Vera Bradley announced leadership appointments and reported financial results for the fourth quarter and fiscal year ended January 31, 2026.

Vera Bradley, Inc. (Nasdaq: VRA) (the "Company") today announced key leadership appointments and its financial results for the fourth quarter and fiscal year ended January 31, 2026 ("Fiscal 2026").

Leadership Appointments

Today the Board of Directors appointed Ian Bickley as Chairman and Chief Executive Officer of Vera Bradley. For the past eight months, Mr. Bickley has served as Executive Chairman and has been deeply involved in accelerating Vera Bradley's transformation, including the development of the Project Sunshine initiative, the recruitment of key talent, and a renewed focus on agility and operational excellence.

"After an extensive search, the Board is delighted that Ian has accepted this important role. He brings deep and relevant strategic and operational experience in building and transforming global brands, including executive roles at Coach and on the Boards of Crocs, Brilliant Earth and Natura. He has already made a significant impact on the business, the talent and the organization," said Andrew Meslow, lead Independent Director of Vera Bradley.

The Board also appointed Martin Layding as Chief Operating and Financial Officer. Mr. Layding joined Vera Bradley as Chief Financial Officer in June 2025.

"I'm thrilled with the opportunity to lead the next chapter of this iconic and storied brand. I look forward to continuing to work with the Board and exceptional management team at Vera Bradley," commented Mr. Bickley.

Fourth Quarter and Fiscal Year 2026

"We are pleased to report that our fourth quarter results reflect meaningful progress in our transformation journey," said Ian Bickley, Chairman and Chief Executive Officer of Vera Bradley. "Returning to profitability for the first time in over a year, combined with our third consecutive quarter of sequential improvement in the Direct channel, gives us confidence that Project Sunshine is beginning to resonate with our customers. With Direct channel revenues declining just 2.6% versus prior year, and our fiscal 2027 first quarter tracking positive, we are seeing encouraging signs of stabilization."

Bickley continued, "The Board's decision to name me permanent CEO and expand Marty's role to Chief Operating and Financial Officer reflects our shared confidence in the path forward. We have been fortunate to bring together talented leaders across merchandising, marketing, digital commerce, wholesale, and stores. The positive response to the return of beloved styles like the original 100 Bag, along with strong double-digit positive comp growth in our brand channels for the second consecutive quarter, suggests we're making progress with our product assortment."

"We recognize there's still considerable work ahead, but we are encouraged by our return to profitability, the sequential improvements we have seen, and the strong liquidity position entering the new fiscal year. With reestablished guidance, demonstrating greater visibility in our business, we are looking forward to building on this momentum and working toward sustainable long-term growth, profitability and cash flow generation under Project Sunshine," concluded Bickley.

Summary of Fourth Quarter Financial Performance

Consolidated net revenues from continuing operations totaled $84.9 million compared to $86.4 million in the prior year fourth quarter ended February 1, 2025.

Vera Bradley, Inc.'s net income from continuing operations totaled $2.7 million, or $0.09 per diluted share. On a non-GAAP basis, net income from continuing operations totaled $2.5 million, or $0.09 per diluted share.

For the prior year fourth quarter, net loss from continuing operations totaled ($20.0) million, or ($0.72) per diluted share. On a non-GAAP basis, net loss from continuing operations totaled ($5.4) million, or ($0.19) per diluted share.

Summary of Fiscal Year 2026 Financial Performance

Consolidated net revenues totaled $269.7 million, compared to $318.8 million for Fiscal 2025.

Net loss from continuing operations totaled ($32.7) million, or ($1.17) per diluted share. GAAP results from continuing operations for the year were significantly affected by a $5.2 million inventory write-down related to a strategic product shift toward cotton and heritage prints, along with a $4.0 million write-off of television media credits which were acquired to support the Company's Project Restoration efforts and won't be fully utilized with the focus on digital and performance marketing. On a non-GAAP basis, net loss from continuing operations totaled ($16.4) million, or ($0.59) per diluted share.

For the prior fiscal year, net loss from continuing operations totaled ($33.4) million, or ($1.15) per diluted share. On a non-GAAP basis, net loss from continuing operations totaled ($13.1) million, or ($0.45) per diluted share.

