarter income statement numbers referenced below exclude previously outlined store impairment charges.

Current year fourth quarter net revenues of $134.8 million were modestly below the low end of the Company's guidance range of $135 million to $140 million.  Prior year fourth quarter revenues totaled $154.1 million.

Current year fourth quarter Direct segment revenues totaled $108.9 million, a 3.6% decrease from $112.9 million in the prior year fourth quarter.  Comparable sales (including e-commerce) decreased 9.5% for the quarter (reflecting an 11.2% decline in comparable store sales and a 6.5% decrease in e-commerce sales), which was partially offset by new store growth (the Company opened four full-line and six factory outlet stores during the past 12 months).  Fourth quarter comparable sales were negatively impacted by year-over-year declines in store and e-commerce traffic.

As expected, Indirect segment revenues decreased 36.9% to $26.0 million from $41.2 million in the prior year fourth quarter, reflecting a meaningful reduction in orders from specialty retailers as well as smaller orders from department stores and other key accounts.  

Gross profit for the quarter totaled $75.1 million, or 55.7% of net revenues, compared to $89.6 million, or 58.2% of net revenues, in the prior year fourth quarter.  The year-over-year 250 basis point gross profit percentage decline primarily related to increased promotional activity at the Company's factory outlet stores, which also caused the gross profit percentage to fall modestly below the low end of the guidance range of 55.9% to 56.2%.  

SG&A expense totaled $70.6 million, or 52.4% of net revenues, in the current year fourth quarter, compared to $64.9 million, or 42.1% of net revenues, in the prior year fourth quarter.  On a non-GAAP basis, excluding store impairment charges, SG&A expense totaled $60.2 million, or 44.6% of net revenues, in the current year fourth quarter, compared to $62.1 million, or 40.3% of net revenues, in the prior year fourth quarter.  SG&A dollars decreased over the prior year primarily due to a decline in incentive compensation related to Company performance as well as diligent expense management, partially offset by expenses related to new stores.  The SG&A expense rate was lower than the Company's guidance of 46.1% to 46.7% due to diligent expense management.         

Operating income totaled $4.7 million, or 3.5% of net revenues, in the current year fourth quarter, compared to $25.4 million, or 16.5% of net revenues, in the prior year fourth quarter.  By segment, Direct operating income was $15.2 million, or 13.9% of sales, compared to $30.3 million, or 26.8% of sales, in the prior year, and Indirect operating income was $9.4 million, or 36.3% of sales, compared to $16.7 million, or 40.5% of sales, in the prior year.  

On a non-GAAP basis, excluding store impairment charges, operating income totaled $15.2 million, or 11.2% of net revenues, in the current year fourth quarter, compared to $28.2 million, or 18.3% of net revenues, in the prior year fourth quarter.  Excluding store impairment charges by segment, Direct operating income was $25.7 million, or 23.6% of sales, compared to $33.0 million, or 29.2% of sales, in the prior year, and Indirect operating income was $9.4 million, or 36.3% of sales, compared to $16.7 million, or 40.5% of sales, in the prior year.

Fiscal Year 2017 Details

The non-GAAP current and prior year income statement numbers referenced below exclude the impairment charges and other call-out items previously outlined.

For the current fiscal year, net revenues totaled $485.9 million compared to $502.6 million in the prior year and slightly below the Company's guidance range of $486 million to $491 million.

Direct segment revenues for the current fiscal year totaled $355.2 million, a 1.1% increase from $351.3 million last year.  Comparable sales (including e-commerce) decreased 7.0% for the fiscal year (reflecting a 7.1% decline in comparable store sales and a 6.7% decrease in e-commerce sales), which was more than offset by new store growth (the Company opened four full-line and six factory outlet stores during the past 12 months).   Comparable sales were negatively impacted by year-over-year declines in store and e-commerce traffic.  E-commerce and full-line store sales were also negatively impacted by lower levels of promotional activity in the first half of the fiscal year.

