Executive Summary
Vera Bradleyβs QQ3 2025 results reflect a challenging period of strategic transformation under Project Restoration, with a sharp revenue decline year over year and a resulting net loss. Consolidated net revenues totaled $80.6 million, down from $115.0 million in the prior-year quarter, and the company reported a net loss of $12.8 million ($0.46 per share) versus $6.1 million net income last year. Management highlighted meaningful progress on brand repositioning, customer acquisition, and cost discipline, describing several βgreen shootsβ including a 700 basis-point Ipsos awareness increase since 2021, stronger engagement with higher-income households, and improving performance in digital channels and select partnerships. However, gross margin remained under pressure from promotional activity, with non-GAAP gross margin at 54.1% (vs 54.8% a year ago), and SG&A deleveraging on a lower top-line base contributed to an β$10.5 million operating loss for the quarter.
Management reiterated that the strategic shift is ongoing and that the near-term focus remains on reducing low-margin revenue, optimizing inventory and sourcing, and expanding higher-margin initiatives such as heritage prints, elevated price-point offerings, and IP collaborations. The company provided conservative guidance for fiscal 2025, projecting revenue of about $385 million, gross margin around 52.5%, and an operating loss of about $9 million, with an EPS around a $0.25 loss. End-of-year cash is guided to roughly $35 million with inventory down about 5% from the prior year and about 10% lower on a unit basis. The commentary underscored progress in direct-to-consumer, digital spend efficiency, and ongoing discussions with potential brand partners which, if realized, could broaden Vera Bradleyβs addressable market and improve margins over time.
Key Performance Indicators
QoQ: -27.29% | YoY:-29.92%
QoQ: -22.63% | YoY:-30.79%
QoQ: -464.69% | YoY:-254.35%
QoQ: -324.33% | YoY:-350.10%
QoQ: -342.11% | YoY:-370.59%
Key Insights
Revenue: $80.6m (Q3 2025) vs $115.0m prior year (YoY -29.9%); Gross margin: 54.1% vs 54.8% prior year (Ξ -0.7pp); Operating loss: -$10.474m (-13.0% of net revenues) vs prior year operating income +$8.0m; Net income: -$12.8m (EPS -$0.46) vs +$6.1m (EPS +$0.19); YoY and QoQ metrics show meaningful deterioration in top line and profitability, with some margin resilience in Vera Bradley Direct (80 bps expansion cited) despite overall gross margin pressure. Cash flow: Operating cash flow -$22.6m; Fr...
Financial Highlights
Revenue: $80.6m (Q3 2025) vs $115.0m prior year (YoY -29.9%); Gross margin: 54.1% vs 54.8% prior year (Ξ -0.7pp); Operating loss: -$10.474m (-13.0% of net revenues) vs prior year operating income +$8.0m; Net income: -$12.8m (EPS -$0.46) vs +$6.1m (EPS +$0.19); YoY and QoQ metrics show meaningful deterioration in top line and profitability, with some margin resilience in Vera Bradley Direct (80 bps expansion cited) despite overall gross margin pressure. Cash flow: Operating cash flow -$22.6m; Free cash flow -$25.0m; Ending cash $13.7m; End-of-quarter inventory $131.3m; Total debt $95.1m; Net debt $81.4m; No borrowings on the $75m ABL facility at quarter end.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
80.58M |
-29.92% |
-27.29% |
| Gross Profit |
43.61M |
-30.79% |
-22.63% |
| Operating Income |
-10.47M |
-254.35% |
-464.69% |
| Net Income |
-12.80M |
-350.10% |
-324.33% |
| EPS |
-0.46 |
-370.59% |
-342.11% |
Key Financial Ratios
operatingProfitMargin
-13%
operatingCashFlowPerShare
$-0.81
freeCashFlowPerShare
$-0.89
Management Commentary
Key management themes from the QQ3 2025 earnings call include: (1) Project Restoration progress with a shift toward attracting a younger, more affluent customer and reducing discounting. Jackie Ardrey stressed that customer acquisition is happening at lower discounts, signaling improving price architecture and brand resonance. (2) Green shoots in brand health and reach: Ipsos data shows a 700 bps awareness increase since 2021, accompanied by gains in target demographics (35β54 years old up 9 percentage points) and higher-income customer acquisition (+7 points). (3) Channel mix and cost discipline: e-commerce is outperforming stores, online outlet is strong, and the team is pursuing lower discounts across channels. However, branded channel traffic/conversion challenges persist, and liquidation/promotion pressure remains a near-term headwind. (4) Product and partnerships as growth accelerants: heritage prints, giftable items under $50, and IP-based collaborations (Wicked, Disney) are being leveraged to expand reach and drive higher-margin revenue, with ongoing discussions for additional collaborations. (5) Pura Vida performance and cost considerations: Disney Springs store success is a bright spot, but rising digital marketing costs continue to pressure margins in the segment. (6) Inventory and sourcing discipline: tighter SKU management and improved procurement are expected to yield better product flow and profitability over time. (7) Financial guidance and cash runway: management remains committed to disciplined inventory management and cost controls, with guidance implying continued cash usage in the near term but an anticipated improvement in profitability as the transformation gains traction.
"the customer acquisition is happening at lower discount levels. So that's the key here."
β Jackie Ardrey
"we are getting inbound interest from other brands, which was not the case for us... a green shoot that we are really working internally."
β Jackie Ardrey
Forward Guidance
Management provided conservative full-year fiscal 2025 guidance: consolidated net revenues β$385 million (mid-teen percentage decline vs. the prior year), gross margin β52.5%, SG&A β$213 million, resulting in an operating loss β$9 million and EPS β$(0.25). Capex β$13 million (investments in new/remodeled stores, technology, and logistics). End-of-year cash β$35 million, and year-end inventory β5% lower than last year (unit quantity β10% lower). These targets assume continued headwinds from macro consumer spending and a gradual payoff from Project Restoration. Investors should monitor: (a) pace and sustainability of brand awareness and new customer acquisition at lower discounts, (b) trajectory of online and outlet channel profitability relative to branded stores, (c) execution of inventory optimization and procurement improvements, and (d) the timing and scope of additional brand partnerships or licensing deals that could broaden the customer base and improve margins. The companyβs ability to translate brand equity gains into durable profit improvements remains the key variable for the outlook.