What: Luxury handbag and accessory designer Vera Bradley's (NASDAQ:VRA) stock sank 15% lower during the month of June, according to S&P Capital IQ data. The drop added to an already rough year; shares are down 49% in the last 52 weeks.

VRA Chart

VRA data by YCharts

So what: Management's long-term goal is to build a $1 billion, highly profitable clothing accessory company. But that ideal seems far off in light of Vera Bradley's latest business results. In early June it posted a 22% sales plunge at its existing stores. Overall revenue figures weren't as bad, down only 10% thanks to an additional 14 shops and 18 factory outlet locations in the retail footprint. 

Vra

Source: Vera Bradley.

Still, the biggest problem is that the company's current product line isn't resonating with shoppers. "We are not attracting enough new customers to the brand, and traffic and sales are still very changing," said Robert Wallstrom in a press release. Those challenges held operating margin to just 1.8% of sales, far from management's aim of eventually hitting a margin in the high teens.

On the plus side, Vera Bradley isn't currently in financial trouble. The company carries no debt but boasts $96 million of cash on the books. Inventories of $101 million seem manageable, and are in fact down 20% year-over year. Gross margin actually ticked higher in the first quarter, rising to 54.5% of sales from 53.3% last year as Vera Bradley held the line on pricing.

Now what: Management expects more gross profitability improvements in the coming quarters. Wallstrom and his executive team are targeting a gross margin rate as high as 56% of sales, up from 53% for the prior fiscal year. 

Sales aren't expected to recover in that time, though. Vera Bradley is bracing for revenue of $490 million, down from $510 million last year. That makes it anyone's guess when Vera Bradley will start its march back toward management's aggressive strategic goals. "Until we begin to see recovery in the business, we cannot predict the timing of or provide additional updates on achieving those long-term financial targets," Wallstrom warned.

Demitrios Kalogeropoulos owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.