Vera Bradley Shares Drop as Company Slashes Outlook

Shares of handbag retailer Vera Bradley Inc. dropped sharply Wednesday as the company lowered its full-year outlook after missing its own guidance range for the third quarter.

After forecasting that sales would pick up in the back half the year on the company's second-quarter conference call, Chief Executive Robert Wallstrom said Wednesday that headwinds—particularly in the wholesale channel—will continue to weigh on earnings for the final quarter.

Increased promotional activity and soft demand have continued to weigh on the bottom line of the Fort Wayne, Ind., company, known for its brightly patterned quilted tote bags.

Shares dropped 22% to $11.50 in premarket trading.

On Wednesday, Vera Bradley forecast fourth-quarter earnings of 23 cents to 25 cents a share on revenue of $135 million to $140 million. Analysts surveyed by Thomson Reuters estimated 47 cents a share on $158.8 million.

The company also lowered its current-year forecast to earnings of 62 cents to 65 cents a share on revenue of $486 million to $491 million. In September, the company had forecast earnings of 88 cents to 92 cents on $510 to $515 million in revenue.

Over all for the quarter, Vera Bradley reported a profit of $8.8 million, or 24 cents a share, down from $10.3 million, or 27 cents a share, a year earlier. Excluding certain tax-related charges, the company posted earnings of $7.2 million or 20 cents per share, down from $10.3 or 27 cents last year.

Comparable sales slid for the eighth consecutive quarter by 5.7%, while total sales were flat at $127.7 million.

Analysts polled by Thomson Reuters had forecast earnings of 22 cents on $129.2 million in revenue.

Write to Imani Moise at [e-mail]

(END) Dow Jones Newswires

December 07, 2016 09:45 ET (14:45 GMT)

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