Vera Bradley’s QQ4 2025 results underscore the ongoing transformation under the Project Restoration initiative. Revenue declined versus the prior-year period, with Q4 net revenues of $99.964 million and a non-GAAP gross margin of 45.7%, driven by channel mix and promotional actions. Management highlighted a strategic shift toward higher-value, lower-discounted SKUs, expanded price points, and a disciplined inventory program that reduced year-end inventory by 7% versus the prior year and targeted an additional 10% reduction in fiscal 2026. The company also disclosed a plan to sell the Pura Vida business, signaling a focused portfolio optimization that could materially impact revenue mix and profitability in 2026. In the quarter, the Target Marketplace channel delivered “exceptional results,” validating the firm’s multi-channel strategy and accelerating plans to diversify distribution beyond traditional doors.
From a profitability standpoint, Q4 2025 reflected a significant contraction: non-GAAP gross profit of $45.7 million on $99.964 million revenue, an implied gross margin of 45.7%, and a non-GAAP operating loss of $12.0 million (GAAP) with net income of about negative $46.97 million and basic/diluted loss per share of $1.69. Management’s guidance for fiscal 2026 calls for revenue of about $280 million, gross margin around 52.5%, SG&A around $155 million, an operating loss near $6 million, and a diluted loss per share of about $0.15, with capex about $4 million and end-of-year cash around $40 million. These targets reflect ongoing cost discipline, inventory optimization, and the anticipated benefits of channel diversification and licensing activity, though execution hinges on a persistent weak consumer environment and the successful navigation of the Pura Vida exit. In aggregate, the results and guidance signal a measured path toward long-run profitability, with several near-term catalysts and notable execution risks that investors should monitor.