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Why Vera Bradley Stock Popped Today

By Timothy Green - Jun 5, 2019 at 4:11PM

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Most of the gains were gone by the end of the day, but investors were clearly excited about the company's solid revenue growth.

What happened

Shares of Vera Bradley (VRA 3.28%) jumped on Wednesday following a mostly positive first-quarter report. The handbag and accessories company grew revenue a bit faster than expected, and its bottom line was in line with analyst estimates. Vera Bradley's revenue guidance also came in ahead of expectations, pushing the stock up as much as 10.8% earlier in the day. By 3:25 p.m. EDT, shares had settled to a 3.1% gain.

So what

Vera Bradley reported first-quarter revenue of $91.0 million, up 5.1% year over year and about $3 million above the average analyst estimate. Comparable sales were up 5.2%, comprised of a 4% increase in comparable-store sales and a 9.2% increase in e-commerce sales.

A Vera Bradley bag.

Image source: Vera Bradley.

Revenue in the direct segment was $71.1 million, up 8.6% year over year. The indirect segment generated $19.9 million of revenue, down 5.7%, with the decline due to fewer orders and fewer specialty accounts.

Earnings per share came in at a loss of $0.07, worse than a loss of $0.04 in the prior-year period and in line with analyst expectations. Vera Bradley's gross margin took a 0.6 percentage point hit in the quarter, with improvements in full-price selling and operational efficiencies unable to overcome the impact of tariffs on Chinese goods.

"We are pleased with our 5.2% first-quarter comparable sales increase and that revenues were once again at the high end of our guidance, indicating that our customers are responding to both our innovative product and targeted consumer engagement efforts," said CEO Robert Wallstrom.

Now what

For the second quarter, Vera Bradley expects to produce revenue between $115 million and $120 million, along with earnings per share between $0.25 and $0.28. Analysts were expecting revenue guidance of $114 million and EPS guidance of $0.29.

For the full year, the company expects revenue between $425 million and $440 million, and EPS between $0.67 and $0.74. Analysts expected revenue guidance of $427 million.

Chinese tariffs will continue to weigh on Vera Bradley's bottom line, but the company's solid revenue growth in the first quarter gave investors something to cheer about.

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Vera Bradley, Inc. Stock Quote
Vera Bradley, Inc.
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