Vera Bradley Inc

Previous wording

The following discussion summarizes the significant factors affecting the condensed consolidated operating results, financial condition, liquidity, and cash flows of the Company as of and for the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023. The following discussion should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended February 3, 2024, and our unaudited condensed consolidated financial statements and the related notes included in Item 1 of this Quarterly Report. The results of operations for the thirteen and twenty-six weeks ended August 3, 2024, are not necessarily indicative of the results to be expected for the full fiscal year.

Current wording

The following discussion summarizes the significant factors affecting the condensed consolidated operating results, financial condition, liquidity, and cash flows of the Company as of and for the thirteen and thirty-nine weeks ended November 2, 2024 and October 28, 2023. The following discussion should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended February 3, 2024, and our unaudited condensed consolidated financial statements and the related notes included in Item 1 of this Quarterly Report. The results of operations for the thirteen and thirty-nine weeks ended November 2, 2024, are not necessarily indicative of the results to be expected for the full fiscal year.

Previous wording

Macroeconomic and Other Factors. We have been impacted by higher tariffs from previously duty-free countries, where we source products, as a result of the expiration of the Generalized System of Preferences (“GSP”) duty-free status at the end of calendar year 2020. In addition, the macroeconomic environment has been further challenged by inflationary pressures and other related factors that have impacted consumer discretionary spending. We continued to see weakness in both the Vera Bradley outlet store business and full line stores in the second quarter of fiscal 2025. Additionally, the Vera Bradley annual outlet sale was held in the first quarter of fiscal 2025, a timing shift from the second quarter of fiscal 2024.

Current wording

Macroeconomic and Other Factors. We continue to be impacted by higher tariffs from previously duty-free countries, where we source products, as a result of the expiration of the Generalized System of Preferences (“GSP”) duty-free status at the end of calendar year 2020. In addition, the macroeconomic environment has been further challenged by inflationary pressures and other related factors that have impacted consumer discretionary spending. We continued to see weakness in both the Vera Bradley outlet store business and full line stores in the third quarter of fiscal 2025.

Previous wording

Operating income (loss) is equal to gross profit less SG&A expenses plus other income, net. Operating income (loss) excludes interest income, interest expense, and income taxes.

Current wording

Operating (loss) income is equal to gross profit less SG&A expenses plus other income, net. Operating (loss) income excludes interest income, interest expense, and income taxes.

Previous wording

Net income (loss) is equal to operating income (loss) plus interest income less interest expense and income taxes.

Current wording

Net (loss) income is equal to operating (loss) income plus interest income less interest expense and income taxes.

Previous wording

Refer to Note 15 to the Notes to the Consolidated Financial Statements filed with the SEC on Form 10-K for the fiscal year ended February 3, 2024, for additional information regarding the indefinite-lived intangible assets impairment test and impairment charges recorded during fiscal 2024. There were no impairment charges recorded during the thirteen and twenty-six weeks ended August 3, 2024 or July 29, 2023. We are unable to predict the extent of the impact that the inflationary environment could have on our operations, the economy, or other factors; therefore, it is possible additional impairments could be identified in future periods, and such amounts could be material.

Current wording

Refer to Note 15 to the Notes to the Consolidated Financial Statements filed with the SEC on Form 10-K for the fiscal year ended February 3, 2024, for additional information regarding the indefinite-lived intangible assets impairment test and impairment charges recorded during fiscal 2024. There were no impairment charges recorded during the thirteen and thirty-nine weeks ended November 2, 2024 or October 28, 2023. Depending on the results of future impairment tests, it is possible additional impairments could be identified in future periods, and such amounts could be material.

Previous wording

Property, plant, and equipment and lease right-of-use assets (the “asset group” for store-related assets) are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable. The reviews are conducted at the lowest identifiable level of cash flows. If the estimated undiscounted future cash flows related to the asset group are less than the carrying value, we recognize a loss equal to the difference between the carrying value and the fair value, as further defined in Note 5 to the Notes to the Condensed Consolidated Financial Statements herein. There were no impairment charges recorded during the thirteen and twenty-six weeks ended August 3, 2024 or July 29, 2023. We are unable to predict the extent of the impact that the inflationary environment could have on our operations, the economy, or other factors; therefore, it is possible additional impairments could be identified in future periods, and such amounts could be material.

