10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 ___________________________ 

FORM 10-Q

___________________________ 

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended July 29, 2023

OR

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From                      to                     

Commission File Number: 001-34918

___________________________ 

VERA BRADLEY, INC.

(Exact name of registrant as specified in its charter)

 ___________________________ 

 

Indiana	27-2935063
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
12420 Stonebridge Road, Roanoke, Indiana	46783
(Address of principal executive offices)	(Zip Code)

(877) 708-8372

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

 ___________________________ 

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, without par value	VRA	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  x

The registrant had 30,822,993 shares of its common stock outstanding as of August 30, 2023.

TABLE OF CONTENTS

 

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of July 29, 2023, and January 28, 2023	4
	Condensed Consolidated Statements of Operations for the Thirteen and Twenty-Six Weeks Ended July 29, 2023, and July 30, 2022	5
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Thirteen and Twenty-Six Weeks Ended July 29, 2023, and July 30, 2022	6
	Condensed Consolidated Statements of Shareholders' Equity for the Thirteen and Twenty-Six Weeks Ended July 29, 2023, and July 30, 2022	7
	Condensed Consolidated Statements of Cash Flows for the Twenty-Six Weeks Ended July 29, 2023, and July 30, 2022	9
	Notes to the Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	39
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 5.	Other Information	41
Item 6.	Exhibits	42

2

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical or current fact included in this report are forward-looking statements. Forward-looking statements include references to our current expectations and projections relating to our financial condition, results of operations, plans, objectives, strategies, future performance, and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “might,” “will,” “should,” “can have,” and “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. For example, all statements we make relating to our estimated and projected earnings, revenues, costs, expenditures, cash flows, growth rates, and financial results, our plans and objectives for future operations, growth, initiatives, or strategies, or the expected outcome or impact of pending or threatened litigation are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including:

•possible inability to successfully implement our long-term strategic plans, including Project Restoration;

•possible declines in our comparable sales;

•possible inability to maintain and enhance our brands;

•possible failure of our multi-channel distribution model;

•possible adverse changes in general economic conditions and their impact on consumer confidence and consumer spending, including political unrest, social unrest, acts of war and terrorism, and other related matters;

•possible inability to predict and respond in a timely manner to changes in consumer demand;

•possible inability to successfully open new stores and/or operate current stores as planned;

•possible loss of key management or design associates or inability to attract and retain the talent required for our business;

•possible data security or privacy breaches or disruptions in our computer systems or websites;

•possible disruptions in our supply chain;

•possible new or increased tariffs on our products and increases in inbound and outbound freight expense that could lead to increased product costs and lower profit margins; and

•public health pandemics and actions by governmental or other actors regarding containment.

We derive many of our forward-looking statements from our operating plans and forecasts, which are based upon detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results.

For a discussion of the above described risks and uncertainties and other risks and uncertainties that could cause actual results to differ materially from those contained in our forward-looking statements, please refer to “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 28, 2023, as well as in Item 1A herein.

We caution you that the risks and uncertainties identified by us may not be all of the factors that are important to you. Furthermore, the forward-looking statements included in this report are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.

3

PART I. FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

Vera Bradley, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

	July 29, 2023		January 28, 2023
Assets
Current assets:
Cash and cash equivalents	$	48,522	$	46,595
Accounts receivable, net	23,944		22,105
Inventories	139,301		142,275
Income taxes receivable	2,180		1,311
Prepaid expenses and other current assets	14,625		14,276
Total current assets	228,572		226,562
Operating right-of-use assets	69,932		77,954
Property, plant, and equipment, net	56,127		58,674
Intangible assets, net	14,460		15,918
Deferred income taxes	20,014		21,542
Other assets	2,395		3,851
Total assets	$	391,500	$	404,501
Liabilities, Redeemable Noncontrolling Interest, and Shareholders’ Equity
Current liabilities:
Accounts payable	$	21,605	$	20,350
Accrued employment costs	12,965		14,312
Short-term operating lease liabilities	19,587		19,714
Other accrued liabilities	13,496		12,723
Income taxes payable	528		558
Total current liabilities	68,181		67,657
Long-term operating lease liabilities	66,718		74,664
Other long-term liabilities	82		90
Total liabilities	134,981		142,411
Commitments and contingencies
Redeemable noncontrolling interest	—		10,712
Shareholders’ equity:
Preferred stock; 5,000 shares authorized, no shares issued or outstanding	—		—
Common stock, without par value; 200,000 shares authorized, 43,176 and 42,846 shares issued and 30,848 and 30,766 shares outstanding, respectively	—		—
Additional paid-in-capital	111,663		109,718
Retained earnings	279,204		274,629
Accumulated other comprehensive loss	(69)		(105)
Treasury stock	(134,279)		(132,864)
Total shareholders’ equity of Vera Bradley, Inc.	256,519		251,378
Total liabilities, redeemable noncontrolling interest, and shareholders’ equity	$	391,500	$	404,501

The accompanying notes are an integral part of these financial statements.

4

Vera Bradley, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

 

	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Net revenues	$	128,172	$	130,371	$	222,534	$	228,830
Cost of sales	56,156		69,854		98,769		115,799
Gross profit	72,016		60,517		123,765		113,031
Selling, general, and administrative expenses	59,405		74,042		117,911		134,956
Impairment of goodwill and intangible assets	—		29,338		—		29,338
Other income, net	260		42		631		209
Operating income (loss)	12,871		(42,821)		6,485		(51,054)
Interest expense, net	12		36		44		76
Income (loss) before income taxes	12,859		(42,857)		6,441		(51,130)
Income tax expense (benefit)	3,605		(5,956)		1,866		(7,519)
Net income (loss)	9,254		(36,901)		4,575		(43,611)
Less: Net loss attributable to redeemable noncontrolling interest	—		(7,134)		—		(6,870)
Net income (loss) attributable to Vera Bradley, Inc.	$	9,254	$	(29,767)	$	4,575	$	(36,741)
Basic weighted-average shares outstanding	30,901		31,429		30,847		32,051
Diluted weighted-average shares outstanding	31,139		31,429		31,208		32,051
Basic net income (loss) per share available to Vera Bradley, Inc. common shareholders	$	0.30	$	(0.95)	$	0.15	$	(1.15)
Diluted net income (loss) per share available to Vera Bradley, Inc. common shareholders	$	0.30	$	(0.95)	$	0.15	$	(1.15)

The accompanying notes are an integral part of these financial statements.

5

Vera Bradley, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

(unaudited)

 

	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Net income (loss)	$	9,254	$	(36,901)	$	4,575	$	(43,611)
Cumulative translation adjustment	46		(75)		36		(106)
Comprehensive income (loss), net of tax	9,300		(36,976)		4,611		(43,717)
Less: Comprehensive loss attributable to redeemable noncontrolling interest	—		(7,134)		—		(6,870)
Comprehensive income (loss) attributable to Vera Bradley, Inc.	$	9,300	$	(29,842)	$	4,611	$	(36,847)

The accompanying notes are an integral part of these financial statements.

6

Vera Bradley, Inc.

Condensed Consolidated Statements of Shareholders’ Equity

(in thousands, except share data)

(unaudited)

	Number of Shares
	Common Stock	Treasury Stock	Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Shareholders’ Equity of Vera Bradley, Inc.
Balance at January 28, 2023	30,766,024	12,079,690	$	109,718	$	274,629	$	(105)	$	(132,864)	$	251,378
Net loss attributable to Vera Bradley, Inc.	—	—	—		(4,679)		—		—		(4,679)
Translation adjustments	—	—	—		—		(10)		—		(10)
Restricted shares vested, net of repurchase for taxes	330,500	—	(942)		—		—		—		(942)
Stock-based compensation	—	—	691		—		—		—		691
Treasury stock purchased	(128,100)	128,100	—		—		—		(732)		(732)
Purchase of noncontrolling interest equity adjustment	—	—	1,286		—		—		—		1,286
Balance at April 29, 2023	30,968,424	12,207,790	$	110,753	$	269,950	$	(115)	$	(133,596)	$	246,992
Net income attributable to Vera Bradley, Inc.	—	—	—		9,254		—		—		9,254
Translation adjustments	—	—	—		—		46		—		46
Restricted shares vested, net of repurchase for taxes	89	—	—		—		—		—		—
Stock-based compensation	—	—	910		—		—		—		910
Treasury stock purchased	(120,220)	120,220	—		—		—		(683)		(683)
Balance at July 29, 2023	30,848,293	12,328,010	$	111,663	$	279,204	$	(69)	$	(134,279)	$	256,519

7

Vera Bradley, Inc.

Condensed Consolidated Statements of Shareholders’ Equity

(in thousands, except share data)

(continued)

(unaudited)

	Number of Shares
	Common Stock	Treasury Stock	Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Shareholders’ Equity of Vera Bradley, Inc.
Balance at January 29, 2022	33,170,430	9,258,741	$	107,907	$	334,364	$	(29)	$	(114,802)	$	327,440
Net loss attributable to Vera Bradley, Inc.	—	—	—		(6,974)		—		—		(6,974)
Translation adjustments	—	—	—		—		(31)		—		(31)
Restricted shares vested, net of repurchase for taxes	404,469	—	(1,410)		—		—		—		(1,410)
Stock-based compensation	—	—	543		—		—		—		543
Treasury stock purchased	(1,423,096)	1,423,096	—		—		—		(10,454)		(10,454)
Balance at April 30, 2022	32,151,803	10,681,837	$	107,040	$	327,390	$	(60)	$	(125,256)	$	309,114
Net loss attributable to Vera Bradley, Inc.	—	—	—		(29,767)		—		—		(29,767)
Translation adjustments	—	—	—		—		(75)		—		(75)
Restricted shares vested, net of repurchase for taxes	89	—	—		—		—		—		—
Stock-based compensation	—	—	901		—		—		—		901
Treasury stock purchased	(986,023)	986,023	—		—		—		(6,023)		(6,023)
Balance at July 30, 2022	31,165,869	11,667,860	$	107,941	$	297,623	$	(135)	$	(131,279)	$	274,150

The accompanying notes are an integral part of these financial statements.