Indirect segment revenues decreased 13.6% to $130.8 million from $151.3 million in the prior year, primarily reflecting a reduction in orders from specialty retailers.   

Gross profit for the fiscal year totaled $276.0 million, or 56.8% of net revenues, compared to $281.2 million, or 55.9% of net revenues, in the prior year.  On a non-GAAP basis, excluding the aforementioned charges, gross profit was $284.6 million, or 56.6% of net revenues, in the prior year.  The year-over-year 20 basis point gross profit percentage increase (excluding charges) primarily related to sourcing efficiencies, partially reduced by increased promotional activity in the Company's factory outlet stores.  Gross profit was in line with guidance of 56.8% to 56.9%. 

SG&A expense totaled $249.2 million, or 51.3% of net revenues, in the current fiscal year, compared to $236.8 million, or 47.1% of net revenues, in the prior year.  On a non-GAAP basis, excluding the aforementioned charges, SG&A expense totaled $235.5 million, or 48.5% of net revenues, in the current fiscal year, compared to $231.6 million, or 46.1% of net revenues, in the prior year.  SG&A dollars increased over the prior year primarily due to new store expenses, partially offset by a decline in incentive compensation due to Company performance.   The SG&A rate was lower than guidance of approximately 49.5% to 49.7% primarily due to diligent expense management. 

Operating income totaled $28.2 million, or 5.8% of net revenues, for the current fiscal year, compared to $46.7 million, or 9.3% of net revenues, last year.  By segment, Direct operating income was $62.6 million, or 17.6% of sales, compared to $74.1 million, or 21.1% of sales, in the prior year, and Indirect operating income was $51.0 million, or 39.0% of sales, compared to $60.4 million, or 39.9% of sales.  

On a non-GAAP basis, excluding the aforementioned charges, operating income totaled $41.9 million, or 8.6% of net revenues, for the current fiscal year, compared to $55.4 million, or 11.0% of net revenues, last year.  Excluding the aforementioned charges by segment, Direct operating income was $75.3 million, or 21.2% of sales (which excluded $12.7 million of the aforementioned charges), compared to $80.3 million, or 22.9% of sales (which excluded $6.2 million of the aforementioned charges), in the prior year, and Indirect operating income was $51.0 million, or 39.0% of sales, compared to $61.6 million, or 40.7% of sales (which excluded $1.1 million of the aforementioned charges).

Net capital spending for the fourth quarter and full fiscal year totaled $3.3 million and $20.8 million, respectively.  Capital spending for the fiscal year was generally in line with guidance of $20 million. 

During the fourth quarter, the Company repurchased approximately $1.2 million worth of its common stock (approximately 91,000 shares at an average price of $13.33).  These fourth quarter repurchases bring the total repurchased during the fiscal year to $24.5 million (approximately 1.6 million shares at an average repurchase price of $15.27).  

Cash and cash equivalents and short-term investments as of January 28, 2017 totaled $116.5 million compared to $97.7 million at January 30, 2016.  The Company had no debt outstanding at fiscal year end.  Year-end inventory was $102.3 million compared to $113.6 million at last fiscal year end and in line with guidance of $100 million to $110 million.    

First Quarter and Fiscal Year 2018 Outlook

The non-GAAP prior year numbers referenced below exclude the aforementioned store impairment charges and other previously disclosed call-out items.  Current year estimates do not include any impairment, store closing, or other charges.

For the first quarter of fiscal 2018, the Company expects:

For fiscal 2018 (which includes a 53rd week), the Company expectations are as follows: 

Disclosure Regarding Non-GAAP Measures

The Company's management does not, nor does it suggest that investors should, consider the supplemental non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). Further, the non-GAAP measures utilized by the Company may be unique to the Company, as they may be different from non-GAAP measures used by other companies.

