Vera Bradley (NASDAQ: VRA) reported Q1 EPS of ($0.09), $0.04 better than the analyst estimate of ($0.13). Revenue for the quarter came in at $96.1 million versus the consensus estimate of $96.62 million.

• First quarter net revenues totaled $96.1 million, in line with guidance
• First quarter net loss on a GAAP basis totaled ($4.0) million, or ($0.11) per diluted share; first quarter net loss on a non-GAAP basis (excluding severance charges) totaled ($3.2) million, or ($0.09) per diluted share
• Company ended the first quarter with a strong cash and investment position of $101.4 million, no debt, and year-over-year inventories down 7.0%

Management reiterates annual guidance

GUIDANCE:

Vera Bradley sees Q2 2018 EPS of $0.40-$0.50, versus the consensus of $0.51. Vera Bradley sees Q2 2018 revenue of $460-480 million, versus the consensus of $470.54 million.

For the second quarter of fiscal 2018, the Company expects:

• Net revenues of $111 million to $115 million compared to prior year second quarter revenues of $119.2 million.
• A gross profit percentage of 57.5% to 58.0% compared to 57.4% in the prior year second quarter. The planned increase reflects expected overhead savings.
• SG&A as a percentage of net revenues of 53.0% to 53.5% compared to 50.6% in the prior year second quarter (48.5% excluding charges). Deleverage is primarily due to expected reduced revenues in the quarter.
• Diluted earnings per share of $0.09 to $0.11, based on diluted weighted-average shares outstanding of 35.9 million and an effective tax rate of 35.6%. Net income totaled $5.1 million, or $0.14 per diluted share, in the prior year second quarter. Excluding charges, net income totaled $6.7 million, or $0.18 per diluted share.
• Inventory of $100 million to $110 million at the end of the second quarter, compared to $96.5 million at the end of last year’s second quarter.
• For fiscal 2018 (which includes a 53rd week), the Company expectations are as follows:
• Net revenues of $460 million to $480 million compared to $485.9 million last year.
• A gross profit percentage of 56.0% to 56.5% compared to 56.8% last year. The planned decline relates to expected increased promotional activity and channel mix changes, partially offset by planned overhead savings.
• SG&A as a percentage of net revenues of 50.8% to 51.3% compared to 51.3% last year. Excluding charges, SG&A as a percentage of net revenues was 48.5% last year. The planned increase, excluding charges, relates to the annualization of new store expenses, additional incentive compensation, and incremental depreciation associated with the new digital flagship. In addition, deleverage is expected due to reduced sales.
• Diluted earnings per share of $0.40 to $0.50, based on diluted weighted-average shares outstanding of 35.8 million and an effective tax rate of 38.0%. Diluted earnings per share totaled $0.53 last year. Excluding charges, diluted earnings per share totaled $0.72 last year.
• Net capital spending of approximately $10 million to $15 million compared to $20.8 million in the prior year.

For earnings history and earnings-related data on Vera Bradley (VRA) click here.