Fourth Quarter Details

Direct segment revenues totaled $74.5 million, a 2.6% decrease from $76.5 million in the prior year fourth quarter. Comparable sales declined 0.7%, driven by traffic and conversion declines predominately in outlet stores, partially offset by increased ecommerce revenues compared to prior year fourth quarter. Revenues were negatively impacted by winter storm Fern by approximately $0.4 million. During the fourth quarter, the Company closed two underperforming full-line stores.

Indirect segment revenues totaled $10.4 million, a 4.9% increase from $9.9 million in the prior year fourth quarter. The increase was driven by a large wholesale spring collaboration to be announced at a future date.

Consolidated gross profit totaled $40.6 million, or 47.8% of net revenues, compared to $39.7 million, or 45.9% of net revenues, in the prior year. On a non-GAAP basis, consolidated gross profit totaled $40.5 million, or 47.8% of net revenues, compared to $40.4 million, or 46.8% of net revenues, in the prior year. The increase in consolidated gross profit as a percentage of net revenues resulted from lower promotional activity in the outlet channel and freight cost savings, partially offset by lower margin sales associated with last year's Project Restoration inventory, as well as incremental duty costs.

Consolidated SG&A expense totaled $38.2 million, or 45.0% of net revenues, compared to $52.2 million, or 60.5% of net revenues, in the prior year. On a non-GAAP basis, consolidated SG&A expense totaled $37.3 million, or 43.9% of net revenues, compared to $47.9 million, or 55.4% of net revenues, in the prior year. The decrease in non-GAAP SG&A expense resulted from continued cost reduction initiatives, marketing expense reductions and phasing throughout the year, and reduced lease costs.

Operating income from continuing operations totaled $2.7 million, or 3.2% of net revenues, compared to an operating loss from continuing operations of ($12.4) million, or (14.4%) of net revenues, in the prior year fourth quarter. On a non-GAAP basis, consolidated operating income totaled $3.6 million, or 4.2% of net revenues, compared to an operating loss from continuing operations of ($7.3) million, or (8.5%) of net revenues, in the prior year fourth quarter.

By segment:

Direct operating income was $11.8 million, or 15.9% of Direct net revenues, compared to $5.7 million, or 7.5% of Direct net revenues, in the prior year. On a non-GAAP basis, Direct operating income totaled $11.9 million, or 15.9% of Direct revenues, compared to $6.4 million, or 8.4% of Direct net revenues, in the prior year.

Indirect operating income was $3.5 million, or 34.0% of Indirect net revenues, compared to $0.8 million, or 7.9% of Indirect net revenues, in the prior year. On a non-GAAP basis, Indirect operating income totaled $3.5 million, or 34.1% of Indirect net revenues, compared to $2.0 million, or 20.3% of Indirect net revenues, in the prior year.

Fiscal Year 2026 Details

Direct segment revenues totaled $227.8 million, an 11.6% decrease from $257.6 million in the prior year. Comparable sales declined 11.6%, and the Company permanently closed twelve full-line stores and one outlet store, while opening two full-line stores in the last twelve months.

Indirect segment revenues totaled $41.9 million, a 31.6% decrease from $61.2 million in the prior year. The decrease was primarily related to a decline in specialty and key account orders, as well as a decrease in liquidation sales.

Consolidated gross profit totaled $125.0 million, or 46.4% of net revenues, compared to $158.8 million, or 49.8% of net revenues, in the prior year. On a non-GAAP basis, gross profit totaled $126.4 million, or 46.9% of net revenues, compared to $160.5 million, or 50.3% of net revenues, in the prior year. The decrease in consolidated gross profit as a percentage of net revenues was driven by the write-off of last year's Project Restoration inventory, partially offset by improved product margins across channels driven by more favorable promotional activity and pricing, offsetting the impact of tariffs.

Consolidated SG&A expense totaled $158.1 million, or 58.6% of net revenues, compared to $188.5 million, or 59.1% of net revenues, in the prior year. On a non-GAAP basis, consolidated SG&A expense totaled $149.3 million, or 55.4% of net revenues, compared to $179.8 million, or 56.4% of net revenues, in the prior year. The decrease in non-GAAP SG&A expense was due primarily to cost reduction initiatives, reduced headcount, and a reduction in variable expenses.

