0001628280-26-021640
SEC filingVera Bradley, Inc. reported a net loss of $47.8 million for fiscal year 2026, an improvement from a $62.2 million loss in fiscal 2025. Net revenues declined 15.4% year-over-year to $269.7 million, driven by decreases in both the Direct and Indirect segments. The Direct segment saw an 11.6% revenue decline to $227.8 million, while the Indirect segment experienced a 31.5% decline to $41.9 million. Gross profit decreased 21.3% to $125.0 million, with gross margin contracting from 49.8% to 46.4% due to inventory write-downs and lower-margin sales. Operating loss from continuing operations worsened to $31.9 million from $28.8 million in the prior year. The company ended the period with $46.6 million in cash and cash equivalents and had $58.6 million available under its credit facility.
Vera Bradley reported a net loss of $47.8 million for fiscal 2026, representing a 23.1% improvement from the $62.2 million loss in fiscal 2025. The company's net revenues declined 15.4% year-over-year to $269.7 million, continuing a downward trend from $318.8 million in fiscal 2025 and $383.7 million in fiscal 2024. Operating loss from continuing operations worsened to $31.9 million from $28.8 million in the prior year. The company's loss from discontinued operations, primarily related to the sale of Creative Genius (Pura Vida Bracelets), decreased to $15.2 million from $28.8 million in fiscal 2025. Basic and diluted net loss per share attributable to common shareholders was $2.00, compared to $2.23 in the prior year.
Revenue performance was weak across both operating segments. The VB Direct segment, which includes full-line and outlet stores, e-commerce, and direct-to-consumer marketplaces, saw revenues decline 11.6% to $227.8 million. Comparable sales decreased 11.6%, driven by a 20.8% decline in comparable store sales partially offset by a 1.2% increase in e-commerce sales. The VB Indirect segment, comprising wholesale sales to specialty retailers, department stores, and licensing agreements, experienced a more severe 31.5% decline to $41.9 million. This decrease was attributed to reduced specialty and key account orders as well as decreased liquidation sales. The company closed 13 underperforming stores (12 full-line, 1 outlet) and opened 2 full-line stores during the year, ending with 115 total stores.
Gross profit declined 21.3% to $125.0 million, with gross margin contracting from 49.8% to 46.4%. The margin compression was driven by a $5.2 million inventory write-down related to the strategic product shift toward cotton and heritage prints, along with lower-margin sales from inventory originating from prior strategic initiatives. These negative factors were partially offset by improved product margins across channels due to more favorable promotional activity and pricing. Selling, general, and administrative expenses decreased 16.1% to $158.1 million, primarily due to reductions in employee-related expenses ($13.4 million), advertising and selling expenses ($15.6 million), and building-related expenses ($1.9 million). SG&A as a percentage of revenue improved slightly to 58.6% from 59.1%.
Operating cash flow was negative $10.0 million, an improvement from negative $14.1 million in fiscal 2025. The improvement was primarily driven by the reduced net loss and the absence of a $20.4 million valuation allowance against deferred tax assets recorded in the prior year, partially offset by a $15.2 million loss on sale of business. Investing activities used $1.5 million, primarily for property, plant, and equipment purchases. The company ended the period with $46.6 million in cash and cash equivalents, down from $58.5 million at the beginning of the period. Total assets were $234.0 million, with current assets of $119.7 million including $76.0 million in inventories. Total liabilities were $102.4 million, resulting in shareholders' equity of $131.6 million. The company had no debt outstanding under its $75.0 million credit facility and had $58.6 million of availability as of January 31, 2026.
The company is executing Project Sunshine, a comprehensive strategy to strengthen its market position by tapping into the brand's emotional connection with consumers. Management is focusing on simplifying decision-making, removing organizational complexity, and investing in brand, innovation, and customer experiences. The company continues to rationalize its store base and has implemented targeted cost reductions across various areas including retail store efficiencies, marketing expenses, and corporate payroll. Management acknowledges ongoing macroeconomic challenges including inflationary pressures, high interest rates, and their impact on consumer discretionary spending. The company will continue to monitor pricing in relation to macroeconomic trends and review its expense structure for additional cost reduction opportunities.