Vera Bradley, Inc. (NASDAQ:VRA) Q2 2021 Earnings Conference Call - Final Transcript

Sep 02, 2020 • 09:30 am ET

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Vera Bradley, Inc. (NASDAQ:VRA) Q2 2021 Earnings Conference Call - Final Transcript

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Operator
Operator

Good morning, ladies and gentlemen, thank you for standing by. Welcome to the Vera Bradley Second Quarter Conference Call. [Operator Instructions]

And now, I would like to turn the call over to Mark Dely, Vera Bradley's Chief Administrative Officer. Please go ahead.

Executive
Mark Dely

Good morning and welcome everyone. We'd like to thank you for joining us for Vera Bradley's earnings call. Some of the statements made during our prepared remarks and in response to your questions may constitute forward-looking statements made pursuant to and within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 as amended. Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from those that we expect.

Please refer to today's press release and the Company's most recent Form 10-K filed with the SEC for a discussion of known risks and uncertainties. Investors should not assume that the statements made during the call will remain operative at a later time. We undertake no obligation to update any information discussed on the call.

I will now turn it over to Vera Bradley's CEO, Rob Wallstrom. Rob?

Executive
Robert Wallstrom

Thank you, Mark and good morning, everyone and thank you for joining us on today's call. John Enwright, our CFO also joins me today. I am extremely pleased with our second quarter results which exceeded our expectations and last year's performance despite facing the headwinds of COVID-19. I credit the agility, tenacity, collaboration, ingenuity of our entire team for making these results a reality.

We proved that by focusing on innovation that enhances the customer experience in product, marketing and technology and controlling what we can control, we can drive strong results, produce strong cash flow and position ourselves to emerge a stronger Company. Total Company year-over-year second quarter revenue grew by 10% driven by the addition of Pura Vida for a full quarter and Vera Bradley's e-commerce sales doubling, offset by a decrease in Vera Bradley store revenues due to COVID-19 related store closings for a portion of the quarter. At both Vera Bradley and Pura Vida, customers responded to new product launches and marketing initiatives and sales of cotton masks drove meaningful revenue growth.

We significantly expanded our consolidated gross margin rate in the quarter through sales of cotton masks, product collaborations, careful inventory management and tightly controlled promotional activity. We carefully managed our expenses, achieving expense leverage in the quarter. Our balance sheet remains strong even after paying $30 million on our ABL facility during the quarter, we ended with cash and investments of $77.1 million. On May 5, 2020, we began reopening our Vera Bradley stores in phased approach with 58 out of 82 full-line stores in 64 of 65 factory stores opened by the end of June. All factory stores and all but three full-line stores were opened as of the second quarter end, although with reduced hours, lower staffing levels and greatly enhanced customer capacity and safety protocols.

While