Bear of the Day: Vera Bradley (VRA) - Bear of the Day
02 Julio 2013 - 3:59AM
Zacks
Vera Bradley (VRA) is a designer, producer, and retailer of
accessories for women. Its products include handbags, accessories
and travel and leisure items.
The company's unique fashion-statement purses
appeal to younger demographics in a price range of $28 to $128.
This design niche seemed very promising with the company's IPO in
October 2010 at $23. But after a quick peak above $50 in the first
half of 2011, it's been all down hill.
![](http://staticzacks.net/images/zacks/blogs/1372715086_scaled_425.jpg)
Drop that Bag
In its June 5 earnings report, the handbag maker
cut forecasts and said its CEO was leaving as inventories were
bulging, soaring 41% from a year earlier. The stock dropped over
10% the next day, bouncing off of $19.50 as investors scooped up
shares and prevented a new 52-week low, which was exactly one-year
ago today at $19.26.
"With wholesale revenues continuing to weaken and
same-store sales flattening out with just 85 stores, top-line
growth continues to come into question," said an analyst from
Sterne Agee.
The CEO switch did not impress analysts either with
CEO Michael Ray's pending departure coming just 5 months after CFO
Jeff Blade left. But it was the guidance which dampened sentiment
the most.
The company announced they expect Q2 EPS of $0.31
to $0.33 on revenues of $123-126 million vs. analyst consensus
expectations of $0.39 on revenues of $136 million.
VRA also lowered its FY14 guidance, seeing EPS of
$1.74-1.78 on revenues of $570-575 million. Analysts were looking
for EPS of $1.81 on revenues of $591 million.
Subsequently, analysts at Piper Jaffray, Wells
Fargo and Baird all cut their ratings and estimates on the stock.
Here's how the forward view of earnings has taken shape over the
past year while VRA has frequently been a Zacks #5 Rank Strong Sell
or #4 Rank Sell.
![](http://staticzacks.net/images/zacks/blogs/1372715163_scaled_425.jpg)
As VRA sits near all-time lows just above $20, some
investors may be looking for a turn-around. But until the earnings
estimate picture changes, it's probably best to wait.
Kevin Cook is a Senior Stock Strategist with
Zacks.com
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VERA BRADLEY (VRA): Free Stock Analysis Report
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