The Company believes that the non-GAAP measures presented in this earnings release, including current and prior year fourth quarter and fiscal year selling, general, and administrative expenses; operating income; net income and diluted earnings per share and prior year gross profit, along with the associated percentages of net revenues, are helpful to investors because they allow for a more direct comparison of the Company's year-over-year performance and are consistent with management's evaluation of business performance.  Beginning in the fourth quarter of fiscal 2017, the Company has excluded the impact of store impairment charges in its calculation of non-GAAP measures. For comparability, the prior year fourth quarter and fiscal year supplemental schedules have been recast to exclude the impact of the store impairment charges.  The Company has also excluded the impact of a certain severance charge in the calculation of non-GAAP measures in the current fiscal year.  A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures can be found in the Company's supplemental schedules included in this earnings release.  A supplemental schedule for the current year second quarter and a recast of the current year third quarter have been provided to exclude the store impairment charges and a certain severance charge.

Call Information

A conference call to discuss fourth quarter and year end results is scheduled for today, Wednesday, March 8, 2017, at 9:30 a.m. Eastern Time.  A broadcast of the call will be available via Vera Bradley's Investor Relations section of its website, www.verabradley.com.  Alternatively, interested parties may dial into the call at (800) 263-8506, and enter the access code 6193691.  A replay will be available shortly after the conclusion of the call and remain available through March 22, 2017.  To access the recording, listeners should dial (844) 512-2921, and enter the access code 6193691.

About Vera Bradley, Inc.

Vera Bradley is a leading designer of women's handbags, luggage and travel items, fashion and home accessories, and unique gifts.  Founded in 1982 by friends Barbara Bradley Baekgaard and Patricia R. Miller, the brand's innovative designs, iconic patterns, and brilliant colors continue to inspire and connect women unlike any other brand in the global marketplace. 

Vera Bradley offers a unique, multi-channel sales model as well as a focus on service and a high level of customer engagement.  The Company sells its products through two reportable segments: Direct and Indirect.  The Direct business consists of sales of Vera Bradley products through the Company's full-line and factory outlet stores in the United States, verabradley.com, eBay, and its annual outlet sale in Fort Wayne, Indiana.  The Indirect business consists of sales of Vera Bradley products to approximately 2,600 specialty retail locations, substantially all of which are located in the United States, as well as select department stores, national accounts, third party e-commerce sites, its wholesale business in Japan, and third-party inventory liquidators.

The Company's commitment to bringing more beauty into women's lives includes its dedication to breast cancer research through the Vera Bradley Foundation for Breast Cancer. 

Website Information

We routinely post important information for investors on our website www.verabradley.com in the "Investor Relations" section. We intend to use this webpage as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investor Relations section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our webpage is not incorporated by reference into, and is not a part of, this document.

Vera Bradley Safe Harbor Statement

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 long-term strategic plan; possible inability to successfully open new stores and/or operate current stores as planned; adverse changes in the cost of raw materials and labor used to manufacture our products; possible adverse effects resulting from a significant disruption in our single distribution facility; and possible ramifications from the payment card incident disclosed in October 2016.  More information on potential factors that could affect the Company's financial results is included from time to time in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's public reports filed with the SEC, including the Company's Form 10-K for the fiscal year ended January 30, 2016.  We undertake no obligation to publicly update or revise any forward-looking statement.  Financial schedules are attached to this release.

Vera Bradley, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
    
 January 28,
2017
 January 30,
2016
Assets   
Current assets:   
Cash and cash equivalents$86,375  $97,681 
Short-term investments 30,152   - 
Accounts receivable, net 23,313   31,294 
Inventories 102,283   113,590 
Income taxes receivable 3,217   785 
Prepaid expenses and other current assets 10,237   10,292 
Total current assets 255,577   253,642 
    
Property, plant, and equipment, net 101,577   113,711 
Deferred income taxes 13,539   11,363 
Other assets 2,816   1,963 
Total assets$373,509  $380,679 
    