Current wording

Property, plant, and equipment and lease right-of-use assets (the “asset group” for store-related assets) are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable. The reviews are conducted at the lowest identifiable level of cash flows. If the estimated undiscounted future cash flows related to the asset group are less than the carrying value, we recognize a loss equal to the difference between the carrying value and the fair value, as further defined in Note 5 to the Notes to the Condensed Consolidated Financial Statements herein. Impairment charges of $2.2 million were recognized during the thirteen and thirty-nine weeks ended November 2, 2024, for store property, plant, and equipment charges, which are included in SG&A expenses within the Condensed Consolidated Statements of Operations and within impairment charges in the Condensed Consolidated Statements of Cash Flows. $2.1 million of the impairment charge is included in the Direct segment, and $0.1 million is included in the Pura Vida segment for the thirteen and thirty-nine weeks ended November 2, 2024. There were no impairment charges recorded during the thirteen and thirty-nine weeks ended October 28, 2023. We are unable to predict the extent of the impact that the inflationary environment could have on our operations, the economy, or other factors; therefore, it is possible additional impairments could be identified in future periods, and such amounts could be material.

Previous wording

VB Direct. For the thirteen weeks ended August 3, 2024, net revenues in the VB Direct segment decreased $13.5 million, or 15.7%, to $72.2 million, from $85.7 million in the comparable prior-year period. Vera Bradley comparable sales decreased 11.2%, which includes a 14.1% decrease in comparable store sales and a 5.3% decrease in e-commerce sales. In addition, non-comparable store revenue decreased $0.5 million. The decrease in comparable store sales was primarily due to reduced traffic and lower average transaction size in the outlet and full-line channels. In addition, the decrease in net revenues was attributed to a timing shift of sales from the Vera Bradley annual outlet sale held during the first quarter of fiscal 2025 compared to the second quarter of fiscal 2024.

Current wording

VB Direct. For the thirteen weeks ended November 2, 2024, net revenues in the VB Direct segment decreased $19.8 million, or 27.4%, to $52.5 million, from $72.3 million in the comparable prior-year period. Vera Bradley comparable sales decreased 27.2%, which includes a 32.6% decrease in comparable store sales and a 17.5% decrease in e-commerce sales. In addition, non-comparable store revenue decreased $0.5 million. The decrease in comparable sales and comparable store sales was primarily due to reduced traffic, conversion, and units sold in the e-commerce, full-line, and outlet channels.

Previous wording

Pura Vida. For the twenty-six weeks ended August 3, 2024, net revenues in the Pura Vida segment decreased $15.7 million, or 34.8%, to $29.5 million, from $45.2 million in the comparable prior-year period. The decrease was primarily due to a decline in e-commerce and wholesale sales, partially offset by an increase in retail store sales associated with the opening of a new retail store in the current-year period.

Current wording

Pura Vida. For the thirteen weeks ended November 2, 2024, net revenues in the Pura Vida segment decreased $7.6 million, or 42.9%, to $10.1 million, from $17.7 million in the comparable prior-year period. The decrease was primarily due to a decline in e-commerce and wholesale sales.

Previous wording

For the thirteen weeks ended August 3, 2024, gross profit decreased $15.6 million, or 21.7%, to $56.4 million, from $72.0 million in the comparable prior-year period. As a percentage of net revenues, gross profit decreased to 50.9% for the thirteen weeks ended August 3, 2024, from 56.2% in the comparable prior-year period. Current year gross margin was negatively impacted by increased liquidation sales in the Indirect segment and promotional activity in the Direct segment.

Current wording

For the thirteen weeks ended November 2, 2024, gross profit decreased $19.4 million, or 30.8%, to $43.6 million, from $63.0 million in the comparable prior-year period. As a percentage of net revenues, gross profit decreased to 54.1% for the thirteen weeks ended November 2, 2024, from 54.8% in the comparable prior-year period. Current year gross margin was negatively impacted by sales channel mix as well as an increase in outbound freight costs.