8

Vera Bradley, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

	Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022
Cash flows from operating activities
Net income (loss)	$	4,575	$	(43,611)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation of property, plant, and equipment	4,070		4,371
Amortization of operating right-of-use assets	10,501		10,621
Goodwill and intangible asset impairment	—		29,338
Other impairment charges	—		1,351
Amortization of intangible assets	1,458		1,537
Provision for doubtful accounts	17		(119)
Stock-based compensation	1,601		1,444
Deferred income taxes	2,102		(5,419)
Other non-cash loss, net	40		—
Changes in assets and liabilities:
Accounts receivable	(1,856)		(4,793)
Inventories	2,974		(34,676)
Prepaid expenses and other assets	1,107		348
Accounts payable	1,403		12,759
Income taxes	(899)		4,652
Operating lease liabilities, net	(10,552)		(12,910)
Accrued and other liabilities	(566)		7,989
Net cash provided by (used in) operating activities	15,975		(27,118)
Cash flows from investing activities
Purchases of property, plant, and equipment	(1,727)		(4,391)
Cash paid for business acquisition	(10,000)		—
Net cash used in investing activities	(11,727)		(4,391)
Cash flows from financing activities
Tax withholdings for equity compensation	(942)		(1,410)
Repurchase of common stock	(1,415)		(16,477)
Distributions to redeemable noncontrolling interest	—		(613)
Net cash used in financing activities	(2,357)		(18,500)
Effect of exchange rate changes on cash and cash equivalents	36		(106)
Net increase (decrease) in cash and cash equivalents	1,927		(50,115)
Cash and cash equivalents, beginning of period	46,595		88,436
Cash and cash equivalents, end of period	$	48,522	$	38,321

9

Vera Bradley, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(continued)

(unaudited)

	Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022
Supplemental disclosure of cash flow information
Cash paid (received) for income taxes, net	$	662	$	(6,755)
Supplemental disclosure of non-cash activity
Non-cash operating, investing, and financing activities
Purchases of property, plant, and equipment
Expenditures incurred but not yet paid as of July 29, 2023 and July 30, 2022	$	199	$	1,353
Expenditures incurred but not yet paid as of January 28, 2023 and January 29, 2022	$	363	$	250

Refer to Note 3 herein for supplemental cash flow information regarding the Company’s leases.

The accompanying notes are an integral part of these financial statements.

10

Vera Bradley, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

1.Description of the Company and Basis of Presentation

The term “Company” refers to Vera Bradley, Inc. and its wholly owned subsidiaries, except where the context requires otherwise or where otherwise indicated.

Vera Bradley, Inc. operates two unique lifestyle brands – Vera Bradley and Pura Vida. We believe Vera Bradley and Pura Vida are complementary businesses, both with devoted, emotionally-connected, and multi-generational female customer bases; alignment as causal, comfortable, affordable, and fun brands; positioning as “gifting” and socially-connected brands; strong, entrepreneurial cultures; a keen focus on community, charity, and social consciousness; multi-channel distribution strategies; and talented leadership teams aligned and committed to the long-term success of their brands.

Vera Bradley is a leading designer of women’s handbags, luggage and travel items, fashion and home accessories, and unique gifts. Founded in 1982 by friends Barbara Bradley Baekgaard and Patricia R. Miller, the brand’s innovative designs, iconic patterns, and brilliant colors continue to inspire and connect women.

In July 2019, Vera Bradley, Inc. acquired a 75% interest in Creative Genius, Inc., which also operates under the name Pura Vida Bracelets (“Pura Vida”). On January 30, 2023, the Company purchased the remaining 25% interest in Pura Vida. Pura Vida, based in La Jolla, California, is a digitally native lifestyle brand that we believe deeply resonates with its loyal consumer following. The Pura Vida brand has a differentiated and expanding offering of bracelets, jewelry, and other lifestyle accessories.

The Company has three reportable segments: Vera Bradley Direct (“VB Direct”), Vera Bradley Indirect (“VB Indirect”), and Pura Vida.

•The VB Direct business consists of sales of Vera Bradley products through Vera Bradley full-line and factory outlet stores in the United States; verabradley.com; the Vera Bradley online outlet site; and the Vera Bradley annual outlet sale in Fort Wayne, Indiana. As of July 29, 2023, the Company operated 45 full-line stores and 80 factory outlet stores. In light of the COVID-19 pandemic, the Company cancelled its calendar year 2022 annual outlet sale. The sale resumed in June 2023.

•The VB Indirect business consists of sales of Vera Bradley products to approximately 1,700 specialty retail locations, substantially all of which are located in the United States, as well as department stores, national accounts, third-party e-commerce sites, third-party inventory liquidators, and royalties recognized through licensing agreements related to the Vera Bradley brand.

•The Pura Vida segment represents revenues generated through the Pura Vida websites, www.puravidabracelets.com, puravidabracelets.ca, and www.puravidabracelets.eu; through the distribution of Pura Vida-branded products to wholesale retailers, substantially all of which are located in the United States; and through its five retail stores.

The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as permitted by such rules and regulations. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2023, filed with the SEC.

The interim financial statements reflect all adjustments that are, in the opinion of management, necessary to present fairly the results for the interim periods presented. All such adjustments are of a normal, recurring nature. The results of operations for the thirteen and twenty-six weeks ended July 29, 2023, are not necessarily indicative of the results to be expected for the full fiscal year due to, in part, seasonal fluctuations in the business and the uncertainty of macroeconomic factors on future periods, including inflation and other related matters.

11

Vera Bradley, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, including Pura Vida. The Company has eliminated intercompany balances and transactions in consolidation. In the prior year, Pura Vida was a majority owned subsidiary and was included in the consolidated financial statements of the Company. Refer to Notes 4 and 12 herein for additional information.

Fiscal Periods

The Company’s fiscal year ends on the Saturday closest to January 31. References to the fiscal quarters ended July 29, 2023 and July 30, 2022 refer to the thirteen week periods ended on those dates.

Recently Issued Accounting Pronouncements

There were no new accounting pronouncements issued or which became effective during the thirteen and twenty-six weeks ended July 29, 2023, which had, or are expected to have, a significant impact on the Company's Consolidated Financial Statements.

2.Revenue from Contracts with Customers

Disaggregation of Revenue

The following presents the Company's net revenues disaggregated by product category for the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022 (in thousands):

	Thirteen Weeks Ended
	July 29, 2023
	VB Direct Segment			VB Indirect Segment			Pura Vida Segment			Total
Product categories
Bags	$	35,396		$	9,628		$	176		$	45,200
Travel	19,960			3,479			—			23,439
Accessories	15,140			1,987			23,672			40,799
Home	9,138			953			—			10,091
Apparel/Footwear	4,043			323			470			4,836
Other	2,025		(1)	993		(2)	789		(3)	3,807
Total net revenues	$	85,702	(4)	$	17,363	(5)	$	25,107	(4)	$	128,172
(1) Primarily includes net revenues from stationery, freight, and gift card breakage.
(2) Primarily includes net revenues from licensing agreements and freight.
(3) Related to freight.
(4) Net revenues were related to product sales recognized at a point in time.
(5) $16.7 million of net revenues related to product sales recognized at a point in time and $0.7 million of net revenues related to sales-based royalties recognized over time.

12

Vera Bradley, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

	Thirteen Weeks Ended
	July 30, 2022
	VB Direct Segment			VB Indirect Segment			Pura Vida Segment			Total
Product categories
Bags	$	38,373		$	9,603		$	779		$	48,755
Travel	20,071			3,033			—			23,104
Accessories	15,757			2,636			23,269			41,662
Home	8,726			732			—			9,458
Apparel/Footwear(6)	2,161			360			1,359			3,880
Other	1,925		(1)	961		(2)	626		(3)	3,512
Total net revenues	$	87,013	(4)	$	17,325	(5)	$	26,033	(4)	$	130,371
(1) Primarily includes net revenues from stationery, freight, and gift card breakage.
(2) Primarily includes net revenues from licensing agreements and freight.
(3) Related to freight.
(4) Net revenues were related to product sales recognized at a point in time.
(5) $16.6 million of net revenues related to product sales recognized at a point in time and $0.7 million of net revenues related to sales-based royalties recognized over time.
(6) Includes mask sales.

	Twenty-Six Weeks Ended
	July 29, 2023
	VB Direct Segment			VB Indirect Segment			Pura Vida Segment			Total
Product categories
Bags	$	58,297		$	17,956		$	237		$	76,490
Travel	35,366			6,658			—			42,024
Accessories	25,634			3,945			42,683			72,262
Home	15,066			1,541			—			16,607
Apparel/Footwear	6,990			784			760			8,534
Other	3,254		(1)	1,852		(2)	1,511		(3)	6,617
Total net revenues	$	144,607	(4)	$	32,736	(5)	$	45,191	(4)	$	222,534
(1) Primarily includes net revenues from stationery, freight, and gift card breakage.
(2) Primarily includes net revenues from licensing agreements and freight.
(3) Related to freight.
(4) Net revenues were related to product sales recognized at a point in time.
(5) $31.3 million of net revenues related to product sales recognized at a point in time and $1.4 million of net revenues related to sales-based royalties recognized over time.

13

Vera Bradley, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

	Twenty-Six Weeks Ended
	July 30, 2022
	VB Direct Segment			VB Indirect Segment			Pura Vida Segment			Total
Product categories
Bags	$	64,505		$	19,054		$	842		$	84,401
Travel	35,159			6,106			—			41,265
Accessories	27,256			4,404			42,129			73,789
Home	14,448			1,858			—			16,306
Apparel/Footwear(6)	4,064			860			1,795			6,719
Other	3,217		(1)	2,020		(2)	1,113		(3)	6,350
Total net revenues	$	148,649	(4)	$	34,302	(5)	$	45,879	(4)	$	228,830
(1) Primarily includes net revenues from stationery, freight, and gift card breakage.
(2) Primarily includes net revenues from licensing agreements and freight.
(3) Related to freight.
(4) Net revenues were related to product sales recognized at a point in time.
(5) $32.8 million of net revenues related to product sales recognized at a point in time and $1.5 million of net revenues related to sales-based royalties recognized over time.
(6) Includes mask sales.

Contract Balances

Contract liabilities as of July 29, 2023 and January 28, 2023, were $2.5 million and $3.2 million, respectively. The balance as of July 29, 2023 and January 28, 2023 consisted of unredeemed gift cards, unearned revenue related to the monthly bracelet and jewelry clubs of the Pura Vida segment, Pura Vida loyalty club points, and Pura Vida customer deposits and payments collected before shipment. These contract liabilities are recognized within other accrued liabilities on the Company’s Condensed Consolidated Balance Sheets. Substantially all contract liabilities are recognized within one year. The Company did not have contract assets as of July 29, 2023 and January 28, 2023.

The balance for accounts receivable from contracts with customers, net of allowances, as of July 29, 2023 and January 28, 2023, was $23.4 million and $20.7 million, respectively, which is recognized within accounts receivable, net, on the Company’s Condensed Consolidated Balance Sheets. The provision for doubtful accounts was $0.8 million as of July 29, 2023 and January 28, 2023. The provision for doubtful accounts is based upon the likelihood of default expected during the life of the receivable.

