Vera Bradley, Inc. (NASDAQ:VRA) Q3 2020 Earnings Conference Call - Final Transcript

Dec 11, 2019 • 09:30 am ET

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Vera Bradley, Inc. (NASDAQ:VRA) Q3 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. [Operator Instructions] We will now take our first question from Mark Altschwager with Baird. Please go ahead.

Analyst
Mark Altschwager

Thank you. Good morning and congratulations on a solid quarter. With respect to the comp growth, can you break down, I guess, traffic and ticket in AUR? It's -- more broadly, as we think about the low-single digit comp growth this year, how much of that, as a result of some of the pricing actions you've taken, offset tariffs? And how do you expect the complexion of the comp to change as we head into 2020?

Executive
John Enwright

Well, thank you Mark. From the comp standpoint, what we're seeing is improvement in traffic. Overall traffic is up slightly. We're seeing conversion up slightly, we're seeing ADS up slightly. While we're seeing a little bit of negative pressure, again slight, is in AUR. So that from an AUR standpoint we're seeing customer continue to go towards this hands-free movement, smaller items which is driving down the AUR slightly.

As we look forward to next year, what we're planning on is similar type of performance in terms of positive comps across both of our store channels, as well as continuing to lead comps with our e-commerce business is the big driver.

Analyst
Mark Altschwager

Okay. Thank you for that. And with respect to the new customers you're attracting to the brand, what does the average spend look like relative to some of your more mature customers? And I'm curious what categories, if any, they are over-indexing to?

Executive
Robert Wallstrom

In terms of the detail, in terms of the new customer, what we are seeing is the new customer is definitely responding to what we're bringing in, in innovation, whether it's new fabrics, whether it's novelty. So they are definitely coming in with the newness that we're bringing overall into the brand. And obviously, if there joining in, we're going to watch their spend. We kind of need them to anniversary a year to see how their spend goes throughout the holiday season, but we're encouraged by the early signs.

Analyst
Mark Altschwager

Thank you. And then maybe one last one from me just on the tariff front. I guess, if a deal is [Indecipherable] in the coming months, I'm wondering if you could frame-up the various scenario, which we should be thinking about from an earnings perspective next year. I'm just wondering how much of a lift would you see in margins and earnings, all else equal, to the extent that there is a lift, would you think about reinvesting some of that in customer acquisition versus what gets involved [Phonetic] in the bottom line? Obviously, none of us know how this is going to play out in the short run, but just curious how you're thinking about that in the near term.

Executive
John Enwright

Yeah. And Mark, this is John. So from a tariff perspective, right now we're planning for tariffs to be around. But if tariffs were to, excuse me, go away, I think when we think about next year, you won't have an