Vera Bradley Q1 Profit Down, Yet Tops Estimates; Sees Q2, FY15 Below View

(RTTNews) - Vera Bradley, Inc. (VRA) Thursday reported a decline in the first-quarter profit on lower sales. Earnings per share beat analysts' expectations, while revenues missed view. The women's accessory retailer forecast second-quarter results below analysts' estimates.

The firm also lowered its revenue and earnings per share outlook for fiscal 2015 below view, citing a significant decline in orders from its specialty gift channel retailers. The shares fell more than 6 percent in the morning trade.

Robert Wallstrom, chief executive officer of the company said, "....we were able to post earnings per share above our guidance due to better than expected gross margin and expense performance. However, we continue to face a difficult environment, one that is proving much more challenging than we anticipated just two short months ago."

For the first quarter ended May 3, 2014, the company posted net income of $6.57 million or $0.16 per share, down from $9.19 million or $0.23 per share in the prior year.

Earnings per share from continuing operations were $0.17, compared to 0.23 per share last year.

On average, ten analysts polled by Thomson Reuters expected the company to report profit per share of $0.13 for the quarter. Analysts' estimates typically exclude special items.

Net revenues for the quarter declined to $113.46 million from $123.03 million in the prior-year quarter. Analysts expected revenue of $118.41 million for the quarter.

The company said sales missed its guidance mainly due to lower-than-expected orders from Indirect specialty retail partners, weaker-than-expected comparable store sales performance in retail stores, and a shortfall at the annual outlet sale.

Direct segment revenues totaled $73.4 million, essentially flat with last year, while Indirect segment revenues fell 18.9 percent to $40.0 million.

Looking ahead, for the second quarter, the company expects earnings per share to be in the range of $0.18 to $0.20, on net revenues of between $113 million and $120 million.

Analysts expect the company to report earnings of $0.30 per share, on revenue of $127.48 million.

For fiscal 2015, the company anticipates earnings per share from continuing operations to be in the range of $1.00 to $1.10. Net revenues are projected to be between $510 million and $530 million.

Earlier, the firm projected fiscal year earnings per share of $1.20 to $1.30 per share, and net revenues to be between $545 million and $565 million.

Analysts expect the company to report fiscal 2015 profit per share of $1.26, on revenue of $553.69 million.

VRA is currently trading at $23.70, down 6.14 percent, on a volume of 1.60 million shares.