Performance Obligations

The performance obligations for the VB Direct, VB Indirect, and Pura Vida segments include the promise to transfer distinct goods (or a bundle of distinct goods). The VB Indirect segment also includes the right to access intellectual property (“IP”) related to the Vera Bradley brand.

Remaining Performance Obligations

The Company does not have remaining performance obligations in excess of one year or contracts that it does not have the right to invoice as of July 29, 2023.

3.Leases

Discount Rate

The weighted-average discount rate as of July 29, 2023, and July 30, 2022 was 4.7% and 4.6%, respectively. The discount rate is not readily determinable in the lease; therefore, the Company estimated the incremental borrowing

14

Vera Bradley, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

rate, at the commencement date of each lease, which is the rate of interest it would have to borrow on a collateralized basis over a similar term with similar payments.

Leases Not Yet Commenced

As of July 29, 2023, the Company had one Vera Bradley retail store lease which was executed, but it did not have control of the underlying asset; therefore, the lease liability and right-of-use asset are not recorded on the Condensed Consolidated Balance Sheet. This lease contains undiscounted lease payments, which will be included in the determination of the lease liability, totaling approximately $2.4 million and has a term of approximately 10 years commencing in fiscal year 2024.

Amounts Recognized in the Condensed Consolidated Financial Statements

The following lease expense is recorded within cost of sales for the Asia sourcing office and certain equipment leases and within selling, general, and administrative expenses for all other leases, including retail store leases, in the Company's Condensed Consolidated Statement of Operations for the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022 (in thousands):

	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Operating lease cost	$	6,502	$	6,114	$	13,067	$	12,364
Variable lease cost	1,401		1,564		2,757		2,982
Short-term lease cost	233		102		355		316
Less: Sublease income (1)	(105)		(24)		(210)		(24)
Total net lease cost	$	8,031	$	7,756	$	15,969	$	15,638
(1) Related to the sublease of a former Company location.

The weighted-average remaining lease term as of July 29, 2023 and July 30, 2022 was 5.4 years.

Supplemental operating cash flow information was as follows (in thousands):

	Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022
Cash paid for amounts included in the measurement of operating lease liabilities	$	14,803	$	14,910
Right-of-use assets increase as a result of new and modified operating lease liabilities, net	$	2,499	$	17,225

15

Vera Bradley, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

4.Earnings Per Share

Basic earnings per share is computed based on the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed based on the weighted-average number of common shares outstanding, plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares represent outstanding restricted stock units.

As a result of the redemption feature related to the Put/Call Agreement in the prior year, the Company recorded the prior year 25% noncontrolling interest as redeemable and classified it in temporary equity within its Condensed Consolidated Balance Sheets initially at its acquisition-date fair value. The noncontrolling interest was adjusted each reporting period for income (or loss) attributable to the noncontrolling interest. A measurement period adjustment, if any, was then made to adjust the noncontrolling interest to the higher of the redemption value or carrying value each reporting period. These adjustments were recognized through retained earnings and were not reflected in net income or net income attributable to Vera Bradley, Inc. When calculating earnings per share attributable to Vera Bradley, Inc., the Company adjusted the net income attributable to Vera Bradley, Inc. for the measurement period adjustment to the extent the redemption value exceeds the fair value of the noncontrolling interest on a cumulative basis. Refer to Note 12 for additional information regarding the purchase of the remaining 25% interest on January 30, 2023.

The components of basic and diluted earnings per share were as follows (in thousands, except per share data):

 

	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Numerator:
Net income (loss)	$	9,254	$	(36,901)	$	4,575	$	(43,611)
Less: Net loss attributable to redeemable noncontrolling interest	—		(7,134)		—		(6,870)
Net income (loss) attributable to Vera Bradley, Inc.	$	9,254	$	(29,767)	$	4,575	$	(36,741)
Denominator:
Weighted-average number of common shares (basic)	30,901		31,429		30,847		32,051
Dilutive effect of stock-based awards	238		—		361		—
Weighted-average number of common shares (diluted)	31,139		31,429		31,208		32,051
Net income (loss) per share available to Vera Bradley, Inc. common shareholders:
Basic	$	0.30	$	(0.95)	$	0.15	$	(1.15)
Diluted	$	0.30	$	(0.95)	$	0.15	$	(1.15)

For the thirteen and twenty-six weeks ended July 29, 2023, there were an immaterial number of additional shares issuable upon the vesting of restricted stock units that were excluded from the diluted share calculations because they were anti-dilutive.

For the thirteen and twenty-six weeks ended July 30, 2022, all potential common shares were excluded from the diluted share calculation because they were anti-dilutive due to the net loss in the period.

16

Vera Bradley, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

5.Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date:

•Level 1 – Quoted prices in active markets for identical assets or liabilities;

•Level 2 – Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly;

•Level 3 – Unobservable inputs based on the Company’s own assumptions.

The classification of fair value measurements within the hierarchy is based upon the lowest level of input that is significant to the measurement.

The carrying amounts reflected on the Condensed Consolidated Balance Sheets for cash and cash equivalents, accounts receivable, other current assets, and accounts payable as of July 29, 2023 and January 28, 2023, approximated their fair values.

The following table details the fair value measurements of the Company's investments as of July 29, 2023 and January 28, 2023 (in thousands):

	Level 1				Level 2				Level 3
	July 29, 2023		January 28, 2023		July 29, 2023		January 28, 2023		July 29, 2023		January 28, 2023
Cash equivalents(1)	$	366	$	360	$	—	$	—	$	—	$	—
(1) Cash equivalents primarily represent a money market fund that has a maturity of three months or less at the date of purchase. Due to the short maturity, the Company believes the carrying value approximates fair value.

The Company assesses potential impairments to its long-lived assets, which includes property, plant, and equipment and lease right-of-use assets, on a quarterly basis or whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Store-level assets and right-of-use assets are grouped at the individual store-level for the purpose of the impairment assessment. Recoverability of an asset group is measured by a comparison of the carrying amount of an asset group to its estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of the asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. The fair value of the store assets is determined using the discounted future cash flow method of anticipated cash flows through the store’s lease-end date using fair value measurement inputs classified as Level 3. The fair value of right-of-use assets is estimated using market comparative information for similar properties. Level 3 inputs are derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. There were no long-lived asset impairment charges for the thirteen and twenty-six weeks ended July 29, 2023. The Company recorded $0.8 million and $1.4 million for store property, plant, and equipment impairment charges and a corporate lease right-of-use asset impairment charge for the thirteen and twenty-six weeks ended July 30, 2022, respectively.

The discounted cash flow models used to estimate the applicable fair values involve numerous estimates and assumptions that are highly subjective. Changes to these estimates and assumptions could materially impact the fair value estimates. The estimates and assumptions critical to the overall fair value estimates include: (1) estimated future cash flow generated at the store level; (2) discount rates used to derive the present value factors used in determining the fair values; and (3) market rentals at the retail store. These and other estimates and assumptions are impacted by economic conditions and our expectations and may change in the future based on period-specific facts and circumstances. If economic conditions were to deteriorate, future impairment charges may be required which may be material.

On a nonrecurring basis, assets recognized or disclosed at fair value on the consolidated financial statements include items such as property, plant, and equipment, including leasehold improvements, and operating lease assets, as well as assets related to the Pura Vida acquisition including goodwill (in the prior year) and intangible assets. These assets are measured at fair value if determined to be impaired. There were no goodwill or intangible asset impairment charges recorded during the thirteen and twenty-six weeks ended July 29, 2023. During the thirteen and twenty-six weeks

17

Vera Bradley, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

ended July 30, 2022, the Company recorded a $29.3 million impairment charge related to goodwill and the indefinite-lived Pura Vida brand asset in conjunction with its second quarter annual quantitative test. Refer to Note 13 herein for additional information.

6.Debt

On September 7, 2018, Vera Bradley Designs, Inc. (“VBD”), a wholly-owned subsidiary of the Company, entered into an asset-based revolving Credit Agreement (the “Credit Agreement”) among VBD, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto. The Credit Agreement provides for certain credit facilities to VBD in an aggregate principal amount not to initially exceed the lesser of $75.0 million or the amount of borrowing availability determined in accordance with a borrowing base of certain assets. Any proceeds of the credit facilities will be used to finance general corporate purposes of VBD and its subsidiaries, including but not limited to Vera Bradley International, LLC and Vera Bradley Sales, LLC (collectively, the “Named Subsidiaries”). The Credit Agreement also contains an option for VBD to arrange with lenders to increase the aggregate principal amount by up to $25.0 million.

Amounts outstanding under the Credit Agreement bear interest at a per annum rate equal to either (i) for CBFR borrowings (including swingline loans), the CB Floating Rate, where the CB Floating Rate is the prime rate which shall never be less than the adjusted one month LIBOR rate on such day, plus the Applicable Rate, where the Applicable Rate is a percentage spread ranging from -1.00% to -1.50% or (ii) for each eurodollar borrowing, the Adjusted LIBO Rate, where the Adjusted LIBO Rate is the LIBO rate for such interest period multiplied by the statutory reserve rate, for the interest period in effect for such borrowing, plus the Applicable Rate, where the Applicable Rate is a percentage ranging from 1.00% to 1.30%. The applicable CB Floating Rate, Adjusted LIBO Rate, or LIBO Rate shall be determined by the administrative agent. The Credit Agreement also requires VBD to pay a commitment fee for the unused portion of the revolving facility of up to 0.20% per annum.

VBD’s obligations under the Credit Agreement are guaranteed by the Company and the Named Subsidiaries. The obligations of VBD under the Credit Agreement are secured by substantially all of the respective assets of VBD, the Company, and the Named Subsidiaries and are further secured by the equity interests in VBD and the Named Subsidiaries.

The Credit Agreement contains various affirmative and negative covenants, including restrictions on the Company's ability to incur debt or liens; engage in mergers or consolidations; make certain investments, acquisitions, loans, and advances; sell assets; enter into certain swap agreements; pay dividends or make distributions or make other restricted payments; engage in certain transactions with affiliates; and amend, modify, or waive any of its rights related to subordinated indebtedness and certain charter and other organizational, governing, and material agreements. The Company may avoid certain of such restrictions by meeting payment conditions defined in the Credit Agreement.

The Credit Agreement also requires the Loan Parties to maintain a minimum fixed charge coverage ratio of 1.00 during periods when borrowing availability is less than the greater of (A) approximately $7.5 million, and (B) 10% of the lesser of (i) the aggregate revolving commitment, and (ii) the borrowing base. The fixed charge coverage ratio, availability, aggregate revolving commitment, and the borrowing base are further defined in the Credit Agreement.

