LONDON, UK / ACCESSWIRE / September 21, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Vera Bradley, Inc. (NASDAQ: VRA) ("Vera"), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=VRA, following the Company's release of its second quarter fiscal 2018 financial results on August 30, 2017. The handbag and accessories Company's revenue and earnings declined on a y-o-y basis, while it provided guidance for the upcoming quarter and fiscal year. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Earnings Reviewed

For the fiscal second quarter ended July 29, 2017, Vera's net revenues were $112.4 million compared to revenue of $119.2 million in Q2 FY17. The Company's revenues numbers were in-line with its own guidance range of $111 million to $115 million and also came in ahead of analysts' estimates of $112.0 million.

For Q2 FY18, Vera's gross profit totaled $63.3 million, or 56.3% of net revenues, compared to $68.4 million, or 57.4% of net revenues, in Q2 FY17. The 110 basis point gross profit decline was attributed to increased promotional activity at the Company's factory outlet stores, a reserve taken against slow-moving inventory, and channel mix changes.

During Q2 FY18, Vera's selling, general, and administrative expense (SG&A) totaled $59.7 million, or 53.1% of net revenues, compared to $60.3 million, or 50.6% of net revenues, in Q2 FY17. On a non-GAAP basis, the Company's SG&A expense totaled $55.9 million, or 49.7% of net revenues, in the reported quarter compared to $57.8 million, or 48.5% of net revenues in the prior year's same quarter. SG&A expense rate was meaningfully lower than Vera's guidance of 53.0% to 53.5% due to diligent expense management and cost reductions as well as the timing of approximately $500,000 of marketing expenses that are expected to be incurred in the remaining two quarters.

For Q2 FY18, Vera's operating income totaled $3.7 million, or 3.3% of net revenues, compared to $8.3 million, or 7.0% of net revenues, in Q2 FY17. On a non-GAAP basis, the Company's operating income totaled $7.5 million, or 6.7% of net revenues, in the reported quarter compared to $10.8 million, or 9.1% of net revenues, in the prior year's same quarter.

Vera posted net income of $2.2 million, or $0.06 per diluted share, for Q2 FY18 compared to net income of net income of $5.1 million, or $0.14 per diluted share, for Q2 FY17. The Company's reported quarter results included $2.4 million of after-tax charges comprised of strategic plan consulting fees of $1.5 million, severance charges of $0.7 million, and net lease termination charges of $0.2 million. On a non-GAAP basis, excluding these charges, the Company's net income totaled $4.6 million, or $0.13 per diluted share, compared to net income of $6.7 million, or $0.18 per diluted share, and came in ahead of Wall Street's estimates of $0.10 per share.

Vera's Segment Results

For Q2 FY18, the Direct segment's revenues totaled $89.3 million, up 2.4% compared to $87.2 million in Q2 FY17. The segment's comparable sales (including ecommerce) decreased 4.3% on a y-o-y basis, negatively impacted by year-over-year declines in store and ecommerce traffic.

The Direct segment's operating income was $17.3 million, or 19.4% of net revenues, compared to $18.1 million, or 20.8% of net revenues, in Q2 FY17. On a non-GAAP basis, the Company's Direct segment's operating income was $17.6 million, or 19.8% of net revenues, for the reported quarter versus $19.7 million, or 22.6% of net revenues, in the year-ago same period.

During Q2 FY18, the Indirect segment's revenues decreased 27.9% to $23.1 million from $32.0 million in Q2 FY17, reflecting a reduction in the number of specialty accounts coupled with a reduction in orders from both specialty accounts and certain key accounts. The Indirect segment's operating income was $7.8 million, or 33.9% of net revenues, compared to $12.0 million, or 37.5% of net revenues, in the prior year's corresponding quarter.

Cash Matters

Vera's net capital spending totaled $2.7 million for Q2 FY18. During the reported quarter, the Company repurchased approximately $2.1 million worth of its common stock, approximately 242,000 shares at an average price of $8.79, bringing the total for the six-month period to $3.3 million, approximately 373,000 shares at an average price of $8.90. Vera has approximately $18.0 million remaining under its share repurchase authorization that expires in December 2017.

Vera's cash, cash equivalents, and investments as of July 29, 2017, totaled $102.3 million compared to $85.5 million at the end of Q2 FY16. The Company had no debt outstanding at quarter end. Vera's quarter-end inventory was $104.1 million compared to $96.5 million at the end of the year-ago same period.

Outlook

For Q3 FY18, Vera is forecasting net revenues in the range of $112 million to $117 million. The Company is expecting gross profit percentage of 57.1% to 57.6% and SG&A as a percentage of net revenues of 50.8% to 51.3% compared. Vera is estimating diluted earnings per share of $0.13 to $0.15, and an effective tax rate of 35.0% The Company is expecting inventory of $100 million to $110 million at the end of the upcoming quarter.

For FY18, Vera is projecting net revenues of $460 million to $470 million. The Company is estimating gross profit percentage of 55.5% to 56.0% and SG&A as a percentage of net revenues of 49.9% to 50.1%. Vera is anticipating diluted earnings per share of $0.44 to $0.50, and an effective tax rate of 38.0%. The Company's net capital spending for FY18 are expected to be approximately $10 million to $15 million.

Stock Performance

At the close of trading session on Wednesday, September 20, 2017, Vera Bradley's stock price marginally rose 0.36% to end the day at $8.46. A total volume of 312.23 thousand shares were exchanged during the session. The Company's shares are trading at a PE ratio of 29.89. At Wednesday's closing price, the stock's net capitalization stands at $299.99 million.

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