Liabilities and Shareholders' Equity   
Current liabilities:   
Accounts payable$32,619  $24,606 
Accrued employment costs 12,474   14,937 
Other accrued liabilities 16,906   16,924 
Income taxes payable 508   10,085 
Total current liabilities 62,507   66,552 
    
Long-term liabilities 27,216   28,872 
Total liabilities 89,723   95,424 
    
Shareholders' equity:   
Additional paid-in-capital 88,739   85,436 
Retained earnings 263,767   244,009 
Accumulated other comprehensive loss (50)  (43)
Treasury stock (68,670)  (44,147)
Total shareholders' equity 283,786   285,255 
Total liabilities and shareholders' equity$373,509  $380,679 


Vera Bradley, Inc.
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(unaudited)
        
 Thirteen Weeks Ended Fifty-Two Weeks Ended
 January 28,
2017
 January 30,
2016
 January 28,
2017
 January 30,
2016
        
Net revenues$134,849 $154,096 $485,937 $502,598
Cost of sales 59,760  64,453  209,891  221,409
Gross profit 75,089  89,643  276,046  281,189
Selling, general, and administrative expenses 70,643  64,860  249,155  236,836
Other income 212  635  1,329  2,369
Operating income 4,658  25,418  28,220  46,722
Interest expense, net 8  54  178  263
Income before income taxes 4,650  25,364  28,042  46,459
Income tax expense 1,199  9,653  8,284  18,901
Net income$3,451 $15,711 $19,758 $27,558
        
Basic weighted-average shares outstanding 36,217  37,924  36,838  38,795
Diluted weighted-average shares outstanding 36,359  38,053  36,970  38,861
        
Basic net income per share$0.10 $0.41 $0.54 $0.71
Diluted net income per share$0.09 $0.41 $0.53 $0.71


Vera Bradley, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
    
 Fifty-Two Weeks Ended
 January 28,
2017
 January 30,
2016
Cash flows from operating activities   
Net income$19,758  $27,558 
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation of property, plant, and equipment 19,516   19,418 
Impairment charges 12,706   2,755 
Provision for doubtful accounts 439   515 
Loss on disposal of property, plant, and equipment 14   141 
Stock-based compensation 4,032   5,027 
Deferred income taxes (2,176)  (3,340)
Gain on short-term investment (152)  - 
Changes in assets and liabilities:   
Accounts receivable 7,542   (435)
Inventories 11,307   (15,187)
Prepaid expenses and other assets (798)  (2,571)
Accounts payable 9,001   (8,665)
Income taxes (12,009)  12,508 
Accrued and other liabilities (3,994)  5,546 
Net cash provided by operating activities 65,186   43,270 
    
Cash flows from investing activities   
Purchases of property, plant, and equipment (20,778)  (26,322)
Purchase of short-term investment (30,000)  - 
Proceeds from disposal of property, plant, and equipment 8   - 
Net cash used in investing activities (50,770)  (26,322)
    
Cash flows from financing activities   
Tax withholdings for equity compensation (729)  (583)
Repurchase of common stock (24,959)  (30,870)
Other financing activities, net (27)  (78)
Net cash used in financing activities (25,715)  (31,531)
Effect of exchange rate changes on cash and cash equivalents (7)  (28)
    
Net decrease in cash and cash equivalents$(11,306) $(14,611)
Cash and cash equivalents, beginning of period 97,681   112,292 
Cash and cash equivalents, end of period$86,375  $97,681 
    
Supplemental disclosure of cash flow information   
Cash paid for income taxes, net$24,824  $9,302 
Cash paid for interest$248  $259 
Supplemental disclosure of non-cash activity   
Non-cash operating, investing, and financing activities   
Repurchase of common stock   
Expenditures incurred but not yet paid as of January 28, 2017 and January 30, 2016$-  $436 
Expenditures incurred but not yet paid as of January 30, 2016 and January 31, 2015$436  $116 
Purchases of property, plant, and equipment   
Expenditures incurred but not yet paid as of January 28, 2017 and January 30, 2016$2,204  $2,872 
Expenditures incurred but not yet paid as of January 30, 2016 and January 31, 2015$2,872  $2,172 