Operating loss from continuing operations totaled ($31.9) million, or (11.8%) of net revenues, compared to ($28.8) million, or (9.0%) of net revenues, in the prior year. On a non-GAAP basis, the Company's current year consolidated operating loss from continuing operations was ($21.7) million, or (8.0%) of net revenues, compared to ($18.5) million, or (5.8%) of net revenues, in the prior year.

By segment:

Direct operating income was $18.3 million, or 8.0% million of Direct net revenues, compared to $25.2 million, or 9.8% of Direct net revenues, in the prior year. On a non-GAAP basis, current year Direct operating income was $20.8 million, or 9.1% of Direct net revenues, compared to $29.5 million, or 11.5% of Direct net revenues, in the prior year.

Indirect operating income was $8.6 million, or 20.5% of Indirect net revenues, compared to $15.4 million, or 25.2% of Indirect net revenues, in the prior year. On a non-GAAP basis, Indirect operating income totaled $8.8 million, or 21.0% of Indirect net revenues, compared to $17.4 million, or 28.4% of Indirect net revenues, in the prior year.

Balance Sheet

Cash and cash equivalents as of January 31, 2026 totaled $18.5 million compared to $28.6 million at the prior fiscal year end. The Company had no borrowings on its asset-based lending ("ABL") facility at year end.

Total Fiscal 2026 year-end inventory was $76.0 million, including the impact of the $5.2 million aforementioned inventory reserve, compared to $91.4 million at the prior fiscal year end.

Net capital spending for the fiscal year ended January 31, 2026 totaled $3.3 million compared to $10.4 million in the prior year and was driven by new store openings along with investments associated with Project Restoration that occurred in the prior year.

Fiscal Year 2027 Guidance

Excluding net revenues, all guidance-related numbers are non-GAAP. The prior year income statement numbers used in the forward-looking discussion below are also non-GAAP as they exclude the previously disclosed charges for severance, consulting and professional fees primarily associated with strategic initiatives, professional fees associated with the sale of Pura Vida, PPE impairment, transformation initiatives, PO cancellation fees, and inventory write-offs associated with the sale of Pura Vida.

The Company continues to focus on stabilizing the business and plans for sales to be in the range of $255 million to $270 million.

The guided sales range incorporates not holding the Company's annual outlet sale event and rebuilding of the wholesale business under new leadership, while also placing less emphasis on liquidation channels.

Due to continued operational focus, the Company anticipates improvements in gross profit and SG&A rates, enabling operating loss improvement by 40% or better versus the prior year loss of ($21.7) million.

Disclosure Regarding Non-GAAP Measures

Non-GAAP Numbers

The current year non-GAAP fourth quarter and fiscal year income statement numbers referenced below exclude the previously outlined charges for severance, consulting and professional fees primarily associated with strategic initiatives, professional fees associated with the sale of Pura Vida, PPE impairment, transformation initiatives, PO cancellation fees, and inventory write-offs associated with the sale of Pura Vida, and the income tax effect related to these items. The prior year fourth quarter and fiscal year income statement numbers referenced below exclude the previously outlined charges for severance, PPE impairment, last year's Project Restoration initiatives, software abandonment, consulting and professional fees primarily associated with strategic initiatives, one-time vendor charges, and the income tax effect related to these items.

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 cash usage; gross profit; selling, general, and administrative expenses; operating income (loss) from continuing operations; net income (loss) from continuing operations; and diluted net income (loss) from continuing operations per share, 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. 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.

Consistent with SEC regulations, the Company has not provided a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures in reliance on the "unreasonable efforts" exception set forth in the applicable regulations, because there is substantial uncertainty associated with predicting any future adjustments the Company may make to its GAAP financial measures in calculating non-GAAP financial measures.

Call Information

A conference call to discuss results for the fourth quarter and fiscal year financial results is scheduled for today, Thursday, March 12, 2026, at 8:30 a.m. Eastern Time.

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