KeyBanc Cuts Price Target on Vera Bradley (VRA) Due to Weaker Margins
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Price: $3.27 -1.8%
Rating Summary:
5 Buy, 10 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
5 Buy, 10 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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KeyBanc is maintaining its Buy rating on shares of Vera Bradley (NASDAQ: VRA), while reducing its price target from $48 to $44 to develop a more conservative view.
The company's gross margins fell 220 bps year over year as the company reported earnings well above expectations. The firm notes the decline was due to the opportunistic sale of retired inventory to third-party liquidators at lower than historical averages. KeyBanc also makes the point VRA's management team continues to struggle with balancing its inventory with demand.
VRA's 17 new stores opened in 2011 are outperforming expectations and management has plans to open an additional 14-20 new stores per year going forward.
An analyst at KeyBanc comments, "VRA continues to refine the product assortment and presentation for the brand. The runway remains long, with an opportunity to go into all 300 Dillard’s (NYSE: DDS) doors some day. In addition to new door growth, Dillard's presents the Company with an opportunity to expand into other categories. Customer response in this channel has been positive. Though there are no new partnership announcements on this front, we continue to believe this channel represents a significant growth opportunity in the future."
For an analyst ratings summary and ratings history on Vera Bradley click here. For more ratings news on Vera Bradley click here.
Shares of Vera Bradley closed at $37.16 yesterday.
The company's gross margins fell 220 bps year over year as the company reported earnings well above expectations. The firm notes the decline was due to the opportunistic sale of retired inventory to third-party liquidators at lower than historical averages. KeyBanc also makes the point VRA's management team continues to struggle with balancing its inventory with demand.
VRA's 17 new stores opened in 2011 are outperforming expectations and management has plans to open an additional 14-20 new stores per year going forward.
An analyst at KeyBanc comments, "VRA continues to refine the product assortment and presentation for the brand. The runway remains long, with an opportunity to go into all 300 Dillard’s (NYSE: DDS) doors some day. In addition to new door growth, Dillard's presents the Company with an opportunity to expand into other categories. Customer response in this channel has been positive. Though there are no new partnership announcements on this front, we continue to believe this channel represents a significant growth opportunity in the future."
For an analyst ratings summary and ratings history on Vera Bradley click here. For more ratings news on Vera Bradley click here.
Shares of Vera Bradley closed at $37.16 yesterday.
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