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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 ___________________________ 
FORM 10-Q
___________________________ 
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended October 29, 2022
OR
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From                      to                     
Commission File Number: 001-34918
 
___________________________ 
https://cdn.kscope.io/ef23dace55d9447ca63dbca3e3995b11-vra-20221029_g1.jpg
VERA BRADLEY, INC.
(Exact name of registrant as specified in its charter)
 ___________________________ 
 
Indiana 27-2935063
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
12420 Stonebridge Road,
Roanoke, Indiana
 46783
(Address of principal executive offices) (Zip Code)
(877) 708-8372
(Registrant’s telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed since last report)
 ___________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of each exchange on which registered
Common Stock, without par valueVRANASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer ¨  Accelerated filer x
Non-accelerated filer 
¨  (Do not check if a smaller reporting company)
  Smaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  x
The registrant had 30,875,844 shares of its common stock outstanding as of November 30, 2022.



Table of Contents
TABLE OF CONTENTS
 
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 6.

2

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FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical or current fact included in this report are forward-looking statements. Forward-looking statements include references to our current expectations and projections relating to our financial condition, results of operations, plans, objectives, strategies, future performance, and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “might,” “will,” “should,” “can have,” and “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. For example, all statements we make relating to our estimated and projected earnings, revenues, costs, expenditures, cash flows, growth rates, and financial results, our plans and objectives for future operations, growth, initiatives, or strategies, or the expected outcome or impact of pending or threatened litigation are forward-looking statements. All forward-looking statements are subject to 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 consumer spending, including political unrest, social unrest, acts of war and terrorism, inflation, impacts related to variants of the novel coronavirus (COVID-19) outbreak, and other related matters;
public health pandemics, including the continued outbreak of COVID-19 and actions to contain the spread of the virus by governmental or other actors;
possible inability to successfully implement our long-term strategic plans;
possible declines in our comparable sales;
possible inability to maintain and enhance our brands;
possible failure of our multi-channel distribution model;
possible inability to predict and respond in a timely manner to changes in consumer demand;
possible inability to successfully open new stores and/or operate current stores as planned;
possible loss of key management associates or inability to attract and retain the talent required for our business;
possible data security or privacy breaches or disruptions in our computer systems or website;
possible disruptions in our supply chain;
possible new or increased tariffs on our products that could lead to increased product costs and lower profit margins; and
possible inability to successfully implement integration strategies related to the Pura Vida business and possible inability to derive expected benefits from or to successfully integrate any future business acquisition.
We derive many of our forward-looking statements from our operating plans and forecasts, which are based upon detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results.
For a discussion of the above described risks and uncertainties 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 Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 29, 2022, as well as in Item 1A herein.
We caution you that the risks and uncertainties identified by us may not be all of the factors that are important to you. Furthermore, the forward-looking statements included in this report are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.

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PART I. FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

Vera Bradley, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
October 29,
2022
January 29,
2022
Assets
Current assets:
Cash and cash equivalents$25,237 $88,436 
Accounts receivable, net25,115 20,681 
Inventories178,334 144,881 
Income taxes receivable4,120 9,391 
Prepaid expenses and other current assets14,817 15,928 
Total current assets247,623 279,317 
Operating right-of-use assets82,683 79,873 
Property, plant, and equipment, net60,388 59,941 
Intangible assets, net32,001 44,223 
Goodwill24,833 44,254 
Deferred income taxes9,381 3,857 
Other assets4,428 6,081 
Total assets$461,337 $517,546 
Liabilities, Redeemable Noncontrolling Interest, and Shareholders’ Equity
Current liabilities:
Accounts payable$31,125 $30,492 
Accrued employment costs12,252 12,463 
Short-term operating lease liabilities19,742 18,699 
Other accrued liabilities14,771 16,422 
Income taxes payable501  
Total current liabilities78,391 78,076 
Long-term operating lease liabilities80,109 80,861 
Other long-term liabilities85 195 
Total liabilities158,585 159,132 
Commitments and contingencies
Redeemable noncontrolling interest23,153 30,974 
Shareholders’ equity:
Preferred stock; 5,000 shares authorized, no shares issued or outstanding
  