Vera Bradley, Inc.
First Quarter Fiscal 2017
GAAP to Non-GAAP Reconciliation Thirteen Weeks Ended April 30, 2016
(in thousands, except per share amounts)
(unaudited)
 Thirteen Weeks Ended 
 As Reported Other Items1 Non-GAAP
(Excluding Items)
 
Selling, general, and administrative expenses$56,376 $- $56,376 
Operating income 3,857  -  3,857 
Income before income taxes 3,809  -  3,809 
Income tax expense 1,391  -  1,391 
Net income 2,418  -  2,418 
Diluted net income per share$0.06 $- $0.06 
       
Direct segment operating income$12,137 $- $12,137 
       
1There were no Other Items identified during the first quarter of fiscal 2017 


Vera Bradley, Inc.
Second Quarter Fiscal 2017
GAAP to Non-GAAP Reconciliation Thirteen Weeks Ended July 30, 2016
(in thousands, except per share amounts)
(unaudited)
 Thirteen Weeks Ended 
 As Reported Other Items Non-GAAP
(Excluding Items)
 
Selling, general, and administrative expenses$60,305  $2,516 1$57,789  
Operating income (loss) 8,303   (2,516)  10,819  
Income (loss) before income taxes 8,240   (2,516)  10,756  
Income tax expense (benefit) 3,131   (924)2 4,055  
Net income (loss) 5,109   (1,592)  6,701  
Diluted net income (loss) per share$0.14  $(0.04) $0.18  
       
Direct segment operating income (loss)$18,149  $(1,578)3$19,727  
Unallocated corporate expenses$(21,854) $(938)4$(20,916) 
       
1Items include $1,578 for store impairment charges and $938 for a severance charge
 
2Related to the tax impact of the charges mentioned above
 
3Related to store impairment charges
 
4Related to a severance charge
 


Vera Bradley, Inc.
Third Quarter Fiscal 2017
GAAP to Non-GAAP Reconciliation Thirteen Weeks Ended October 29, 2016
(in thousands, except per share amounts)
(unaudited)
 Thirteen Weeks Ended 
 As Reported Other Items Non-GAAP
(Excluding Items)
 
Selling, general, and administrative expenses$61,831 $636 1$61,195 
Operating income (loss) 11,402  (636)  12,038 
Income (loss) before income taxes 11,343  (636)  11,979 
Income tax expense (benefit) 2,563  (1,860)2 4,423 
Net income 8,780  1,224   7,556 
Diluted net income per share$0.24 $0.03  $0.21 
       
Direct segment operating income (loss)$17,104 $(636)1$17,740 
       
1Items are for store impairment charges
 
2Includes $1,626 related to the release of certain income tax reserves and a benefit of $234 related to the tax impact of the charges mentioned above 


Vera Bradley, Inc.
Fourth Quarter Fiscal 2017
GAAP to Non-GAAP Reconciliation Thirteen Weeks Ended January 28, 2017
(in thousands, except per share amounts)
(unaudited)
 Thirteen Weeks Ended 
 As Reported Other Items1 Non-GAAP
(Excluding Items)
 
Selling, general, and administrative expenses$70,643 $10,492  $60,151 
Operating income (loss) 4,658  (10,492)  15,150 
Income (loss) before income taxes 4,650  (10,492)  15,142 
Income tax expense (benefit) 1,199  (3,855)  5,054 
Net income (loss) 3,451  (6,637)  10,088 
Diluted net income (loss) per share$0.09 $(0.18) $0.28 
       