The Credit Agreement contains customary events of default, including, among other things: (i) the failure to pay any principal, interest, or other fees under the Credit Agreement; (ii) the making of any materially incorrect representation or warranty; (iii) the failure to observe or perform any covenant, condition, or agreement in the Credit Agreement or related agreements; (iv) a cross default with respect to other material indebtedness; (v) bankruptcy and insolvency events; (vi) unsatisfied material final judgments; (vii) Employee Retirement Income Security Act of 1974 (“ERISA”) events that could reasonably be expected to have a material adverse effect; and (viii) a change in control (as defined in the Credit Agreement).

As of July 29, 2023 and January 28, 2023, the Company had no borrowings outstanding and availability of $75.0 million under the Credit Agreement.

Subsequent Event

Subsequent to the end of the second quarter, on August 3, 2023, certain subsidiaries of the Company, JP Morgan Chase Bank, N.A., as the administrative agent, and lenders from time to time party thereto, entered into a Third Amendment (the “Third Amendment”) to the Credit Agreement dated September 7, 2018.

18

Vera Bradley, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

The Third Amendment amended the Credit Agreement to, among other things: extend the maturity date to May 2028; add Creative Genius, LLC as a borrower; increase an option for the borrowers to arrange with lenders to increase the aggregate principal amount by up to $50.0 million; update the commitment fee rate to 0.20% or 0.30% depending on the average quarterly utilization; update the interest rate per annum for the CB Floating Rate to the greater of the prime rate or 2.5% and remove references to the London Interbank Offered Rate (“LIBOR”) (in the case of a CBFR borrowings including swingline loans); remove references to eurodollar borrowings and replace with term benchmark borrowings where the interest rate per annum is the adjusted term Secured Overnight Financing Rate (“SOFR”), as defined in the Third Amendment to the Credit Agreement; and add RFR borrowings where the interest rate per annum is the adjusted daily simple SOFR, as defined in the Third Amendment to the Credit Agreement.

The Third Amendment also modified the periods that the fixed charge coverage ratio is not permitted to be less than 1.00. The borrowers are required to maintain the fixed charge coverage ratio for periods when borrowing availability is less than the greater of (A) approximately $9.4 million, and (B) 12.5% of the lesser of (i) the aggregate revolving commitment, and (ii) the borrowing base. The fixed charge coverage ratio, availability, aggregate revolving commitment, and the borrowing base are further defined in the Credit Agreement.

7.Income Taxes

The provision for income taxes for interim periods is based on an estimate of the annual effective tax rate adjusted to reflect the impact of discrete items. Management judgment is required in projecting ordinary income to estimate the Company’s annual effective tax rate.

The effective tax rate for the thirteen weeks ended July 29, 2023, was 28.0%, compared to 13.9% for the thirteen weeks ended July 30, 2022. The year-over-year effective tax rate increase was primarily due to the relative impact of permanent items in the current-year period compared to the prior-year period, primarily as a result of noncontrolling interest in the prior-year period and non-deductible executive compensation.

The effective tax rate for the twenty-six weeks ended July 29, 2023, was 29.0%, compared to 14.7% for the twenty-six weeks ended July 30, 2022. The year-over-year effective tax rate increase was primarily due to the relative impact of permanent and discrete items in the current-year period compared to the prior-year period, primarily as a result of stock-based compensation, noncontrolling interest in the prior-year period, and non-deductible executive compensation.

Refer to Note 12 herein for information regarding the deferred income tax adjustment associated with the purchase of the remaining 25% interest in Pura Vida on January 30, 2023.

8.Stock-Based Compensation

The Company recognizes stock-based compensation expense, for its awards of restricted stock units, in an amount equal to the fair market value of the underlying stock on the grant date of the respective award.

The Company reserved 6,000,000 shares of common stock for issuance or transfer under the 2020 Equity and Incentive Plan, as amended, which allows for grants of restricted stock units, as well as other equity awards. The Company maintains the 2010 Equity and Incentive Plan for awards granted prior to the effectiveness of the 2020 Equity and Incentive Plan.

Awards of Restricted Stock Units

During the thirteen weeks ended July 29, 2023, the Company granted 195,617 time-based and performance-based restricted stock units with an aggregate fair value of $1.1 million to certain employees under the 2020 Equity and Incentive Plan. The company did not grant restricted stock units during the thirteen weeks ended July 30, 2022.

During the twenty-six weeks ended July 29, 2023, the Company granted 738,187 time-based and performance-based restricted stock units with an aggregate fair value of $4.3 million to certain employees and non-employee directors under the 2020 Equity and Incentive Plan compared to 841,369 time-based and performance-based restricted stock units with an aggregate fair value of $6.3 million in the same period of the prior year.

19

Vera Bradley, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

The majority of the time-based restricted stock units vest and settle in shares of the Company’s common stock, on a one-for-one basis, in equal installments on each of the first three anniversaries of the grant date. Restricted stock units issued to non-employee directors vest after a one-year period from the grant date. The Company recognizes the expense relating to these units, net of estimated forfeitures, on a straight-line basis over the vesting period.

Performance-based restricted stock units vest upon the completion of a three-year period of time (cliff vesting), subject to the employee’s continuing employment throughout and the Company’s achievement of annual earnings per share targets, or other Company performance targets, during the three-year performance period. The Company recognizes the expense relating to these units, net of estimated forfeitures, based on the probable outcome of achievement of the financial targets, on a straight-line basis over three years.

The following table sets forth a summary of restricted stock unit activity for the twenty-six weeks ended July 29, 2023 (units in thousands):

 

	Time-based Restricted Stock Units			Performance-based Restricted Stock Units
	Number of Units	Weighted- Average Grant Date Fair Value (per unit)		Number of Units	Weighted- Average Grant Date Fair Value (per unit)
Nonvested units outstanding at January 28, 2023	965	$	5.74	523	$	4.71
Granted	423	5.87		315	5.82
Vested	(396)	6.93		(94)	4.08
Forfeited	(142)	6.07		(87)	6.91
Nonvested units outstanding at July 29, 2023	850	$	5.20	657	$	5.04

As of July 29, 2023, there was $5.9 million of total unrecognized compensation cost, net of estimated forfeitures, related to nonvested restricted stock units. That cost is expected to be recognized over a weighted-average period of 2.2 years, subject to meeting performance conditions.

9.Commitments and Contingencies

The Company is subject to various claims and contingencies arising in the normal course of business, including those relating to product liability, legal claims, employee benefits, environmental issues, and other matters. Management believes that at this time it is not probable that any of these claims will have a material adverse effect on the Company’s financial condition, results of operations, or cash flows. However, the outcomes of legal proceedings and claims brought against the Company are subject to uncertainty, and future developments could cause these actions or claims, individually or in aggregate, to have a material adverse effect on the Company’s financial condition, results of operations, or cash flows of a particular reporting period.

In August 2019, Vesi Incorporated (“Vesi”) filed suit against the Company in the U.S. District Court for the Southern District of Ohio related to the Company’s licensing business and alleging breach of fiduciary duty, unfair competition, defamation, and tortious interference with prospective business relationships. The complaint sought damages in an amount not less than $10.0 million for punitive damages, attorney fees, prejudgment interest, and any other additional relief. In November 2019, the Company filed a counterclaim against the principals of Vesi as personal guarantors for monies owed to the Company by Vesi. The Company filed a motion for summary judgement asking the Court to dismiss all claims with prejudice and grant judgement on its counterclaim. On January 4, 2023, the Court granted the Company’s motion for summary judgment dismissing Vesi’s claims and also granted judgment on the Company’s counterclaims against the principals of Vesi for an immaterial amount. Vesi has appealed this decision. At this time, we are not able to estimate a possible loss or range of loss that may result from this matter or to determine whether such loss, if any, would have a material adverse effect on our financial condition or results of operations. The Company is vigorously defending itself and management believes that the Company has a number of meritorious legal defenses.

20

Vera Bradley, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

10.Common Stock

In December 2021, the Company's board of directors approved a share repurchase plan (the “2021 Share Repurchase Program”) which authorized Company management to utilize up to $50.0 million of available cash for repurchases of shares of the Company's common stock. The 2021 Share Repurchase Program went into effect beginning December 13, 2021 and expires in December 2024.

The Company purchased 248,320 shares at an average price of $5.70 per share, excluding commissions, for an aggregate amount of $1.4 million during the twenty-six weeks ended July 29, 2023 under the 2021 Share Repurchase Program. There was $26.3 million remaining available to repurchase shares of the Company's common stock under the 2021 Share Repurchase Program as of July 29, 2023.

As of July 29, 2023, the Company held as treasury shares 12,328,010 shares of its common stock at an average price of $10.89 per share, excluding commissions, for an aggregate carrying amount of $134.3 million. The Company’s treasury shares may be issued under the 2010 Equity and Incentive Plan (with respect to outstanding awards under that plan), under the 2020 Equity and Incentive Plan, or for other corporate purposes.

11.Cloud Computing Arrangements

The Company capitalizes implementation costs associated with its Cloud Computing Arrangements (“CCA”) consistent with costs capitalized for internal-use software. The CCA costs are amortized over the term of the related hosting agreement, taking into consideration renewal options, if any. The renewal period is included in the amortization period if determined that the option is reasonably certain to be exercised. The amortization expense is recorded within selling, general, and administrative expenses in the Company's Condensed Consolidated Statements of Operations, which is within the same line item as the related hosting fees. The balance of the unamortized CCA implementation costs totaled $4.9 million and $6.4 million as of July 29, 2023 and January 28, 2023, respectively. Of this total, $2.8 million and $3.0 million was recorded within prepaid expenses and other current assets and $2.1 million and $3.4 million was recorded within other assets on the Company's Condensed Consolidated Balance Sheets as of July 29, 2023 and January 28, 2023, respectively. The CCA implementation costs are recorded within operating activities in the Company's Condensed Consolidated Statements of Cash Flows.

12.Redeemable Noncontrolling Interest

Redeemable noncontrolling interest represented the remaining twenty-five percent (25%) interest in Pura Vida not acquired by the Company until January 30, 2023.

On July 16, 2019, the Company purchased 75% of Pura Vida's outstanding equity interest and entered into a Put/Call Agreement with the Sellers (the “Put/Call Agreement”) providing for certain rights with respect to the purchase by the Company and sale by the Sellers of the Remaining Pura Vida Interests. On January 23, 2023, the Company and certain of its subsidiaries entered into an Interest Purchase Agreement (the “Interest Purchase Agreement”) with Creative Genius Holdings, Inc. a California corporation, Creative Genius Investments, Inc., a California corporation, Griffin Thall, and Paul Goodman (collectively “Sellers”) to purchase the remaining 25% of the outstanding membership interests (the “Remaining Pura Vida Interests”) of Creative Genius, LLC, a California limited liability company (“Pura Vida”).