Common stock, without par value; 200,000 shares authorized, 42,846 and 42,429 shares issued and 30,953 and 33,170 shares outstanding, respectively
  
Additional paid-in-capital109,070 107,907 
Retained earnings302,790 334,364 
Accumulated other comprehensive loss(181)(29)
Treasury stock(132,080)(114,802)
Total shareholders’ equity of Vera Bradley, Inc.279,599 327,440 
Total liabilities, redeemable noncontrolling interest, and shareholders’ equity$461,337 $517,546 

The accompanying notes are an integral part of these financial statements.
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Vera Bradley, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
 
 Thirteen Weeks EndedThirty-Nine Weeks Ended
 October 29,
2022
October 30,
2021
October 29,
2022
October 30,
2021
Net revenues$124,040 $134,735 $352,870 $390,877 
Cost of sales58,164 62,457 173,963 179,074 
Gross profit65,876 72,278 178,907 211,803 
Selling, general, and administrative expenses60,059 64,458 195,015 194,083 
Impairment of goodwill and intangible assets  29,338  
Other income, net141 132 350 921 
Operating income (loss)5,958 7,952 (45,096)18,641 
Interest expense, net39 13 115 222 
Income (loss) before income taxes5,919 7,939 (45,211)18,419 
Income tax expense (benefit)1,090 1,713 (6,429)3,854 
Net income (loss)4,829 6,226 (38,782)14,565 
Less: Net (loss) income attributable to redeemable noncontrolling interest(338)448 (7,208)1,882 
Net income (loss) attributable to Vera Bradley, Inc.$5,167 $5,778 $(31,574)$12,683 
Basic weighted-average shares outstanding31,061 33,964 31,721 33,852 
Diluted weighted-average shares outstanding31,229 34,472 31,721 34,492 
Basic net income (loss) per share available to Vera Bradley, Inc. common shareholders$0.17 $0.17 $(1.00)$0.37 
Diluted net income (loss) per share available to Vera Bradley, Inc. common shareholders$0.17 $0.17 $(1.00)$0.37 
The accompanying notes are an integral part of these financial statements.
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Vera Bradley, Inc.
Condensed Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
 
 Thirteen Weeks EndedThirty-Nine Weeks Ended
 October 29,
2022
October 30,
2021
October 29,
2022
October 30,
2021
Net income (loss)$4,829 $6,226 $(38,782)$14,565 
Unrealized loss on available-for-sale debt investments (1) (4)
Cumulative translation adjustment(46)(5)(152)(14)
Comprehensive income (loss), net of tax4,783 6,220 (38,934)14,547 
Less: Comprehensive (loss) income attributable to redeemable noncontrolling interest(338)448 (7,208)1,882 
Comprehensive income (loss) attributable to Vera Bradley, Inc.$5,121 $5,772 $(31,726)$12,665 
The accompanying notes are an integral part of these financial statements.
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Vera Bradley, Inc.
Condensed Consolidated Statements of Shareholders’ Equity
(in thousands, except share data)
(unaudited)
 Number of Shares 
 Common
Stock
Treasury
Stock
Additional
Paid-in
Capital
Retained EarningsAccumulated
Other
Comprehensive Loss
Treasury
Stock
Total Shareholders’
Equity of Vera Bradley, Inc.
Balance at January 29, 202233,170,430 9,258,741 $107,907 $334,364 $(29)$(114,802)$327,440 
Net loss attributable to Vera Bradley, Inc.— — — (6,974)— — (6,974)
Translation adjustments— — — — (31)— (31)
Restricted shares vested, net of repurchase for taxes404,469 — (1,410)— — — (1,410)
Stock-based compensation— — 543 — — — 543 
Treasury stock purchased(1,423,096)1,423,096    (10,454)(10,454)
Balance at April 30, 202232,151,803 10,681,837 $107,040 $327,390 $(60)$(125,256)$309,114 
Net loss attributable to Vera Bradley, Inc.— — — (29,767)— — (29,767)
Translation adjustments— — — — (75)— (75)
Restricted shares vested, net of repurchase for taxes89 — — — — — — 
Stock-based compensation— — 901 — — — 901 
Treasury stock purchased(986,023)986,023 — — — (6,023)(6,023)
Balance at July 30, 202231,165,869 11,667,860 $107,941 $297,623 $(135)$(131,279)$274,150 
Net income attributable to Vera Bradley, Inc.— — — 5,167 — $— 5,167 
Translation adjustments— — — — (46)$— (46)
Restricted shares vested, net of repurchase for taxes11,985 — (20)— — $— (20)
Stock-based compensation— — 1,149 — — $— 1,149 
Treasury stock purchased(225,010)225,010 — — — $(801)(801)
Balance at October 29, 202230,952,844 11,892,870 $109,070 $302,790 $(181)$(132,080)$279,599 