Previous wording

For the thirteen weeks ended August 3, 2024, SG&A expenses decreased $5.8 million, or 9.7%, to $53.6 million, from $59.4 million in the comparable prior-year period. As a percentage of net revenues, SG&A expenses increased to 48.4% for the thirteen weeks ended August 3, 2024, from 46.3% in the comparable prior-year period. SG&A expenses related to Vera Bradley and corporate unallocated were $44.0 million compared to $47.7 million in the comparable prior-year period. SG&A expenses related to Pura Vida were $9.6 million compared to $11.7 million in the comparable prior-year period. For the thirteen weeks ended August 3, 2024, consolidated SG&A expenses decreased primarily due to a $4.6 million reduction in employee-related costs, including lower variable compensation and reduced headcount, and a $1.8 million reduction in other expenses including variable selling expenses resulting from sales decreases as described above, variable lease costs, certain professional fees, and other cost reduction initiatives. These decreases were partially offset by a $0.6 million increase in advertising spend, largely associated with Project Restoration initiatives.

Current wording

For the thirteen weeks ended November 2, 2024, SG&A expenses decreased $2.2 million, or 3.8%, to $54.2 million, from $56.4 million in the comparable prior-year period. As a percentage of net revenues, SG&A expenses increased to 67.3% for the thirteen weeks ended November 2, 2024, from 49.0% in the comparable prior-year period. SG&A expenses related to Vera Bradley and corporate unallocated were $46.3 million compared to $45.0 million in the comparable prior-year period. SG&A expenses related to Pura Vida were $7.9 million compared to $11.4 million in the comparable prior-year period. For the thirteen weeks ended November 2, 2024, consolidated SG&A expenses decreased primarily due to a $3.1 million reduction in employee-related costs, including lower variable compensation and reduced headcount; $0.8 million selling expense reduction resulting from sales decreases as described above; and $0.7 million intangible asset amortization in the prior-year period that did not occur in the current-year period. These decreases were partially offset by $2.2 million of property, plant, and equipment impairment charges in the current year period.

Previous wording

For the twenty-six weeks ended August 3, 2024, net other income was $0.6 million, consistent with comparable prior-year period.

Current wording

For the thirteen weeks ended November 2, 2024, net other income totaled $0.1 million, consistent with the comparable prior-year period.

Previous wording

For the twenty-six weeks ended August 3, 2024, there was an operating loss of $(8.6) million, a $15.1 million decrease, or 232.0%, from operating income of $6.5 million in the comparable prior-year period. As a percentage of net revenues, operating (loss) income was (4.5)% and 2.9% for the twenty-six weeks ended August 3, 2024 and July 29, 2023, respectively. Operating loss increased due to the factors described in the captions above.

Current wording

For the thirteen weeks ended November 2, 2024, there was an operating loss of $(10.5) million, a $17.3 million decrease, or 254.3%, from operating income of $6.8 million in the comparable prior-year period. As a percentage of net revenues, operating (loss) income was (13.0)% and 5.9% for the thirteen weeks ended November 2, 2024 and October 28, 2023, respectively. Operating loss increased due to the factors described in the captions above.

Previous wording

Pura Vida. For the thirteen weeks ended August 3, 2024, operating income in the Pura Vida segment decreased $3.9 million, or 97.8%, to $0.1 million from $4.0 million in the comparable prior-year period. As a percentage of Pura Vida segment net revenues, operating income in the Pura Vida segment was 0.5% and 15.9% for the thirteen weeks ended August 3, 2024 and July 29, 2023, respectively. The decrease in operating income as a percentage of Pura Vida net revenues was primarily due to SG&A expense deleverage associated with a decrease in sales, excluding non-comparable stores.

Current wording

Pura Vida. For the thirteen weeks ended November 2, 2024, operating loss in the Pura Vida segment increased $2.1 million, or 367.4%, to $(2.7) million from $(0.6) million in the comparable prior-year period. As a percentage of Pura Vida segment net revenues, operating loss in the Pura Vida segment was (26.9)% and (3.3)% for the thirteen weeks ended November 2, 2024 and October 28, 2023, respectively. The increase in operating loss as a percentage of Pura Vida net revenues was primarily due to SG&A expense deleverage associated with a decrease in sales, an increase in promotional activity, and property, plant, and equipment charges of $0.1 million.