Pursuant to the Interest Purchase Agreement, and subject to the terms and conditions thereof, on the closing date (January 30, 2023), the Company acquired the Remaining Pura Vida Interests (the “Transaction”) in exchange for cash consideration consisting of $10.0 million paid at closing, subject to certain adjustments. The Transaction was not subject to financing conditions. The Company’s existing available cash and cash equivalents funded the purchase price. Following completion of the Transaction, the Company owns 100% of the ownership interests in Pura Vida.

The Interest Purchase Agreement provides that, as of the closing of the Transaction, all rights and obligations of the Company and the Sellers under any agreements among the parties, including the Put/Call Agreement, were terminated.

As a result of the Transaction, the Company recorded a decrease to redeemable noncontrolling interest of $10.7 million. The difference between the fair value of the consideration paid and the balance of the redeemable noncontrolling interest resulted in $0.7 million recognized in additional paid-in capital (“APIC”) during the thirteen weeks ended April 29, 2023. In addition, there was an APIC adjustment of $0.6 million related to deferred income

21

Vera Bradley, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

taxes for the purchase of the redeemable noncontrolling interest. The total APIC adjustment for this matter during the thirteen weeks ended April 29, 2023, was $1.3 million. Changes in redeemable noncontrolling interest for the twenty-six weeks ended July 29, 2023, were as follows (in thousands):    

Balance at January 28, 2023	$	10,712
Adjustment for purchase of noncontrolling interest	(10,712)
Balance at April 29, 2023 and July 29, 2023	$	—

Changes in redeemable noncontrolling interest for the thirteen and twenty-six weeks ended July 30, 2022, were as follows (in thousands):

Balance at January 29, 2022	$	30,974
Net income attributable to redeemable noncontrolling interest	264
Distributions to redeemable noncontrolling interest	(146)
Balance at April 30, 2022	$	31,092
Net loss attributable to redeemable noncontrolling interest	(7,134)
Distributions to redeemable noncontrolling interest	(467)
Balance at July 30, 2022	$	23,491

13.Intangible Assets and Goodwill

The following tables detail the carrying value of the Company's intangible assets other than goodwill related to the acquisition of a majority interest in Pura Vida. On January 30, 2023, the Company purchased the remaining 25% interest in Pura Vida.

	July 29, 2023
in thousands	Gross Basis		Accumulated Amortization(1)		Carrying Amount
Definite-lived intangible assets
Customer Relationships	$	24,208	$	(21,414)	$	2,794
Non-competition Agreements	788		(788)		—
Total definite-lived intangible assets	24,996		(22,202)		2,794
Indefinite-lived intangible asset
Pura Vida Brand (2)	11,666		—		11,666
Total intangible assets, excluding goodwill	$	36,662	$	(22,202)	$	14,460
(1) Amortization expense is recorded within the Pura Vida segment.
(2) Impairment charges of $9.9 million and $15.1 million were recorded within the Pura Vida segment during the second and fourth quarters of fiscal 2023.

22

Vera Bradley, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

	January 28, 2023
in thousands	Gross Basis		Accumulated Amortization(1)		Carrying Amount
Definite-lived intangible assets
Customer Relationships	$	24,208	$	(19,956)	$	4,252
Non-competition Agreements	788		(788)		—
Total definite-lived intangible assets	24,996		(20,744)		4,252
Indefinite-lived intangible asset
Pura Vida Brand (2)	11,666		—		11,666
Total intangible assets, excluding goodwill	$	36,662	$	(20,744)	$	15,918
(1) Amortization expense is recorded within the Pura Vida segment.
(2) Impairment charges of $9.9 million and $15.1 million were recorded within the Pura Vida segment during the second and fourth quarters of fiscal 2023.

Amortization expense is recorded within selling, general, and administrative expenses in the Company's Condensed Consolidated Statement of Operations. The future amortization expense for intangible assets is as follows (in thousands):

	Amortization Expense
Fiscal 2024 (remaining six months)	1,458
Fiscal 2025	1,336
Total	$	2,794

There was no goodwill balance as of July 29, 2023 and January 28, 2023 due to impairment charges recorded during fiscal 2023.

The Company performs its annual impairment test of the indefinite-lived Pura Vida brand during the second quarter of each fiscal year. The annual test included goodwill in prior years.

The fair value of the Pura Vida brand was estimated using a relief-from-royalty method. The estimates and assumptions used in the determination of the fair value of the Pura Vida brand included the projected revenue growth, long-term growth rate, the royalty rate, and discount rate.

For the prior year test, the fair value of the Pura Vida reporting unit was determined using a combination of an income-based approach (discounted cash flows) and a market-based approach (guideline transaction method). The discounted cash flow method involved subjective estimates and assumptions such as projected revenue growth, operating profit, and the discount rate. The guideline transaction method involved transaction multiples derived from the acquisition of controlling interests in stocks of companies that are engaged in the same or similar lines of business as the reporting unit.

During the assessment for the fiscal 2024 test, it was determined that the fair value of the Pura Vida brand exceeded its carrying value and no impairment charge was recorded. During the prior year test, the Company recorded an impairment charge of $9.9 million and $19.4 million for the Pura Vida brand and goodwill, respectively, for the thirteen and twenty-six weeks ended July 30, 2022 within the Pura Vida segment.

While we consider our assumptions in the determination of the fair value of these assets to be reasonable, they are complex and highly subjective. Adverse changes in key assumptions in future periods may result in further declines in the fair value estimates of the Pura Vida brand below its carrying value resulting in additional impairment charges, which could be material. Our key assumptions (as described above in the valuation methodologies used in the determination of fair value) may be impacted by macroeconomic conditions, including inflationary pressures and the impact on consumer discretionary spending, as well as a sustained decline in stock price and potential changes in business strategy. Refer to Note 5 herein for additional information regarding the fair value measurement.

23

Vera Bradley, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

14.Cost Savings Initiatives and Other Charges

Cost Savings Initiatives and Severance Charges

During fiscal 2023, the Company began implementation of its targeted cost reductions, which are expected to be fully realized in fiscal 2025. Expense savings are being derived across various areas of the Company, including retail store efficiencies, marketing expenses, information technology contracts, professional services, logistics and operational costs, and corporate payroll.

The Company incurred the following charges during the thirteen weeks ended July 29, 2023 (in thousands):

	Reportable Segment
	VB Direct		VB Indirect		Pura Vida		Unallocated Corporate Expenses		Total Expense
Severance charges	$	—	$	—	$	79	$	—	$	79
Consulting fees and other costs (1)	—		—		—		—		—
Total (2)	$	—	$	—	$	79	$	—	$	79
(1) Related to professional fees
(2) Recorded within selling, general, and administrative ("SG&A") expenses

The Company incurred the following charges during the thirteen weeks ended July 30, 2022 (in thousands):

	Reportable Segment
	VB Direct		VB Indirect		Pura Vida		Unallocated Corporate Expenses		Total Expense
Severance charges (1)	$	15	$	—	$	16	$	5,683	$	5,714
Consulting fees and other costs (2)	302		—		—		2,755		3,057
Total (3)	$	317	$	—	$	16	$	8,438	$	8,771
(1) Includes CEO retirement severance
(2) Includes $2.8 million for fees related to cost savings initiatives and CEO search and $0.3 million for concept brand exit costs
(3) $8.6 million of the charges are recorded within SG&A expenses and $0.2 million are recorded within cost of sales

The Company incurred the following charges during the twenty-six weeks ended July 29, 2023 (in thousands):

	Reportable Segment
	VB Direct		VB Indirect		Pura Vida		Unallocated Corporate Expenses		Total Expense
Severance charges (1)	$	342	$	—	$	79	$	1,647	$	2,068
Consulting fees and other costs (2)	—		—		—		105		105
Total (3)	$	342	$	—	$	79	$	1,752	$	2,173
(1) Includes former CFO severance
(2) Related to professional fees
(3) Recorded within SG&A expenses

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Vera Bradley, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

The Company incurred the following charges during the twenty-six weeks ended July 30, 2022 (in thousands):

	Reportable Segment
	VB Direct		VB Indirect		Pura Vida		Unallocated Corporate Expenses		Total Expense
Severance charges (1)	$	15	$	—	$	16	$	5,683	$	5,714
Consulting fees and other costs (2)	302		—		—		2,905		3,207
Total (3)	$	317	$	—	$	16	$	8,588	$	8,921
(1) Includes CEO retirement severance
(2) Includes $2.9 million for fees related to cost savings initiatives and CEO search and $0.3 million for concept brand exit costs
(3) $8.7 million of the charges are recorded within SG&A expenses and $0.2 million are recorded within cost of sales

A summary of charges and related liabilities associated with the cost savings initiatives and severance charges are as follows (in thousands):

	Severance Charges and Cash Retention Payment Acceleration Charges (1)		Consulting Fees and Other Costs
Liability as of January 28, 2023	$	3,083	$	60
Fiscal 2024 charges	2,068		105
Cash payments	(4,946)		(165)
Non-cash charges and adjustments	—		—
Liability as of July 29, 2023	$	205	$	—
(1) Remaining liability is recorded within accrued employment costs

Other Charges

During the thirteen and twenty-six weeks ended July 30, 2022, the Company recorded $5.9 million of non-cash inventory adjustments related to the exit of certain technology products and excess mask products and $1.1 million for purchase order cancellation fees related to spring 2023 product within cost of sales in its Condensed Consolidated Statement of Operations. Collectively, $5.1 million was recorded within the Direct segment, $1.0 million was recorded within the Indirect segment, and $0.9 million was recorded within the Pura Vida segment. There were no similar charges during the thirteen and twenty-six weeks ended July 29, 2023.

15.Segment Reporting

The Company has three operating segments, which are also its reportable segments: VB Direct, VB Indirect, and Pura Vida. These operating segments are components of the Company for which separate financial information is available and for which operating results are evaluated on a regular basis by the chief operating decision maker in deciding how to allocate resources and in assessing the performance of the segments.

The VB Direct segment includes Vera Bradley full-line and factory outlet stores; the Vera Bradley website, verabradley.com; the Vera Bradley online outlet site; and the Vera Bradley annual outlet sale. Revenues generated from this segment are driven through the sale of Vera Bradley-branded products from Vera Bradley to end consumers.