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Vera Bradley, Inc.
Condensed Consolidated Statements of Shareholders’ Equity
(in thousands, except share data)
(continued)
(unaudited)
Number of Shares
Common
Stock
Treasury
Stock
Additional
Paid-in
Capital
Retained EarningsAccumulated
Other
Comprehensive Income (Loss)
Treasury
Stock
Total Shareholders’
Equity of Vera Bradley, Inc.
Balance at January 30, 202133,414,490 8,393,207 $105,433 $316,526 $8 $(107,060)$314,907 
Net loss attributable to Vera Bradley, Inc.— — — (2,145)— — (2,145)
Translation adjustments— — — — (6)— (6)
Unrealized loss on available-for-sale debt investments— — — — (2)— (2)
Restricted shares vested, net of repurchase for taxes570,562 — (2,171)— — — (2,171)
Stock-based compensation— — 1,814 — — — 1,814 
Balance at May 1, 202133,985,052 8,393,207 $105,076 $314,381 $ $(107,060)$312,397 
Net income attributable to Vera Bradley, Inc.  — 9,050 — — 9,050 
Translation adjustments  — — (3)— (3)
Unrealized loss on available-for-sale debt investments  — — (1)— (1)
Restricted shares vested, net of repurchase for taxes36,278  (179)— — — (179)
Stock-based compensation— — 1,558 — — — 1,558 
Balance at July 31, 202134,021,330 8,393,207 $106,455 $323,431 $(4)$(107,060)$322,822 
Net income attributable to Vera Bradley, Inc.— — — $5,778 — — 5,778 
Translation adjustments— — — — (5)— (5)
Unrealized loss on available-for-sale debt investments— — — — (1)— (1)
Restricted shares vested, net of repurchase for taxes14,634 — (75)— — — (75)
Stock-based compensation— — 1,047 — — — 1,047 
Treasury stock purchased(214,030)214,030 — — — (2,118)(2,118)
Balance at October 30, 202133,821,934 8,607,237 $107,427 $329,209 $(10)$(109,178)$327,448 
The accompanying notes are an integral part of these financial statements.
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Vera Bradley, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
 Thirty-Nine Weeks Ended
 October 29,
2022
October 30,
2021
Cash flows from operating activities
Net (loss) income$(38,782)$14,565 
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation of property, plant, and equipment6,685 6,769 
Amortization of operating right-of-use assets16,151 15,028 
Goodwill and intangible asset impairment29,338  
Other impairment charges1,351  
Amortization of intangible assets2,305 2,305 
Provision for doubtful accounts(80)108 
Stock-based compensation2,593 4,419 
Deferred income taxes(5,524)80 
Other non-cash gain, net (45)
Changes in assets and liabilities:
Accounts receivable(4,354)(2,558)
Inventories(33,453)(6,849)
Prepaid expenses and other assets2,764 3,463 
Accounts payable49 4,798 
Income taxes 5,772 (1,945)
Operating lease liabilities, net(19,262)(19,273)
Accrued and other liabilities(2,311)(1,654)
Net cash (used in) provided by operating activities(36,758)19,211 
Cash flows from investing activities
Purchases of property, plant, and equipment(6,968)(4,033)
Proceeds from maturities and sales of investments 815 
Proceeds from disposal of property, plant, and equipment 45 
Net cash used in investing activities(6,968)(3,173)
Cash flows from financing activities
Tax withholdings for equity compensation(1,430)(2,425)
Repurchase of common stock(17,278)(2,000)
Distributions to redeemable noncontrolling interest(613)(990)
Net cash used in financing activities(19,321)(5,415)
Effect of exchange rate changes on cash and cash equivalents(152)(14)
Net (decrease) increase in cash and cash equivalents(63,199)10,609 
Cash and cash equivalents, beginning of period88,436 64,175 
Cash and cash equivalents, end of period$25,237 $74,784 