Previous wording

Corporate Unallocated. For the thirteen weeks ended August 3, 2024, unallocated expenses decreased $2.6 million, or 14.3%, to $15.4 million from $18.0 million in the comparable prior-year period. The decrease in unallocated expenses was primarily due to a decrease in employee related expenses of $2.8 million and $0.2 million in other net corporate expense reductions. The decrease was partially offset by an increase of $0.4 million in advertising expenses associated with Project Restoration initiatives.

Current wording

Corporate Unallocated. For the thirteen weeks ended November 2, 2024, unallocated expenses decreased $1.4 million, or 7.9%, to $15.9 million from $17.3 million in the comparable prior-year period. The decrease in unallocated expenses was primarily due to a decrease in employee related expenses of $1.2 million and $0.2 million in other net corporate expense reductions.

Previous wording

The effective tax rate for the thirteen weeks ended August 3, 2024, was (77.5)%, compared to 28.0% for the thirteen weeks ended July 29, 2023. The change in year-over-year effective tax rate was primarily due to a change in the projection of the Company's annual income in the current fiscal quarter. The year-over-year effective tax rate also reflects the relative impact of permanent and discrete items in the current-year period compared to the prior-year period, primarily as a result of non-deductible executive compensation. See Note 7 "Income Taxes" of the Notes to the Condensed Consolidated Financial Statements for additional information about the Company's interim provision for income taxes.

Current wording

The effective tax rate for the thirteen weeks ended November 2, 2024, was (23.5)%, compared to 27.6% for the thirteen weeks ended October 28, 2023. The change in year-over-year effective tax rate was primarily due to a change in the projection of the Company's annual income in the current fiscal quarter. The year-over-year effective tax rate also reflects the relative impact of permanent and discrete items in the current-year period compared to the prior-year period, primarily as a result of the impact of foreign operations as well as non-deductible executive compensation. See Note 7 "Income Taxes" of the Notes to the Condensed Consolidated Financial Statements for additional information about the Company's interim provision for income taxes.

Previous wording

For the thirteen weeks ended August 3, 2024, net income decreased $3.6 million to $5.7 million from $9.3 million in the comparable prior-year period due to the factors described in the captions above.

Current wording

For the thirteen weeks ended November 2, 2024, there was an net loss of $(12.8) million, a $17.9 million decrease, or 350.1%, from net income of $5.1 million in the comparable prior-year period due to the factors described in the captions above.

Previous wording

VB Direct. For the twenty-six weeks ended August 3, 2024, net revenues in the VB Direct segment decreased $16.0 million, or 11.0%, to $128.6 million, from $144.6 million in the comparable prior-year period. Vera Bradley comparable sales decreased 10.5%, which includes a 13.8% decrease in comparable store sales as well as a decrease in e-commerce sales of 4.4%. In addition, non-comparable store revenue decreased $0.7 million. The decrease in comparable sales and comparable store sales was primarily due to reduced traffic and lower average transaction size in the outlet and full-line channels.

Current wording

VB Direct. For the thirty-nine weeks ended November 2, 2024, net revenues in the VB Direct segment decreased $35.8 million, or 16.5%, to $181.1 million, from $216.9 million in the comparable prior-year period. Vera Bradley comparable sales decreased 16.0%, which includes a 20.1% decrease in comparable store sales as well as a decrease in e-commerce sales of 8.3%. In addition, non-comparable store revenue decreased $1.2 million. The decrease in comparable sales and comparable store sales was primarily due to reduced traffic, conversion, and units sold in the full-line and outlet channels.

Previous wording

VB Indirect. For the twenty-six weeks ended August 3, 2024, net revenues in the VB Indirect segment increased $0.6 million, or 1.7%, to $33.3 million, from $32.7 million in the comparable prior-year period. The increase was primarily due to an increase in liquidation sales and key account orders, partially offset by a decrease in specialty account orders.