The VB Indirect segment represents revenues generated through the distribution of Vera Bradley-branded products to specialty retailers representing approximately 1,700 locations, substantially all of which are located in the United States; key accounts, which include department stores, national accounts, third-party e-commerce sites, and third-party inventory liquidators; and royalties recognized through licensing agreements related to the Vera Bradley brand.

25

Vera Bradley, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

The Pura Vida segment represents revenues generated through the Pura Vida websites, www.puravidabracelets.com, puravidabracelets.ca, and www.puravidabracelets.eu; through the distribution of Pura Vida-branded products to wholesale retailers, substantially all of which are located in the United States; and through the Pura Vida retail stores.

Corporate costs represent the Company’s administrative expenses, which include, but are not limited to: human resources, legal, finance, information technology, design, product development, merchandising, corporate-level marketing and advertising, and various other corporate-level-activity-related expenses not directly attributable to a reportable segment. All intercompany-related activities are eliminated in consolidation and are excluded from the segment reporting.

Company management evaluates segment operating results based on several indicators. The primary or key performance indicators for each segment are net revenues and operating income. Net revenues and operating income information for the Company’s reportable segments during the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022, respectively, consisted of the following (in thousands):

	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Segment net revenues:
VB Direct	$	85,702	$	87,013	$	144,607	$	148,649
VB Indirect	17,363		17,325		32,736		34,302
Pura Vida	25,107		26,033		45,191		45,879
Total	$	128,172	$	130,371	$	222,534	$	228,830
Segment operating income (loss):
VB Direct	$	20,621	$	10,044	$	27,961	$	15,547
VB Indirect	6,204		3,918		10,910		9,397
Pura Vida	4,000		(28,534)		5,562		(27,478)
Total	$	30,825	$	(14,572)	$	44,433	$	(2,534)
Reconciliation:
Segment operating income (loss)	$	30,825	$	(14,572)	$	44,433	$	(2,534)
Less:
Unallocated corporate expenses	(17,954)		(28,249)		(37,948)		(48,520)
Operating income (loss)	$	12,871	$	(42,821)	$	6,485	$	(51,054)

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ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion summarizes the significant factors affecting the condensed consolidated operating results, financial condition, liquidity, and cash flows of the Company as of and for the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022. The following discussion should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended January 28, 2023, and our unaudited condensed consolidated financial statements and the related notes included in Item 1 of this Quarterly Report. The results of operations for the thirteen and twenty-six weeks ended July 29, 2023, are not necessarily indicative of the results to be expected for the full fiscal year.

Strategic Progress, Macroeconomic Factors, and Other Factors Impacting our Financial Condition and Results of Operations

Strategic Progress. In the second quarter of fiscal 2024, we continued work on Project Restoration, which is focused on four key pillars of the business for each brand to help drive long-term profitable growth. These pillars are: Consumer, Brand, Product, and Channel.

During the second quarter, for the Vera Bradley brand, we continued with product collaborations and launched our first Hello Kitty collection in June.

During the second quarter, for the Pura Vida brand, our “Live Free” campaign launched in June and accentuated travel, adventure, friendship, and freedom and which we believe created engagement and excitement with our customer base. We are also utilizing our new customer data platform to more strategically target customers and potential customers, with a focus on customer retention.

In addition, we continued to identify cost reductions as part of our overall plan to right-size the expense structure of our Company and lay the groundwork for success to help drive long-term profitable growth.

These expense savings are expected to be fully realized in fiscal 2025. Savings are being derived across various areas of the Company, including retail store efficiencies, marketing expenses, information technology contracts, professional services, logistics and operational costs, and corporate payroll. We will continue to review our expense structure for additional cost reduction opportunities.

Macroeconomic and Other Factors. We have been impacted by higher tariffs from previously duty-free countries, where we source products, as a result of the expiration of the Generalized System of Preferences (“GSP”) duty-free status at the end of calendar year 2020. In addition, the macroeconomic environment has been further challenged by inflationary pressures, including high gas prices, and other related factors that have impacted consumer discretionary spending. We continued to see weakness in the Vera Bradley factory outlet store business in the second quarter, which was offset by the return of the Vera Bradley annual outlet sale in June.

Within our supply chain, the COVID-19 pandemic caused disruptions that have resulted in delivery delays and increased inbound and outbound shipping costs. However, these supply chain disruptions began to stabilize towards the end of fiscal 2023 and we continued to see favorability in our operating results associated with the reduction in these costs in the second quarter of fiscal 2024 compared to the prior-year period.

We also implemented strategic price increases across both of our brands to mitigate some of these inflationary and supply chain pressures in late fiscal 2022 and early fiscal 2023. We will continue to monitor our pricing as it relates to the current macroeconomic trends.

While we continue to actively monitor this rapidly evolving macroeconomic environment and are working to mitigate the situation, these matters could have a material adverse effect on our liquidity, operating results, and financial condition.

How We Assess the Performance of Our Business

In assessing the performance of our business, we consider a variety of performance and financial measures.

Net Revenues

Net revenues reflect sales of our merchandise and revenue from distribution and shipping and handling fees, less returns and discounts. Revenues for the VB Direct segment reflect sales through Vera Bradley full-line and factory outlet stores; the Vera Bradley website, verabradley.com; the Vera Bradley online outlet site; and the Vera Bradley annual outlet sale. The Vera Bradley annual outlet sale was cancelled in the prior year but resumed in June 2023. Revenues for the VB Indirect segment reflect sales of Vera Bradley-branded products to specialty retail partners; department stores; national accounts; third-party e-commerce sites; third-party inventory liquidators; and royalties recognized through licensing agreements related to the Vera Bradley brand. Revenues for the Pura Vida segment reflect revenues generated through the Pura Vida websites,

27

www.puravidabracelets.com, puravidabracelets.ca, and www.puravidabracelets.eu; through the distribution of Pura Vida-branded products to wholesale retailers; and through Pura Vida retail stores.

Comparable Sales

Comparable sales are calculated based upon our stores that have been open for at least 12 full fiscal months and net revenues from our Vera Bradley e-commerce operations. Comparable store sales are calculated based solely upon stores that have been open for at least 12 full fiscal months. Remodeled stores are included in both comparable sales and comparable store sales unless the store was closed for more than one week of the current or comparable prior period, in which case the non-comparable temporary closure periods are not included, or the remodel resulted in a significant change in square footage. Some of our competitors and other retailers calculate comparable or “same store” sales differently than we do. As a result, data in this report regarding our comparable sales and comparable store sales may not be comparable to similar data made available by other companies. Non-comparable sales include sales from stores not included in comparable sales or comparable store sales.

Measuring the change in year-over-year comparable sales allows us and our investors to evaluate how our store base and e-commerce operations are performing. Various factors affect our comparable sales, including:

•Overall economic trends;

•Consumer preferences and fashion trends;

•Competition;

•The timing of our releases of new patterns and collections;

•Changes in our product mix;

•Pricing, as well as timing and level of promotions;

•Amount of store, mall, and e-commerce traffic;

•The level of customer service that we provide in stores and to our on-line customers;

•Our ability to source and distribute products efficiently;

•The number of stores we open and close in any period; and

•The timing and success of promotional and marketing efforts.

Gross Profit

Gross profit is equal to our net revenues less our cost of sales. Cost of sales includes the direct cost of purchased merchandise, distribution center costs, operations overhead, duty, all inbound freight costs incurred, and inventory adjustments, if any. The components of our reported cost of sales may not be comparable to those of other retail and wholesale companies.

Gross profit can be impacted by changes in volume; fluctuations in sales price; inbound freight and other logistical costs; operational efficiencies, such as leveraging of fixed costs; promotional activities, including free shipping; commodity prices, such as for cotton; tariffs; and labor costs.

Selling, General, and Administrative Expenses (“SG&A”)

SG&A expenses include selling; advertising, marketing, and product development; and administrative expenses. Selling expenses include:

•VB Direct business expenses, such as store expenses, employee compensation, and store occupancy and supply costs;

•VB Indirect business expenses consisting primarily of employee compensation and other expenses associated with sales to Indirect retailers; and

•Pura Vida business expenses primarily related to employee compensation and store expenses.

Advertising, marketing, and product development expenses include employee compensation, media costs, creative production expenses, marketing agency fees, new product design costs, public relations expenses, and market research expenses. Administrative expenses include employee compensation for corporate functions, corporate headquarters occupancy costs, consulting and software expenses, and charitable donations, as well as severance charges and consulting fees associated with cost savings initiatives disclosed in Note 14 to the Notes to the Condensed Consolidated Financial Statements herein.

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Operating Income (Loss)

Operating income (loss) is equal to gross profit less SG&A expenses plus other income, net. Operating income (loss) excludes interest income, interest expense, and income taxes.

Net Income (Loss)

Net income (loss) is equal to operating income (loss) plus interest income less interest expense and income taxes.

Net Income (Loss) Attributable to Vera Bradley, Inc.

Net income (loss) attributable to Vera Bradley, Inc. is equal to net income (loss) less net loss attributable to redeemable noncontrolling interest.

Impairment Charges

Goodwill and Other Intangible Assets

We perform our annual impairment test of the indefinite-lived Pura Vida brand (and goodwill in prior years) during the second quarter of each fiscal year.

There were no impairment charges recorded during the thirteen and twenty-six weeks ended July 29, 2023. During the thirteen and twenty-six weeks ended July 30, 2022, impairment charges of $9.9 million and $19.4 million for the Pura Vida brand and goodwill, respectively, were recorded within the Pura Vida segment. Refer to Note 13 herein, as well as Note 15 to the Notes to the Consolidated Financial Statements filed with the SEC on Form 10-K for the fiscal year ended January 28, 2023, for additional information regarding the goodwill and indefinite-lived intangible assets impairment tests and impairment charges recorded during fiscal 2023.

Long-lived Assets

Property, plant, and equipment and lease right-of-use assets (the “asset group” for store-related assets) are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable. The reviews are conducted at the lowest identifiable level of cash flows. If the estimated undiscounted future cash flows related to the asset group are less than the carrying value, we recognize a loss equal to the difference between the carrying value and the fair value, as further defined in Note 5 to the Notes to the Condensed Consolidated Financial Statements herein. There were no impairment charges recorded during the thirteen and twenty-six weeks ended July 29, 2023. Impairment charges of $0.8 million and $1.4 million were recognized during the thirteen and twenty-six weeks ended July 30, 2022, for store-related property, plant, and equipment and a lease right-of-use asset which are included in SG&A expenses in the Condensed Consolidated Statements of Operations and in other impairment charges in the Condensed Consolidated Statements of Cash Flows. $0.8 million of the impairment charge is included in the Direct segment for the thirteen and twenty-six weeks ended July 30, 2022, and $0.6 million of the impairment charge is included in corporate unallocated expenses for the twenty-six weeks ended July 30, 2022. We are unable to predict the extent of the impact that the inflationary environment could have on our operations, the economy, or other factors; therefore, it is possible additional impairments could be identified in future periods, and such amounts could be material.

