Vera Bradley (NASDAQ: VRA) reported Q4 EPS of $0.31, $0.08 worse than the analyst estimate of $0.39. Revenue for the quarter came in at $142.37 million versus the consensus estimate of $152.38 million.

Rob Wallstrom, Chief Executive Officer of the Company, noted, “I am proud of how our organization navigated through the last year. Our extraordinary culture has allowed us to not only persevere through the crisis, but it has made us stronger. In spite of an extremely challenging overall retail environment and a very difficult handbag and accessories market in particular, we delivered some best-in-class operating results. On a non-GAAP basis, excluding certain items, our fiscal year operating income was nearly 90% to last year, which was a strong performance in light of the unprecedented pandemic-related headwinds. These results were due to the strength of our two lifestyle brands and strong execution.

“Despite significant sales disruption, we had several financial successes during the year. E-commerce sales comprised nearly half of total Company revenues for the fiscal year; Vera Bradley brand e-commerce sales grew nearly 50% over the prior year. ”

“For the year, we expanded our consolidated gross margin rate primarily through product innovation (cotton masks and product collaborations) and more full-priced selling,” Wallstrom added. “We diligently managed our expenses, and we ended the fiscal year with a solid balance sheet with ample cash and no debt. We are in a strong position to drive growth by continuing to invest in our two brands and to take advantage of additional acquisition opportunities over time.”

GUIDANCE:

Vera Bradley sees FY2022 EPS of $0.80-$0.90, versus the consensus of $0.95. Vera Bradley sees FY2022 revenue of $550-575 million, versus the consensus of $533.39 million.

The uncertainties surrounding the continuing effects of COVID-19 on the retail environment make future financial performance extremely difficult to predict. However, management is providing its estimates for Fiscal 2022 (outlined below) based on current expectations. Management expects store traffic and revenue to improve in the second half of the year as vaccines become more widely available.

All forward-looking guidance numbers referenced below are non-GAAP. The prior year gross profit, SG&A, and earnings per diluted share numbers exclude the previously disclosed net charges related to intangible asset amortization, store impairment charges, Project Novus expenses, cancellation of certain purchase orders related to the pandemic, adjustment to the Pura Vida earn-out liability, and certain department store exit costs related to the pandemic. Current year guidance excludes any similar charges.

For Fiscal 2022, the Company’s expectations are as follows:

• Consolidated net revenues of $550 to $575 million. Net revenues totaled $468.3 million in Fiscal 2021. Year-over-year Pura Vida revenues are expected to grow between 20% and 30%, and Vera Bradley revenues are expected to grow between 15% and 20%.
• Free cash flow of between $50 and $55 million compared to $15.0 million in the prior year.
• A consolidated gross profit percentage of 56.0% to 57.0% compared to 57.0% in Fiscal 2021. The potential rate decline relates to an abatement in mask penetration in Fiscal 2022 coupled with incremental costs for inbound and outbound freight expense.
• Consolidated SG&A expense of $270 to $276 million compared to $233.0 million in Fiscal 2021. The expected SG&A increase is primarily related to Vera Bradley stores being opened for the full year (stores were temporarily closed for between several weeks and several months in Fiscal 2021 due to the pandemic), non-comparable compensation and Cares Act savings in Fiscal 2021, and general variable increases associated with higher sales expectations.
• Consolidated operating income of $44 to $49 million compared to $34.0 million in Fiscal 2021.
• Consolidated diluted EPS of $0.80 to $0.90 based on diluted weighted-average shares outstanding of 34.6 million and an effective tax rate of between 23.0 and 24.0%. Diluted EPS totaled $0.63 last year. Management’s expectation is to generally meet or exceed the Company’s pre-pandemic Fiscal 2020 non-GAAP diluted earnings per share of $0.82.
• Net capital spending of approximately $8 to $10 million compared to $5.7 million in the prior year, reflecting investments associated with new factory locations and technology and logistics enhancements.

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