Current wording

VB Indirect. For the thirty-nine weeks ended November 2, 2024, net revenues in the VB Indirect segment decreased $6.4 million, or 11.1%, to $51.3 million, from $57.7 million in the comparable prior-year period. The decrease was primarily due to a decrease in specialty account orders, liquidation sales, and key account orders.

Previous wording

Pura Vida. For the thirteen weeks ended August 3, 2024, net revenues in the Pura Vida segment decreased $8.3 million, or 33.0%, to $16.8 million, from $25.1 million in the comparable prior-year period. The decrease was primarily due to a decline in e-commerce and wholesale sales, partially offset by an increase in retail store sales associated with the opening of a new retail store in the current-year period.

Current wording

Pura Vida. For the thirty-nine weeks ended November 2, 2024, net revenues in the Pura Vida segment decreased $23.3 million, or 37.1%, to $39.6 million, from $62.9 million in the comparable prior-year period. The decrease was primarily due to a decline in e-commerce and wholesale sales, partially offset by an increase in retail store sales associated with the opening of two new retail stores in the current-year period.

Previous wording

For the twenty-six weeks ended August 3, 2024, gross profit decreased $25.5 million, or 20.6%, to $98.3 million, from $123.8 million in the comparable prior-year period. As a percentage of net revenues, gross profit decreased to 51.3% for the twenty-six weeks ended August 3, 2024, from 55.6% in the comparable prior-year period. Current year gross margin was negatively impacted by one-time vendor charges, as well as increased liquidation sales and promotional activity.

Current wording

For the thirty-nine weeks ended November 2, 2024, gross profit decreased $44.9 million, or 24.0%, to $141.9 million, from $186.8 million in the comparable prior-year period. As a percentage of net revenues, gross profit decreased to 52.2% for the thirty-nine weeks ended November 2, 2024, from 55.3% in the comparable prior-year period. Current year gross margin was negatively impacted by sales channel mix, increases in promotional activity, and one-time vendor charges.

Previous wording

For the twenty-six weeks ended August 3, 2024, SG&A expenses decreased $10.5 million, or 8.9%, to $107.4 million, from $117.9 million in the comparable prior-year period. As a percentage of net revenues, SG&A expenses increased to 56.1% for the twenty-six weeks ended August 3, 2024, from 53.0% in the comparable prior-year period. SG&A expenses related to Vera Bradley and corporate unallocated were $88.8 million compared to $95.5 million in the comparable prior-year period. SG&A expenses related to Pura Vida were $18.6 million compared to $22.4 million in the comparable prior-year period. For the twenty-six weeks ended August 3, 2024, consolidated SG&A expenses decreased primarily due to a $7.8 million reduction in employee-related costs, including lower variable compensation, reduced headcount, and decrease in severance charges compared to the prior-year period; and a $3.1 million reduction in other expenses including variable selling expenses resulting from sales decreases as described above, variable lease costs, certain professional fees, and other cost reduction initiatives. These decreases were partially offset by a $0.4 million increase in advertising spend associated with Project Restoration initiatives.

Current wording

For the thirty-nine weeks ended November 2, 2024, SG&A expenses decreased $12.7 million, or 7.3%, to $161.6 million, from $174.3 million in the comparable prior-year period. As a percentage of net revenues, SG&A expenses increased to 59.4% for the thirty-nine weeks ended November 2, 2024, from 51.6% in the comparable prior-year period. SG&A expenses related to Vera Bradley and corporate unallocated were $135.1 million compared to $140.5 million in the comparable prior-year period. SG&A expenses related to Pura Vida were $26.5 million compared to $33.7 million in the comparable prior-year period. For the thirty-nine weeks ended November 2, 2024, consolidated SG&A expenses decreased primarily due to a $10.9 million reduction in employee-related costs, including lower variable compensation, reduced headcount, and decrease in severance charges compared to the prior-year period; a $1.8 million reduction in variable selling expenses resulting from sales decreases as described above; a $0.8 decrease in professional fees; a $0.8 million reduction in intangible asset amortization; and a $0.6 million reduction in building expenses. These decreases were partially offset by $2.2 million of property, plant, and equipment impairment charges in the current year period.