Results of Operations

The following tables summarize key components of our condensed consolidated results of operations for the periods indicated, both in dollars and as a percentage of our net revenues ($ in thousands):

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	Thirteen Weeks Ended						Twenty-Six Weeks Ended
	July 29, 2023			July 30, 2022			July 29, 2023			July 30, 2022
Statement of Operations Data:
Net revenues	$	128,172		$	130,371		$	222,534		$	228,830
Cost of sales	56,156			69,854			98,769			115,799
Gross profit	72,016			60,517			123,765			113,031
Selling, general, and administrative expenses	59,405			74,042			117,911			134,956
Impairment of goodwill and intangible assets	—			29,338			—			29,338
Other income, net	260			42			631			209
Operating income (loss)	12,871			(42,821)			6,485			(51,054)
Interest expense, net	12			36			44			76
Income (loss) before income taxes	12,859			(42,857)			6,441			(51,130)
Income tax expense (benefit)	3,605			(5,956)			1,866			(7,519)
Net income (loss)	9,254			(36,901)			4,575			(43,611)
Less: Net loss attributable to redeemable noncontrolling interest	—			(7,134)			—			(6,870)
Net income (loss) attributable to Vera Bradley, Inc.	$	9,254		$	(29,767)		$	4,575		$	(36,741)
Percentage of Net Revenues:
Net revenues	100.0		%	100.0		%	100.0		%	100.0		%
Cost of sales	43.8		%	53.6		%	44.4		%	50.6		%
Gross profit	56.2		%	46.4		%	55.6		%	49.4		%
Selling, general, and administrative expenses	46.3		%	56.8		%	53.0		%	59.0		%
Impairment of goodwill and intangible assets	—		%	22.5		%	—		%	12.8		%
Other income, net	0.2		%	—		%	0.3		%	0.1		%
Operating income (loss)	10.0		%	(32.8)		%	2.9		%	(22.3)		%
Interest expense, net	—		%	—		%	—		%	—		%
Income (loss) before income taxes	10.0		%	(32.9)		%	2.9		%	(22.3)		%
Income tax expense (benefit)	2.8		%	(4.6)		%	0.8		%	(3.3)		%
Net income (loss)	7.2		%	(28.3)		%	2.1		%	(19.1)		%
Less: Net loss attributable to redeemable noncontrolling interest	—		%	(5.5)		%	—		%	(3.0)		%
Net income (loss) attributable to Vera Bradley, Inc.	7.2		%	(22.8)		%	2.1		%	(16.1)		%

The following tables present net revenues and operating income (loss) by operating segment, both in dollars and as a percentage of associated net revenues, and store data for the periods indicated ($ in thousands, except as otherwise indicated):

30

 

	Thirteen Weeks Ended						Twenty-Six Weeks Ended
	July 29, 2023			July 30, 2022			July 29, 2023			July 30, 2022
Net Revenues by Segment:
VB Direct	$	85,702		$	87,013		$	144,607		$	148,649
VB Indirect	17,363			17,325			32,736			34,302
Pura Vida	25,107			26,033			45,191			45,879
Total	$	128,172		$	130,371		$	222,534		$	228,830
Percentage of Net Revenues by Segment:
VB Direct	66.9		%	66.7		%	65.0		%	65.0		%
VB Indirect	13.5		%	13.3		%	14.7		%	15.0		%
Pura Vida	19.6		%	20.0		%	20.3		%	20.0		%
Total	100.0		%	100.0		%	100.0		%	100.0		%

	Thirteen Weeks Ended						Twenty-Six Weeks Ended
	July 29, 2023			July 30, 2022			July 29, 2023			July 30, 2022
Operating Income (Loss) by Segment:
VB Direct	$	20,621		$	10,044		$	27,961		$	15,547
VB Indirect	6,204			3,918			10,910			9,397
Pura Vida	4,000			(28,534)			5,562			(27,478)
Less: Corporate unallocated	(17,954)			(28,249)			(37,948)			(48,520)
Total	$	12,871		$	(42,821)		$	6,485		$	(51,054)
Operating Income (Loss) as a Percentage of Net Revenues by Segment:
VB Direct	24.1		%	11.5		%	19.3		%	10.5		%
VB Indirect	35.7		%	22.6		%	33.3		%	27.4		%
Pura Vida	15.9		%	(109.6)		%	12.3		%	(59.9)		%
Vera Bradley Store Data (1):
Total stores opened during period	—			2			2			4
Total stores closed during period	(3)			(3)			(7)			(6)
Total stores open at end of period	125			143			125			143
Total gross square footage at end of period	375,576			405,829			375,576			405,829
Average net revenues per gross square foot (2)	$	147		$	149		$	245		$	252
Comparable sales (including e-commerce) decrease (3)	(5.3)		%	(13.8)		%	(4.5)		%	(12.7)		%

(1)Includes Vera Bradley full-line and factory outlet stores. These figures do not include Pura Vida retail locations or Pura Vida e-commerce operations.

(2)Dollars not in thousands. Average net revenues per gross square foot are calculated by dividing total net revenues for our stores that have been open at least 12 full fiscal months as of the end of the period by total gross square footage for those stores. Remodeled stores are included in average net revenues per gross square foot unless the store was closed for a portion of the period.

(3)Comparable sales are calculated based upon stores that have been open for at least 12 full fiscal months and net revenues from e-commerce operations. Comparable sales decrease is reported as a percentage of the comparable sales for the same period in the prior fiscal year. Remodeled stores are included in comparable sales unless the store was closed for a portion of the current or comparable prior period, in which case the non-comparable temporary closure periods are not included, or the remodel resulted in a significant change in square footage.

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Thirteen Weeks Ended July 29, 2023, Compared to Thirteen Weeks Ended July 30, 2022

Net Revenues

For the thirteen weeks ended July 29, 2023, net revenues decreased $2.2 million, or 1.7%, to $128.2 million, from $130.4 million in the comparable prior-year period.

VB Direct. For the thirteen weeks ended July 29, 2023, net revenues in the VB Direct segment decreased $1.3 million, or 1.5%, to $85.7 million, from $87.0 million in the comparable prior-year period. Vera Bradley comparable sales decreased 5.3%, which includes a 5.8% decrease in comparable store sales and a 4.1% decrease in e-commerce sales. In addition, non-comparable store revenue decreased $1.1 million. Closed retail store locations were partially offset by two factory outlet stores opened in the current year. The decrease in comparable sales and comparable store sales was impacted by reduced conversion and units sold primarily in the factory outlet channel and the elimination of one online outlet sale during the quarter. These decreases were partially offset by sales from the Vera Bradley annual outlet sale held during the current-year period but not in the comparable prior-year period.

VB Indirect. For the thirteen weeks ended July 29, 2023, net revenues in the VB Indirect segment increased $0.1 million, or 0.2%, to $17.4 million, from $17.3 million in the comparable prior-year period. An increase in key account orders was offset by a decrease in specialty account orders.

Pura Vida. For the thirteen weeks ended July 29, 2023, net revenues in the Pura Vida segment decreased $0.9 million, or 3.6%, to $25.1 million, from $26.0 million in the comparable prior-year period. The decrease was primarily due to a decline in wholesale and e-commerce sales, partially offset by an increase in retail store sales associated with four non-comparable retail stores opened in the prior year.

Gross Profit

For the thirteen weeks ended July 29, 2023, gross profit increased $11.5 million, or 19.0%, to $72.0 million, from $60.5 million in the comparable prior-year period. As a percentage of net revenues, gross profit increased to 56.2% for the thirteen weeks ended July 29, 2023, from 46.4% in the comparable prior-year period. Prior year gross margin as a percentage of net revenues was negatively impacted by approximately 470 basis points for inventory adjustments related to the exit of certain technology products and excess mask inventory, approximately 90 basis points for purchase order cancellation fees related to certain spring 2023 products, and overhead deleverage. In addition, the rate for the current-year period was positively impacted by a decrease in inbound and outbound freight and shipping costs and the sell-through of previously reserved excess inventory, partially offset by increased promotional activity.

Selling, General, and Administrative Expenses

For the thirteen weeks ended July 29, 2023, SG&A expenses decreased $14.6 million, or 19.8%, to $59.4 million, from $74.0 million in the comparable prior-year period. As a percentage of net revenues, SG&A expenses decreased to 46.3% for the thirteen weeks ended July 29, 2023, from 56.8% in the comparable prior-year period. SG&A expenses related to Vera Bradley and corporate unallocated were $47.7 million compared to $60.6 million in the comparable prior-year period. SG&A expenses related to Pura Vida were $11.7 million compared to $13.4 million in the comparable prior-year period. The decrease in consolidated SG&A expenses for the thirteen weeks ended July 29, 2023 was primarily due to a $5.6 million decrease in severance charges which included retirement severance in the prior year for our former CEO; a $2.8 million decrease in expenses associated with cost savings initiatives and CEO search fees that did not recur in the current year; a decrease in employee-related expenses of $2.3 million due to a reduction in headcount, partially offset by an increase in incentive compensation due to Company performance estimates; $0.8 million related to store impairment charges in the prior year that did not recur in the current year; and $3.1 million in other net expense reductions which included spending reductions related to information technology contracts, visual merchandising, certain professional fees, and other expenses. SG&A expenses as a percentage of net revenues decreased primarily due to the aforementioned items, partially offset by SG&A expense deleverage associated with a decrease in sales.

Impairment of Goodwill and Intangible Assets

There were no impairment charges of goodwill and intangible assets for the thirteen weeks ended July 29, 2023. For the thirteen weeks ended July 30, 2022, impairment of goodwill and intangible assets totaled $29.3 million. These charges related to Pura Vida goodwill and the indefinite-lived Pura Vida brand asset and are reflected within the Pura Vida segment. For additional information, refer to Goodwill and Other Intangible Assets herein.

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Other Income, Net

For the thirteen weeks ended July 29, 2023, net other income increased $0.2 million to $0.3 million compared to $42.0 thousand in the comparable prior-year period. The increase in net other income was primarily due to ticket sales from the Vera Bradley annual outlet sale and sublease income.