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Vera Bradley, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(continued)
(unaudited)
 Thirty-Nine Weeks Ended
 October 29,
2022
October 30,
2021
Supplemental disclosure of cash flow information
Cash (received) paid for income taxes, net$(6,637)$5,724 
Supplemental disclosure of non-cash activity
Non-cash operating, investing, and financing activities
Repurchase of common stock
Expenditures incurred but not yet paid as of October 29, 2022 and October 30, 2021$ $118 
Expenditures incurred but not yet paid as of January 29, 2022 and January 30, 2021$ $ 
Purchases of property, plant, and equipment
Expenditures incurred but not yet paid as of October 29, 2022 and October 30, 2021$1,174 $919 
Expenditures incurred but not yet paid as of January 29, 2022 and January 30, 2021$250 $343 
Refer to Note 3 herein for supplemental cash flow information regarding the Company’s leases.
The accompanying notes are an integral part of these financial statements.
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Vera Bradley, Inc.
Notes to the Condensed Consolidated Financial Statements
(unaudited)

1.Description of the Company and Basis of Presentation
The term “Company” refers to Vera Bradley, Inc. and its wholly and majority owned subsidiaries, except where the context requires otherwise or where otherwise indicated.
Vera Bradley, Inc. operates two unique lifestyle brands – Vera Bradley and Pura Vida. We believe Vera Bradley and Pura Vida are complementary businesses, both with devoted, emotionally-connected, and multi-generational female customer bases; alignment as causal, comfortable, affordable, and fun brands; positioning as “gifting” and socially-connected brands; strong, entrepreneurial cultures; a keen focus on community, charity, and social consciousness; multi-channel distribution strategies; and talented leadership teams aligned and committed to the long-term success of their brands.
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.
In July 2019, Vera Bradley, Inc. acquired a 75% interest in Creative Genius, Inc., which also operates under the name Pura Vida Bracelets (“Pura Vida”). Pura Vida, based in La Jolla, California, is a digitally native lifestyle brand that we believe deeply resonates with its loyal consumer following. The Pura Vida brand has a differentiated and expanding offering of bracelets, jewelry, and other lifestyle accessories.
The Company has three reportable segments: Vera Bradley Direct (“VB Direct”), Vera Bradley Indirect (“VB Indirect”), and Pura Vida.
The VB Direct business consists of sales of Vera Bradley products through Vera Bradley full-line and factory outlet stores in the United States; verabradley.com and verabradley.ca; the Vera Bradley online outlet site; and typically the Vera Bradley annual outlet sale in Fort Wayne, Indiana. As of October 29, 2022, the Company operated 60 full-line stores and 80 factory outlet stores. In light of the COVID-19 pandemic, the Company cancelled its calendar year 2022 and 2021 annual outlet sales.
The VB Indirect business consists of sales of Vera Bradley products to approximately 1,700 specialty retail locations, substantially all of which are located in the United States, as well as department stores, national accounts, third-party e-commerce sites, third-party inventory liquidators, and royalties recognized through licensing agreements related to the Vera Bradley brand.
The Pura Vida segment represents revenues generated through the Pura Vida websites, www.puravidabracelets.com, www.puravidabracelets.eu, and www.puravidabracelets.ca, the distribution of Pura Vida-branded products to wholesale retailers, substantially all of which are located in the United States, as well as through its five retail stores.
The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as permitted by such rules and regulations. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2022, filed with the SEC.
The interim financial statements reflect all adjustments that are, in the opinion of management, necessary to present fairly the results for the interim periods presented. All such adjustments are of a normal, recurring nature. The results of operations for the thirteen and thirty-nine weeks ended October 29, 2022, are not necessarily indicative of the results to be expected for the full fiscal year due to, in part, the uncertainty of macroeconomic factors on future periods, including inflation and supply chain challenges, among other related matters.




