Brand handbag and fashion accessories for women Vera Bradley (NYSE: VRA) the stock has stumbled this year (-48%). The company was influenced by: inflationary pressure† logistics cost and rising fuel prices bringing revenues into light of taxable profit for the first quarter of 2023. The company suffered a net loss of (-$0.19) in the quarter. Macroeconomic pressures have mainly hit households with incomes below $55,000, while higher-income households spend more than the previous year. The company is still expected to be profitable for the full fiscal year 2023. At $2 cash per share and no long-term debt, Vera Bradley is in value area† Vera Bradley pushed through price increases in the quarter to offset some of the pressure on logistics and supply chains, which should show in the numbers in the second half of the year. the epicenter travel industry recovering quickly and Vera Bradley should be a benefactor of the leisure travel revival. The company is already optimizing for its important back-to-campus season with strategic improvements to its product range. Cautious investors seeking exposure to a potential comeback second half In the retail luggage and accessories segment, look forward to an opportunistic pullback in Vera Bradley shares.
Q1 Fiscal 2023 Profit Release
On June 8, 2022, Vera Bradley released its fiscal first quarter 2023 results for the quarter ended April 2022. The company reported a loss of earnings per share (-$0.19) excluding one-time items versus consensus analyst estimates for a loss of ( -$0.16), a (-$0.03) loss per share. Revenues were down (-9.7%) year-over-year (year-on-year) to $98.50 million, excluding analyst consensus at $109.87 million. Rob Wallstrom, CEO of Vera Bradley, commented: “We are clearly seeing a split in spending from our customer base. At Vera Bradley, revenue from the full line of Direct Channel was higher than last year as customers with higher household income continued to engage and spent more than last year We also saw a healthy year-over-year recovery in indirect channel revenues, but inflationary pressures, including rising gas prices, particularly impacted the spending of full-line clients of household income Vera Bradley under $55,000, as well as on traffic and spend in our Vera Bradley Direct Channel factory stores for the quarter, and Pura Vida’s e-commerce revenue continued to be significantly impacted by the shift in the effectiveness of social and digital media and rising digital media costs For the remainder of the year, we are taking decisive steps to strengthen the business and remain strongly focused on our two core brands.”
Vera Bradley provided downside guidance for fiscal 2023 EPS of $0.35 to $0.50 versus $0.61 consensus analyst estimates. Revenue is expected to be between $490 million and $505 million, versus $564.96 million.
Takeaway for conference calls
CEO Wallstrom acknowledged the weak performance but highlighted the price increases as a step toward reducing logistics and purchasing pressure in addition to driving product innovations. The company completed $10.5 million in share repurchases and maintained a clean debt-free balance sheet. He noticed the split in his customer spending. Higher-income households remained engaged and spent more than last year, but those with incomes less than $55,000 were impacted by rising interest rates, inflation and gas prices. Pure Vida e-commerce is also seeing a significant shift in the effectiveness of digital and social media amid rising costs. While the focus is on strengthening the two core brands, there will be a company-wide cost reduction and efficiency process to realize $15 million to $25 million in annual savings. They are also evolving the business model for Pure Vida from pure e-commerce to omnichannel with a diverse marketing base.
VRA Opportunistic Withdrawal Price Levels
Using the gun cards on the weekly and daily time frames provides an accurate picture of the landscape for VRA stock. Gun Chart Weekly Breakdown Continues Lower Attempted Breakdown Through the $4.39 Fibonacci (fib) level† The weekly stochastic formed a mini inverse pup slip on the 20-band rejection. The weekly 5-period moving average (MA) resistance is down to $5.20, followed by the 15-period MA at $6.21. The weekly lower Bollinger Bands (BBs) are near the $3.82 fib level. The weekly 50-period MA resistance is at $8.43. the weekly market structure layer (MSL) buy triggers on breakout above $5.12. The inverse pup breakdown of the daily gun chart has a descending 5-period MA of $4.66 and a 15-period MA of $4.82. The daily stochastic rejects the 20 band as its bounce attempt is flushed back down. The daily lower BBs sit at $3.25. Opportunistic pullback levels sit at the $3.82 fib level, $3.49 fib, $2.97 fib, $2.59 and the $2.24 fib level. Upward trajectories range from the $6.00 fib level to the $8.38 fib level.