Vera Bradley Inc (NASDAQ:VRA)
VRA is set to report its 2016 first quarter earnings before the market open today, Wednesday June 1, 2016 and the consensus is for earnings of $.05 a share on revenues of 106.75M. Can VRA surprise the street with a blowout quarter or dragged down by its relatively small footprint in the online space?
VRA Technicals
VRA recently filled over a 9 point gap that was formed just one year ago on an earnings report. Since VRA has filled the gap, it has reversed back lower and now only trading slightly in the positive for 2016. Currently, VRA is trading below its 200 day SMA and heavy resistance throughout the $44 level. In the event VRA does post a strong quarter and outlook, it will still have its work cut out to push through all the overhead pressure that lies closely above. A potential fade trade on VRA will lie at the 200 day SMA if it spikes into that level after tomorrow’s report. Keep VRA on your watch list as the volatility and volume will surely make it a candidate for a day trade.
Analyst Expectations
Analysts at Wunderlich Securities had the following comments on VRA.
We are confident in our 1Q EPS of $0.06, a penny above the Street and at the high end of management’s $0.04-$0.06 range. We note other handbag players have reported solid results, driven by improving margins and comps, as the focus for the industry has moved from market share to returns; we believe this shift provides Vera with the ability to capitalize and register solid margins. Company specific, we believe the shift to more non-cotton items continues to resonate, while higher margin focuses at the outlets and online should be key positives.
Expect management to see key positives in 2Q, although we expect it to be conservative with guidance. We note in 2Q, the company will anniversary its decision to shift the online segment from a focus on clearance to that of mirroring the retail stores. This resulted in material declines in online sales, even though margins increased; we look for this key segment to once again return to positive top-line momentum. Further, we believe the company’s shift to less cotton product has continued to gain steam, which should drive solid store results.
About Vera Bradley, Inc.
Vera Bradley, Inc., incorporated on June 23, 2010, is a designer of women’s handbags, accessories, luggage and travel items, eyewear, and stationery and gifts. The Company sells its products through two business segments: Direct and Indirect. The Company offers an assortment of products that meet its customers’ different functional needs, including bags, such as purses, totes and backpacks; accessories, such as wallets, wristlets, phone cases and technology accessories; travel and travel accessories, such as weekend bags, duffel bags and cosmetic bags, and home, such as mugs, tumblers and textiles, including aprons, beach towels, throw blankets and comforters.