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Vera Bradley, Inc.
Notes to the Condensed Consolidated Financial Statements
(unaudited)
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and its majority owned subsidiary, Pura Vida. The Company has eliminated intercompany balances and transactions in consolidation.
Fiscal Periods
The Company’s fiscal year ends on the Saturday closest to January 31. References to the fiscal quarters ended October 29, 2022 and October 30, 2021 refer to the thirteen week periods ended on those dates.
Recently Issued Accounting Pronouncements
There were no new accounting pronouncements issued or which became effective during the thirteen and thirty-nine weeks ended October 29, 2022, which had, or are expected to have, a significant impact on the Company's Consolidated Financial Statements.

2.Revenue from Contracts with Customers

Disaggregation of Revenue
The following presents the Company's net revenues disaggregated by product category for the thirteen and thirty-nine weeks ended October 29, 2022 and October 30, 2021 (in thousands):
Thirteen Weeks Ended
October 29, 2022
VB Direct SegmentVB Indirect SegmentPura Vida SegmentTotal
Product categories
Bags$34,492 $11,561 $231 $46,284 
Travel17,744 4,106  21,850 
Accessories14,901 3,554 19,498 37,953 
Home8,197 1,258  9,455 
Apparel/Footwear(6)
2,932 888 1,267 5,087 
Other1,795 (1)947 (2)669 (3)3,411 
Total net revenues$80,061 (4)$22,314 (5)$21,665 (4)$124,040 
(1) Primarily includes net revenues from stationery, freight, and gift card breakage.
(2) Primarily includes net revenues from licensing agreements and freight.
(3) Related to freight.
(4) Net revenues were related to product sales recognized at a point in time.
(5) $21.7 million of net revenues related to product sales recognized at a point in time and $0.6 million of net revenues related to sales-based royalties recognized over time.
(6) Includes mask sales.
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Vera Bradley, Inc.
Notes to the Condensed Consolidated Financial Statements
(unaudited)
Thirteen Weeks Ended
October 30, 2021
VB Direct SegmentVB Indirect SegmentPura Vida SegmentTotal
Product categories
Bags$36,466 $9,892 $261 $46,619 
Travel17,856 3,683  21,539 
Accessories16,513 3,243 25,193 44,949 
Home9,222 1,957  11,179 
Apparel/Footwear(6)
4,583 1,115 1,006 6,704 
Other2,006 (1)1,023 (2)716 (3)3,745 
Total net revenues$86,646 (4)$20,913 (5)$27,176 (4)$134,735 
(1) Primarily includes net revenues from stationery, freight, and gift card breakage.
(2) Primarily includes net revenues from licensing agreements and freight.
(3) Related to freight.
(4) Net revenues were related to product sales recognized at a point in time.
(5) $20.2 million of net revenues related to product sales recognized at a point in time and $0.7 million of net revenues related to sales-based royalties recognized over time.
(6) Includes mask sales.
Thirty-Nine Weeks Ended
October 29, 2022
VB Direct SegmentVB Indirect SegmentPura Vida SegmentTotal
Product categories
Bags$98,997 $30,615 $1,073 $130,685 
Travel52,903 10,212  63,115 
Accessories42,157 7,958 61,627 111,742 
Home22,645 3,116  25,761 
Apparel/Footwear(6)
6,996 1,748 3,062 11,806 
Other5,012 (1)2,967 (2)1,782 (3)9,761 
Total net revenues$228,710 (4)$56,616 (5)$67,544 (4)$352,870 
(1) Primarily includes net revenues from stationery, freight, and gift card breakage.
(2) Primarily includes net revenues from licensing agreements and freight.
(3) Related to freight.
(4) Net revenues were related to product sales recognized at a point in time.
(5) $54.5 million of net revenues related to product sales recognized at a point in time and $2.1 million of net revenues related to sales-based royalties recognized over time.
(6) Includes mask sales.
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Vera Bradley, Inc.
Notes to the Condensed Consolidated Financial Statements
(unaudited)
Thirty-Nine Weeks Ended
October 30, 2021
VB Direct SegmentVB Indirect SegmentPura Vida SegmentTotal
Product categories
Bags$104,154 $26,825 $835 $131,814 
Travel56,872 9,575  66,447 
Accessories46,672 8,067 81,152 135,891 
Home25,108 3,412  28,520 
Apparel/Footwear(6)
12,438 1,966 2,790 17,194 
Other5,272 (1)3,164 (2)2,575 (3)11,011 
Total net revenues$250,516 (4)$53,009 (5)$87,352 (4)$390,877 
(1) Primarily includes net revenues from stationery, freight, and gift card breakage.
(2) Primarily includes net revenues from licensing agreements and freight.
(3) Related to freight.
(4) Net revenues were related to product sales recognized at a point in time.
(5) $50.6 million of net revenues related to product sales recognized at a point in time and $2.4 million of net revenues related to sales-based royalties recognized over time.
(6) Includes mask sales.

