Pura Vida acquisition boosts Vera Bradley sales but saps bottom line
Vera Bradley, Inc.’s recently acquired jewelry brand Pura Vida contributed $5.4 million in sales to its new parent company’s revenues in the second quarter, while charges related to its purchase ate into the Fort Wayne, Indiana-based accessories group’s income.
Vera Bradley’s consolidated net revenues for the second quarter ended August 3, 2019, totaled $119.8 million, up 5.5% from the $113.6 million reported by the company in the prior-year period.
Excluding sales from Pura Vida, which was acquired by Vera Bradley in July, the company’s net revenues were $114.4 million, representing a 0.7% increase compared to the previous year’s Q2. Comparable sales rose 2.1%.
Direct segment revenues at the Vera Bradley brand were $94.4 million, a 3.7% increase from $91.0 million, while the segment’s comparable sales rose 2.1%.
The brand’s indirect segment fared less well, posting an 11.4% decrease in revenues, which totaled $20.0 million, compared to $22.6 million.
“Vera Bradley’s comparable sales, full-price selling, and customer count were once again up in the quarter, and we successfully managed our expenses,” said Vera Bradley CEO Rob Wallstrom in a release. “However, retail remains challenging, particularly in the Indirect channel as our partners continue to feel the pressure of a difficult environment, and our total sales fell slightly below our expectations. In addition, gross margins continue to be pressured by increasing tariffs and higher shipping costs.”
Total company net income came to $5.9 million, or $0.17 per diluted share, in the quarter, down from $9.3 million, or $0.26 per diluted share, in the prior-year period. The decline reflects the negative impact of $2.3 million in expenses related to the acquisition of Pura Vida, as well as charges of $0.5 million incurred through the re-platforming of Vera Bradley’s IT systems.
The company’s net revenues for the first six months of the fiscal year totaled $210.8 million, or $205.4 million disregarding the contribution of Pura Vida, up from $200.2 million in the first half of the previous year. Comparable sales rose 3.3% in the period.
Year to date, Vera Bradley’s consolidated net income came to $3.4 million, or $0.10 per diluted share, falling from $7.9 million, or $0.22 per diluted share, in the same period in the previous year.
In the third quarter, the company expects to see net revenues of between $122 and $129 million, including a contribution of $23 to $25 million from Pura Vida, while full-year revenues are expected to be in the range of $490 to $505 million.
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