Previous wording

For the thirteen weeks ended August 3, 2024, net other income decreased $0.2 million to $0.1 million compared to $0.3 million in the comparable prior-year period. The decrease in net other income was primarily due to the timing shift of ticket sales from the Vera Bradley annual outlet sale which took place in the second quarter of fiscal 2024, compared to the first quarter of fiscal 2025.

Current wording

For the thirty-nine weeks ended November 2, 2024, net other income decreased $0.1 million to $0.7 million, from $0.8 million in the comparable prior-year period. The decrease in net other income was primarily due to ticket sales from the Vera Bradley annual outlet sale.

Previous wording

VB Indirect. For the thirteen weeks ended August 3, 2024, operating income in the VB Indirect segment decreased $1.5 million, or 23.6%, to $4.7 million from $6.2 million in the comparable prior-year period. As a percentage of VB Indirect segment net revenues, operating income in the VB Indirect segment was 21.8% and 35.7% for the thirteen weeks ended August 3, 2024 and July 29, 2023, respectively. The decrease in operating income as a percentage of VB Indirect segment net revenues was due to a decrease in gross margin as a percentage of net revenues as described above.

Current wording

VB Indirect. For the thirty-nine weeks ended November 2, 2024, operating income in the VB Indirect segment decreased $5.3 million, or 26.4%, to $14.6 million from $19.9 million in the comparable prior-year period. As a percentage of VB Indirect segment net revenues, operating income in the VB Indirect segment was 28.5% and 34.4% for the thirty-nine weeks ended November 2, 2024 and October 28, 2023, respectively. The decrease in operating income as a percentage of VB Indirect segment net revenues was due to a decrease in gross margin as a percentage of net revenues as well as SG&A expense deleverage associated with decreased sales.

Previous wording

Pura Vida. For the twenty-six weeks ended August 3, 2024, there was an operating loss in the Pura Vida segment of $(1.1) million, a $6.7 million decrease, or 120.0%, from operating income of $5.6 million in the comparable prior-year period. As a percentage of Pura Vida segment net revenues, operating (loss) income in the Pura Vida segment was (3.8)% and 12.3% for the twenty-six weeks ended August 3, 2024 and July 29, 2023, respectively. The increase in operating loss as a percentage of Pura Vida net revenues was primarily due to SG&A expense deleverage associated with decreased e-commerce and wholesale revenues.

Current wording

Pura Vida. For the thirty-nine weeks ended November 2, 2024, there was an operating loss in the Pura Vida segment of $(3.8) million, a $8.8 million decrease, or 176.7%, from operating income of $5.0 million in the comparable prior-year period. As a percentage of Pura Vida segment net revenues, operating (loss) income in the Pura Vida segment was (9.7)% and 7.9% for the thirty-nine weeks ended November 2, 2024 and October 28, 2023, respectively. The increase in operating loss as a percentage of Pura Vida net revenues was primarily due to SG&A expense deleverage associated with decreased e-commerce and wholesale revenues, an increase in promotional activity, as well as property, plant, and equipment charges of $0.1 million.

Previous wording

Corporate Unallocated. For the twenty-six weeks ended August 3, 2024, unallocated expenses decreased $4.5 million, or 11.9%, to $33.4 million from $37.9 million in the comparable prior-year period. The decrease in unallocated expenses was primarily due to a $5.0 million reduction in employee-related costs, including lower variable compensation, reduced headcount, and decrease in severance charges compared to the prior-year period; as well as a reduction in professional fees of $0.7 million, partially offset by an increase in advertising spend of $1.2 million related to Project Restoration initiatives.

Current wording

Corporate Unallocated. For the thirty-nine weeks ended November 2, 2024, unallocated expenses decreased $5.9 million, or 10.6%, to $49.4 million from $55.3 million in the comparable prior-year period. The decrease in unallocated expenses was primarily due to a $6.3 million reduction in employee-related costs, including lower variable compensation, reduced headcount, and decrease in severance charges compared to the prior-year period, as well as a $0.8 million reduction in professional fees. These decreases were partially offset by an increase in advertising spend of $0.8 million primarily related to Project Restoration initiatives and $0.4 million of net other expenses.

