Vera Bradley, Inc. (NASDAQ:VRA) reported mixed fourth-quarter results on Thursday, with revenue coming in above analyst forecasts while earnings fell short of expectations.
The company’s shares climbed 9.64% in premarket trading following the release, as investors appeared encouraged by signs that the business may be stabilizing.
The handbag and accessories retailer posted an adjusted loss of $0.19 per share for the fourth quarter, missing the analyst consensus estimate of a $0.01 per share profit. However, revenue totaled $84.9 million, exceeding expectations of $77.3 million and declining only 1.7% from $86.4 million recorded in the same quarter a year earlier.
On a GAAP basis, the company returned to profitability, reporting net income from continuing operations of $2.7 million, or $0.09 per diluted share, compared with a net loss of $20.0 million, or -$0.72 per diluted share, in the fourth quarter of the previous year.
“We are pleased to report that our fourth quarter results reflect meaningful progress in our transformation journey,” said Ian Bickley, who was recently appointed Chairman and Chief Executive Officer. “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.”
Revenue from the Direct segment reached $74.5 million, down 2.6% from $76.5 million in the fourth quarter of the prior year.
Comparable sales declined 0.7%, reflecting lower traffic and conversion rates in outlet stores, partly offset by stronger ecommerce sales. Meanwhile, revenue from the Indirect segment increased 4.9% to $10.4 million from $9.9 million, driven by a major wholesale collaboration launched in the spring.
Consolidated gross margin improved to 47.8% of net revenue, up from 45.9% a year earlier, supported by reduced promotional activity in the outlet channel and lower freight costs.
Adjusted selling, general and administrative expenses fell to $37.3 million, representing 43.9% of net revenue, compared with $47.9 million, or 55.4% of net revenue, in the prior year.
Looking ahead to fiscal 2027, Vera Bradley expects revenue to range between $255 million and $270 million. The midpoint of $262.5 million would represent a slight decline compared with fiscal 2026 revenue of $269.7 million. The company also expects its operating loss to improve by at least 40% from the previous year’s loss of $21.7 million.