Vera Bradley, Inc. (VRA) Q3 2026 Earnings Call Transcript

Revenues $62.3 million, 11.7% below prior year. This compared to a 24.6% decline during the second quarter. Reasons for the decline include strategic product shifts and adjustments in promotional strategies.

Direct Business Segment Revenues $49.7 million, 5.3% below prior year compared to a decline of 16.2% in the second quarter. Sequential improvement in key metrics in nearly all direct segment channels, driven by product-led initiatives and positive comparable channel sales.

Net Loss from Continuing Operations Negative $8.3 million or negative $0.30 per diluted share, compared to negative $3.7 million or negative $0.13 per diluted share last year. The loss was significantly affected by a $5.9 million inventory write-down and a $4 million write-off of television media credits.

Gross Margin $26 million or 41.7% of net revenues, compared to $38.4 million or 54.5% of net revenues in the prior year. Excluding the inventory write-down, gross margin was 51.2%, showing sequential improvement. The decrease was due to inventory write-downs and additional duty expenses, partially offset by pricing improvements.

SG&A Expenses $37.4 million or 60.0% of net revenues, compared to $43.6 million or 61.8% of net revenues in the prior year. The decrease was due to lower compensation expenses and other cost reduction initiatives, partially offset by the media credit write-off.

Operating Loss from Continuing Operations Negative $11.1 million or negative 17.8% of net revenues, compared to negative $5 million or negative 7.1% of net revenues in the prior year. Excluding inventory reserve and media credits write-off, the operating loss was negative $1.2 million or negative 1.9% of net revenues.

Inventory $82.9 million, a 24.3% decrease year-over-year from $109.6 million. The decrease reflects strategic efforts to align receipts with sales expectations and optimize assortments.