Previous wording

The effective tax rate for the twenty-six weeks ended August 3, 2024, was 68.3%, compared to 29.0% for the twenty-six weeks ended July 29, 2023. The change in year-over-year effective tax rate was primarily due to a change in the projection of the Company's annual income in the current fiscal quarter. The year-over-year effective tax rate also reflects the relative impact of permanent and discrete items in the current-year period compared to the prior-year period, primarily as a result of non-deductible executive compensation. See Note 7 "Income Taxes" of the Notes to the Condensed Consolidated Financial Statements for additional information about the Company's interim provision for income taxes.

Current wording

The effective tax rate for the thirty-nine weeks ended November 2, 2024, was 15.3%, compared to 28.3% for the thirty-nine weeks ended October 28, 2023. The change in year-over-year effective tax rate was primarily due to a change in the projection of the Company's annual income in the current fiscal quarter. The year-over-year effective tax rate also reflects the relative impact of permanent and discrete items in the current-year period compared to the prior-year period, primarily as a result of the impact of foreign operations as well as non-deductible executive compensation. See Note 7 "Income Taxes" of the Notes to the Condensed Consolidated Financial Statements for additional information about the Company's interim provision for income taxes.

Previous wording

For the twenty-six weeks ended August 3, 2024, there was a net loss of $(2.4) million, a $7.0 million decrease, from net income of $4.6 million in the comparable prior-year period due to the factors described in the captions above.

Current wording

For the thirty-nine weeks ended November 2, 2024, there was a net loss of $(15.2) million, a $24.9 million decrease, from net income of $9.7 million in the comparable prior-year period due to the factors described in the captions above.

Previous wording

Net cash used in operating activities for the twenty-six weeks ended August 3, 2024 was $13.2 million compared to net cash provided by operating activities of $16.0 million for the twenty-six weeks ended July 29, 2023. The increase in cash used in operating activities was primarily related to a net loss of $(2.4) million, a $7.0 million decrease, from net income in the comparable prior-year period, a change in non-cash items of $3.8 million, as well as a change in assets and liabilities of $18.3 million.

Current wording

Net cash used in operating activities for the thirty-nine weeks ended November 2, 2024 was $35.8 million compared to net cash provided by operating activities of $21.1 million for the thirty-nine weeks ended October 28, 2023. The increase in cash used in operating activities was primarily related to a net loss of $(15.2) million, a $24.9 million decrease, from net income in the comparable prior-year period, a change in deferred income taxes of $3.3 million, $1.6 million in other non-cash items, partially offset by a $2.2 million impairment charge in the current year period. Additionally, there was a change in assets and liabilities of $29.2 million, primarily driven by an increase in inventory receipts in the current year period.

Previous wording

Net cash used in investing activities was $3.6 million for the twenty-six weeks ended August 3, 2024 compared to $11.7 million for the twenty-six weeks ended July 29, 2023. The decrease in cash used in investing activities was a result of the purchase of the remaining 25% interest in Pura Vida for $10.0 million in the prior year, partially offset by an increase in property, plant, and equipment spending primarily as a result of Vera Bradley relocations in the current year and Project Restoration initiatives.

Current wording

Net cash used in investing activities was $6.1 million for the thirty-nine weeks ended November 2, 2024 compared to $12.5 million for the thirty-nine weeks ended October 28, 2023. The decrease in cash used in investing activities was a result of the purchase of the remaining 25% interest in Pura Vida for $10.0 million in the prior year, partially offset by an increase in property, plant, and equipment spending of $3.5 million primarily as a result of Vera Bradley outlet new store openings in the current year as well as Project Restoration initiatives.

Previous wording

Net cash used in financing activities was $16.4 million for the twenty-six weeks ended August 3, 2024 compared to $2.4 million for the twenty-six weeks ended July 29, 2023. The increase in cash used in financing activities was primarily due to $15.9 million of common stock repurchases in the current-year period compared to $1.4 million in the comparable prior-year period.

Current wording

Net cash used in financing activities was $21.9 million for the thirty-nine weeks ended November 2, 2024 compared to $2.9 million for the thirty-nine weeks ended October 28, 2023. The increase in cash used in financing activities was primarily due to $21.2 million of common stock repurchases in the current-year period compared to $1.9 million in the comparable prior-year period.