Contract Balances
Contract liabilities as of October 29, 2022 and January 29, 2022, were $2.7 million and $3.9 million, respectively. The balance as of October 29, 2022 and January 29, 2022 consisted of unredeemed gift cards, unearned revenue related to the monthly bracelet and jewelry clubs of the Pura Vida segment, Pura Vida loyalty club points, and Pura Vida customer deposits and payments collected before shipment. These contract liabilities are recognized within other accrued liabilities on the Company’s Condensed Consolidated Balance Sheets. Substantially all contract liabilities are recognized within one year. The Company did not have contract assets as of October 29, 2022 and January 29, 2022.
The balance for accounts receivable from contracts with customers, net of allowances, as of October 29, 2022 and January 29, 2022, was $24.0 million and $18.1 million, respectively, which is recognized within accounts receivable, net, on the Company’s Condensed Consolidated Balance Sheets. The provision for doubtful accounts was $1.1 million and $1.2 million as of October 29, 2022 and January 29, 2022, respectively. The provision for doubtful accounts is based upon the likelihood of default expected during the life of the receivable.
    
Performance Obligations
The performance obligations for the VB Direct, VB Indirect, and Pura Vida segments include the promise to transfer distinct goods (or a bundle of distinct goods). The VB Indirect segment also includes the right to access intellectual property (“IP”) related to the Vera Bradley brand.
Remaining Performance Obligations
The Company does not have remaining performance obligations in excess of one year or contracts that it does not have the right to invoice as of October 29, 2022.

3.Leases
Discount Rate
The weighted-average discount rate as of October 29, 2022, and October 30, 2021 was 4.6% and 4.7%, respectively. The discount rate is not readily determinable in the lease; therefore, the Company estimated the incremental borrowing
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Vera Bradley, Inc.
Notes to the Condensed Consolidated Financial Statements
(unaudited)
rate, at the commencement date of each lease, which is the rate of interest it would have to borrow on a collateralized basis over a similar term with similar payments.

Leases Not Yet Commenced
As of October 29, 2022, the Company had a total of three Vera Bradley retail store leases which were executed, but it did not have control of the underlying assets; therefore, the lease liability and right-of-use asset are not recorded on the Condensed Consolidated Balance Sheet. These leases contain undiscounted lease payments, which will be included in the determination of the lease liability, totaling approximately $6.7 million and have terms of up to 10 years commencing in fiscal year 2024.

Amounts Recognized in the Condensed Consolidated Financial Statements
The following lease expense is recorded within cost of sales for the Asia sourcing office and certain equipment leases and within selling, general, and administrative expenses for all other leases, including retail store leases, in the Company's Condensed Consolidated Statement of Operations for the thirteen and thirty-nine weeks ended October 29, 2022 and October 30, 2021 (in thousands):
Thirteen Weeks EndedThirty-Nine Weeks Ended
October 29, 2022October 30, 2021October 29, 2022October 30, 2021
Operating lease cost$6,357 $6,524 $18,721 $18,697 
Variable lease cost1,408 1,987 4,390 5,521 
Short-term lease cost43 121 359 363 
Less: Sublease income (1)
(105) (129) 
Total net lease cost$7,703 $8,632 $23,341 $24,581 
(1) Related to the sublease of a former Company location.

The weighted-average remaining lease term as of October 29, 2022 and October 30, 2021 was 5.4 years and 5.3 years, respectively.

Supplemental operating cash flow information was as follows (in thousands):
Thirty-Nine Weeks Ended
October 29, 2022October 30, 2021
Cash paid for amounts included in the measurement of operating lease liabilities (1)
$19,883 $23,482 
Right-of-use assets increase as a result of new and modified operating lease liabilities, net$19,666 $