Vera Bradley, Inc. (NASDAQ:VRA) Q2 2020 Earnings Conference Call Transcript
Sep 04, 2019 • 09:30 am ET
Chinese tariffs. During the second quarter, we began a two-year process of re-platforming our enterprise resource planning and other key information systems to become more streamlined, nimble and efficient in our technology and business processes. By the end of this fiscal year, our production exposure in China will drop to less than 25% from approximately 54% last year. Beginning in the fourth quarter of this year, we will begin to see the gross margin benefit of moving production to the Generalized System of Preferences GSP countries.
Number three, ownership. We will continue to reinforce our culture as an ownership-based model, where every associate can drive value creation to their individual and team efforts. And once again, we receive best-in-class engagement scores during our annual associates survey and we continue to have industry leading customer service scores. Both underscore how our culture is a prime asset and one that is key to our long-term growth plans. We also continue to strengthen Vera Bradley's position as a unique lifestyle brand with our second quarter acquisition of a majority interest in Pura Vida Bracelets.
Pura Vida is based in La Jolla, California and is rapidly growing, digitally native, and highly engaging lifestyle brand that deeply resonates with its loyal consumer following. The Pura Vida brand has a differentiated and expanding offering of bracelets, jewelry, and other lifestyle accessories. Vera Bradley and Pura Vida are highly complementary businesses and have many similarities, including devoted, emotionally-connected, and multi-generational customer base; alignment as casual, comfortable, affordable, and fun lifestyle brands; positioning as gifting and socially connected brands and strong entrepreneurial cultures. We will share resources and knowledge to grow our brands together. Pura Vida is a great strategic fit for us due to their strong expertise in branding and social marketing strategies, as well as robust competencies in e-commerce and subscription-model selling. And, Pura Vida has already started to utilize Vera Bradley's infrastructure and back office support capabilities to nurture its growth.
Now I will turn the call over to John to review the financial results and outlook. John?
Thanks, Rob and good morning. Let me go over a few highlights for the quarter. The financial performance for the current year second quarter and six months, I will discuss, our non-GAAP and exclude Pura Vida acquisition related expenses, including transaction costs, inventory step-up amortization, and intangible asset amortization, as well as expenses related to the re-platforming of information technology systems outlined in today's release. The performance includes results for Pura Vida for the stub period, which is July 17 through the end of the quarter.
Second quarter consolidated net revenues totaled $119.8 million for the current year second quarter, which included $5.4 million of net revenues from Pura Vida. Excluding Pura Vida, Vera Bradley net revenues totaled $114.4 million, a 0.7% increase over the $113.6 million in the prior year second quarter. Excluding charges consolidated second quarter net income attributable to Vera Bradley Incorporated totaled $8.7 million or $0.25 per diluted share, which included approximately $0.01