Direct segment operating income (loss)$15,187 $(10,492) $25,679 
       
1Items are for store impairment charges
 


Vera Bradley, Inc.
Fourth Quarter Fiscal 2016
GAAP to Non-GAAP Reconciliation Thirteen Weeks Ended January 30, 2016
(in thousands, except per share amounts)
(unaudited)
 Thirteen Weeks Ended 
 As Reported Other Items1 Non-GAAP
(Excluding Items)
 
Selling, general, and administrative expenses$64,860 $2,755  $62,105 
Operating income (loss) 25,418  (2,755)  28,173 
Income (loss) before income taxes 25,364  (2,755)  28,119 
Income tax expense (benefit) 9,653  (1,009)  10,662 
Net income (loss) 15,711  (1,746)  17,457 
Diluted net income (loss) per share$0.41 $(0.05) $0.46 
       
Direct segment operating income (loss)$30,270 $(2,755) $33,025 
       
1Items are for store impairment charges
 


Vera Bradley, Inc.
Fiscal 2017
GAAP to Non-GAAP Reconciliation Fifty-Two Weeks Ended January 28, 2017
(in thousands, except per share amounts)
(unaudited)
 Fifty-Two Weeks Ended 
 As Reported Other Items Non-GAAP
(Excluding Items)
 
Selling, general, and administrative expenses$249,155  $13,644 1$235,511  
Operating income (loss) 28,220   (13,644)  41,864  
Income (loss) before income taxes 28,042   (13,644)  41,686  
Income tax expense (benefit) 8,284   (6,639)2 14,923  
Net (loss) income 19,758   (7,005)  26,763  
Diluted net income (loss) per share$0.53  $(0.19) $0.72  
       
Direct segment operating income (loss)$62,577  $(12,706)3$75,283  
Unallocated corporate expenses$(85,312) $(938)4$(84,374) 
       
1Includes $12,706 related to store impairment charges and $938 for a severance charge
 
2Includes $1,626 for the release of certain income tax reserves and a benefit of $5,013 related to the tax impact of the charges mentioned above 
3Related to store impairment charges
 
4Related to a severance charge
 

 

Vera Bradley, Inc.
Fiscal 2016
GAAP to Non-GAAP Reconciliation Fifty-Two Weeks Ended January 30, 2016
(in thousands, except per share amounts)
(unaudited)
 Fifty-Two Weeks Ended 
 As Reported Restructuring Items
& Other Items
 Non-GAAP
(Excluding Items)
 
Gross profit (loss)$281,189  $(3,434)1$284,623  
Selling, general, and administrative expenses 236,836   5,238 2 231,598  
Operating income (loss) 46,722   (8,672)  55,394  
Income (loss) before income taxes 46,459   (8,672)  55,131  
Income tax expense (benefit) 18,901   (2,707)3 21,608  
Net income (loss) 27,558   (5,965)  33,523  
Diluted net income (loss) per share$0.71  $(0.15) $0.86  
       
Direct segment operating income (loss)$74,114  $(6,225)4$80,339  
Indirect segment operating income (loss)$60,409  $(1,146)5$61,555  
Unallocated corporate expenses$(87,801) $(1,301)6$(86,500) 
       
1Items include one-time exit costs related to the Company's manufacturing facility closure, including employee severance, a lease termination payment and fixed asset acceleration charges
2Includes $1,301 for a severance charge, $1,182 related to a lease termination and $2,755 related to store impairment charges   
3Includes $575 related to an additional income tax reserve and a benefit of $3,282 related to the tax impact of the charges mentioned above 
4Includes an allocation of $2,288 related to the one-time exit costs for the Company's manufacturing facility closure, $1,182 related to a lease termination and $2,755 related to store impairment charges
5Related to an allocation of $1,146 for the one-time exit costs for the Company's manufacturing facility closure   
6Related to a severance charge      


CONTACTS:
Investors:
Julia Bentley, VP of Investor Relations and Communications
jbentley@verabradley.com 
(260) 207-5116

Media:    
877-708-VERA (8372)