Vera Bradley Shares Drop as Company Slashes Outlook
08 December 2016 - 2:00AM
Dow Jones News
Shares of handbag retailer Vera Bradley Inc. dropped sharply
Wednesday as the company lowered its full-year outlook after
missing its own guidance range for the third quarter.
After forecasting that sales would pick up in the back half the
year on the company's second-quarter conference call, Chief
Executive Robert Wallstrom said Wednesday that
headwinds—particularly in the wholesale channel—will continue to
weigh on earnings for the final quarter.
Increased promotional activity and soft demand have continued to
weigh on the bottom line of the Fort Wayne, Ind., company, known
for its brightly patterned quilted tote bags.
Shares dropped 22% to $11.50 in premarket trading.
On Wednesday, Vera Bradley forecast fourth-quarter earnings of
23 cents to 25 cents a share on revenue of $135 million to $140
million. Analysts surveyed by Thomson Reuters estimated 47 cents a
share on $158.8 million.
The company also lowered its current-year forecast to earnings
of 62 cents to 65 cents a share on revenue of $486 million to $491
million. In September, the company had forecast earnings of 88
cents to 92 cents on $510 to $515 million in revenue.
Over all for the quarter, Vera Bradley reported a profit of $8.8
million, or 24 cents a share, down from $10.3 million, or 27 cents
a share, a year earlier. Excluding certain tax-related charges, the
company posted earnings of $7.2 million or 20 cents per share, down
from $10.3 or 27 cents last year.
Comparable sales slid for the eighth consecutive quarter by
5.7%, while total sales were flat at $127.7 million.
Analysts polled by Thomson Reuters had forecast earnings of 22
cents on $129.2 million in revenue.
Write to Imani Moise at imani.moise@wsj.com
(END) Dow Jones Newswires
December 07, 2016 09:45 ET (14:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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