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Vera Bradley Inc. Chief Executive Jackie Ardrey offered a frank assessment of the economic backdrop Wednesday morning after acknowledging pressures on less affluent spenders seen in the company’s latest earnings report.
“We expect the fourth quarter macroeconomic environment to continue to be unpredictable; the Pura Vida business will continue to be challenging; inflationary pressures will continue to impact Vera Bradley customers with lower household incomes, particularly in the Factory Channel; and there will be continued pressure on gross margin”
The comments from Ardrey, who took over as CEO in November, came in Vera Bradley’s
VRA,
fiscal-third quarter press release, which also showed a drop in sales for the latest quarter as the inflationary landscape continues to impact the business. Vera Bradley reported $124.0 million in consolidated net revenue for the latest quarter, down from $134.7 million a year before, though above the FactSet consensus, which was $119.3 million.
“As in past quarters, we are continuing to experience bifurcation in the spending of our customer base,” Rob Wallstrom, the company’s outgoing CEO, said in a release. He noted that higher-income customers who spend in the company’s full-price channel have been more “engaged,” while lower-income shoppers, notably in the company’s off-price channel, are demonstrating signs of spending pressure that can also be seen in-store traffic.
For the fiscal fourth quarter, executives anticipate $136 million to $141 million in consolidated net revenue. The FactSet consensus was for $136 million in revenue and 23 cents in adjusted EPS.
Shares of the company, which sells quilted bags, among other items, have lost more than half their value so far this year. The S&P 500
SPX,
has declined 17% in that same span.
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