Vera Bradley, Inc. (NASDAQ:VRA) Q2 2020 Earnings Conference Call - Final Transcript

Sep 04, 2019 • 09:30 am ET

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Vera Bradley, Inc. (NASDAQ:VRA) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Analyst
Mark Altschwager

about equal to the full year revenue in calendar '18 you discussed back in June. So I'm wondering, as we update our models, is there any further detail you can provide and how you're thinking about the annualized contribution from Pura Vida and the growth trajectory you're anticipating over the next couple of years?

Executive
John Enwright

Hey, Mark. This is John. So yeah, the back half a year we anticipated it actually to be about $65 million to $70 million, which would basically be 100% of what happened in prior year. The way we're thinking about it, and ultimately, we're not giving guidance for next year. But we do anticipate significant growth year-over-year this year and we'd expect nice growth over the coming next two to three years associated with the brand. So on average, you can think about the brand growing close to 50% this year and we do expect to be a little bit less than I mean, kind of the out years.

Analyst
Mark Altschwager

Thanks for all the detail and best of luck.

Executive
John Enwright

Thanks.

Executive
Robert Wallstrom

Thanks, Mark.

Operator
Operator

Next, we'll move to Oliver Chen with Cowen and Company.

Analyst
Oliver Chen

Hi. Thank you. Regarding the indirect channel, what are you seeing in this channel and what are your thoughts about the distribution footprint and what you expect going forward as it can be a challenging channel that forecast and the inventory management is a little bit different? Thank you.

Executive
Robert Wallstrom

Thanks, Oliver. When you look at our indirect channel, there's obviously a lot of different pieces. So the biggest chunk of that is our indirect specialty channel. So let me talk about that first. First of all, what they're feeling is a little bit of the same pressure I think that we're seeing in department stores, just the general retail environment has been challenging for them. But we're actually encouraged by what we're seeing and what we're hearing from them, that they're giving us very positive feedback in terms of the Vera Bradley performance in their channel, that they're seeing much improvement in terms of full-price sell through, profitability.

So there's definitely a lot of positivity particularly with our best accounts. And we're just working through the challenges that, that channels facing. But overall, we're feeling that, that's an important part of not only our past but our future, so our partnership with the specialty channel, we think continues to be important, but there obviously is a lot of change that goes on there with all the smaller stores, new ones coming in every year, some going out and so it just takes a lot of focus from our team to make sure that we focus in on that channel. So that's one.

The second piece of it is the department store world. The department store world, I think as we've all seen it's been under pressure. I think handbags in particular has been under pressure and the department store world quite often seems to follow a trend. So we're looking at that and making sure