Operating Income (Loss)

For the thirteen weeks ended July 29, 2023, operating income increased $55.7 million, or 130.1%, to $12.9 million in the current-year period, from an operating loss of $(42.8) million in the comparable prior-year period. As a percentage of net revenues, operating income (loss) was 10.0% and (32.8)% for the thirteen weeks ended July 29, 2023 and July 30, 2022, respectively. Operating income increased due to the factors described in the captions above.

VB Direct. For the thirteen weeks ended July 29, 2023, operating income in the VB Direct segment increased $10.5 million, or 105.3%, to $20.6 million from $10.1 million in the comparable prior-year period. As a percentage of VB Direct segment net revenues, operating income in the VB Direct segment was 24.1% and 11.5% for the thirteen weeks ended July 29, 2023 and July 30, 2022, respectively. The increase in operating income as a percentage of VB Direct segment net revenues was primarily due to an increase in gross margin as a percentage of net revenues as described above; a decrease in employee-related expenses due to closed stores and cost savings initiatives; store impairment charges in the prior year that did not recur in the current year; and a reduction in spending associated with visual merchandising, professional fees, and other variable expenses. These increases were partially offset by SG&A expense deleverage associated with decreased sales.

VB Indirect. For the thirteen weeks ended July 29, 2023, operating income in the VB Indirect segment increased $2.3 million, or 58.3%, to $6.2 million from $3.9 million in the comparable prior-year period. As a percentage of VB Indirect segment net revenues, operating income in the VB Indirect segment was 35.7% and 22.6% for the thirteen weeks ended July 29, 2023 and July 30, 2022, respectively. The increase in operating income as a percentage of VB Indirect segment net revenues was due to an increase in gross margin as a percentage of net revenues as described above.

Pura Vida. For the thirteen weeks ended July 29, 2023, operating income in the Pura Vida segment increased $32.5 million, or 114.0%, to $4.0 million from an operating loss of $(28.5) million in the comparable prior-year period. As a percentage of Pura Vida segment net revenues, operating income (loss) in the Pura Vida segment was 15.9% and (109.6)% for the thirteen weeks ended July 29, 2023 and July 30, 2022, respectively. The increase in operating income as a percentage of Pura Vida net revenues was primarily due to goodwill and indefinite-lived Pura Vida brand impairment charges in the prior-year period of $19.4 million and $9.9 million, respectively; a decrease in marketing and advertising expense; a decrease in employee-related expense due to headcount reductions and cost savings initiatives; and an increase in gross margin as a percentage of net revenues as described above, including inventory adjustments for excess mask products which impacted the operating loss as a percentage of net revenues by approximately 370 basis points in the prior year. These benefits to operating income as a percentage of net revenues were partially offset by expenses associated with non-comparable retail stores opened in the prior year and SG&A expense deleverage associated with a decrease in sales, excluding non-comparable stores.

Corporate Unallocated. For the thirteen weeks ended July 29, 2023, unallocated expenses decreased $10.2 million, or 36.4%, to $18.0 million from $28.2 million in the comparable prior-year period. The decrease in unallocated expenses was primarily due to prior year severance charges of $5.7 million which included severance associated with the retirement of our former CEO that did not recur in the current year; prior year consulting fees of $2.8 million associated with cost savings initiatives and the CEO search that did not recur in the current year; a reduction in employee-related expenses of $1.2 million primarily related to lower headcount, partially offset by an increase in incentive compensation expense as a result of Company performance estimates; and $0.5 million in other net corporate expense reductions including a reduction in corporate advertising spending, information technology contracts, and other corporate expenses.

Income Tax Expense (Benefit)

The effective tax rate for the thirteen weeks ended July 29, 2023, was 28.0%, compared to 13.9% for the thirteen weeks ended July 30, 2022. The year-over year effective tax rate increase was primarily due to the relative impact of permanent items in the current-year period compared to the prior-year period, primarily as a result of noncontrolling interest in the prior-year period and non-deductible executive compensation.

Net Income (Loss)

For the thirteen weeks ended July 29, 2023, net income increased $46.2 million to $9.3 million from a net loss of $(36.9) million in the comparable prior-year period due to the factors described in the captions above.

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Net Loss Attributable to Redeemable Noncontrolling Interest

For the thirteen weeks ended July 30, 2022, net loss attributable to redeemable noncontrolling interest was $(7.1) million. This represents the allocation of the Pura Vida net loss to the noncontrolling interest. On January 30, 2023, we purchased the remaining 25% interest in Pura Vida resulting in 100% ownership. As a result, there was no noncontrolling interest for the current-year period.

Net Income (Loss) Attributable to Vera Bradley, Inc.

For the thirteen weeks ended July 29, 2023, net income attributable to Vera Bradley, Inc. increased $39.1 million to $9.3 million from a net loss of $(29.8) million in the comparable prior-year period due to the factors described in the captions above.

Twenty-Six Weeks Ended July 29, 2023, Compared to Twenty-Six Weeks Ended July 30, 2022

Net Revenues

For the twenty-six weeks ended July 29, 2023, net revenues decreased $6.3 million, or 2.8%, to $222.5 million, from $228.8 million in the comparable prior-year period.

VB Direct. For the twenty-six weeks ended July 29, 2023, net revenues in the VB Direct segment decreased $4.0 million, or 2.7%, to $144.6 million, from $148.6 million in the comparable prior-year period. Vera Bradley comparable sales decreased 4.5%, which includes a 7.0% decrease in comparable store sales. E-commerce sales were flat compared to the prior-year period. In addition, non-comparable store revenue decreased $1.7 million. Closed retail store locations were partially offset by two factory outlet stores opened in the current year. The decrease in comparable sales and comparable store sales was impacted by reduced traffic, conversion, and units sold primarily in the factory outlet channel and the elimination of one online outlet sale during the second quarter of the current year. These decreases were partially offset by sales from the Vera Bradley annual outlet sale held during the current-year period but not in the comparable prior-year period.

VB Indirect. For the twenty-six weeks ended July 29, 2023, net revenues in the VB Indirect segment decreased $1.6 million, or 4.6%, to $32.7 million, from $34.3 million in the comparable prior-year period. The decrease was primarily due to a one-time key account order that did not recur in the current-year period, along with channel mix changes.

Pura Vida. For the twenty-six weeks ended July 29, 2023, net revenues in the Pura Vida segment decreased $0.7 million, or 1.5%, to $45.2 million, from $45.9 million in the comparable prior-year period. The decrease was primarily due to a decline in wholesale and e-commerce sales, partially offset by an increase in retail store sales associated with four non-comparable retail stores opened in the prior year.

Gross Profit

For the twenty-six weeks ended July 29, 2023, gross profit increased $10.8 million, or 9.5%, to $123.8 million, from $113.0 million in the comparable prior-year period. As a percentage of net revenues, gross profit increased to 55.6% for the twenty-six weeks ended July 29, 2023, from 49.4% in the comparable prior-year period. Prior year gross margin as a percentage of net revenues was negatively impacted by approximately 270 basis points for inventory adjustments related to the exit of certain technology products and excess mask inventory, approximately 50 basis points for purchase order cancellation fees related to certain spring 2023 products, and overhead deleverage. In addition, the rate the current-year period was positively impacted by a decrease in inbound and outbound freight and shipping costs and the sell-through of previously reserved excess inventory.

Selling, General, and Administrative Expenses

For the twenty-six weeks ended July 29, 2023, SG&A expenses decreased $17.1 million, or 12.6%, to $117.9 million, from $135.0 million in the comparable prior-year period. As a percentage of net revenues, SG&A expenses decreased to 53.0% for the twenty-six weeks ended July 29, 2023, from 59.0% in the comparable prior-year period. SG&A expenses related to Vera Bradley and corporate unallocated were $95.5 million compared to $111.0 million in the comparable prior-year period. SG&A expenses related to Pura Vida were $22.4 million compared to $24.0 million in the comparable prior-year period. The decrease in consolidated SG&A expenses for the twenty-six weeks ended July 29, 2023 was primarily due to a decrease in employee-related expenses of $4.5 million due to a reduction in headcount, partially offset by an increase in incentive compensation due to Company performance estimates; a decrease in severance charges of $3.6 million, which includes severance related to our CFO transition in the current year more than offset by the retirement severance related to our former CEO in the prior year; a $2.9 million decrease in expenses associated with cost savings initiatives and CEO search fees that did not recur in the current year; $1.4 million related to store and lease right-of-use asset impairment charges in the prior year that did not recur in the current year; and $4.7 million in other net expense reductions which included information technology contracts, certain

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professional fees, visual merchandising, and other expenses. SG&A expenses as a percentage of net revenues decreased primarily due to the aforementioned items, partially offset by SG&A expense deleverage associated with a decrease in sales.

Impairment of Goodwill and Intangible Assets

There were no impairment charges of goodwill and intangible assets for the twenty-six weeks ended July 29, 2023. For the twenty-six weeks ended July 30, 2022, impairment of goodwill and intangible assets totaled $29.3 million. These charges related to Pura Vida goodwill and the indefinite-lived Pura Vida brand asset and are reflected within the Pura Vida segment. For additional information, refer to Goodwill and Other Intangible Assets herein.

Other Income, Net

For the twenty-six weeks ended July 29, 2023, net other income increased $0.4 million to $0.6 million compared to $0.2 million in the comparable prior-year period. The increase in net other income was primarily due to a legal settlement in the current year that did not occur in the prior year, ticket sales from the Vera Bradley annual outlet sale, and sublease income.

Operating Income (Loss)

For the twenty-six weeks ended July 29, 2023, operating income increased $57.6 million, or 112.7%, to $6.5 million in the current-year period, from an operating loss of $(51.1) million in the comparable prior-year period. As a percentage of net revenues, operating income (loss) was 2.9% and (22.3)% for the twenty-six weeks ended July 29, 2023 and July 30, 2022, respectively. Operating income increased due to the factors described in the captions above.

VB Direct. For the twenty-six weeks ended July 29, 2023, operating income in the VB Direct segment increased $12.5 million, or 79.8%, to $28.0 million from $15.5 million in the comparable prior-year period. As a percentage of VB Direct segment net revenues, operating income in the VB Direct segment was 19.3% and 10.5% for the twenty-six weeks ended July 29, 2023 and July 30, 2022, respectively. The increase in operating income as a percentage of VB Direct segment net revenues was primarily due to an increase in gross margin as a percentage of net revenues as described above; a decrease in employee-related expenses due to closed stores and cost savings initiatives; store impairment charges in the prior year that did not recur in the current year; and a reduction in spending associated with advertising, visual merchandising, professional fees, and other variable expenses. These increases were partially offset by SG&A expense deleverage associated with decreased sales and severance expenses in the current year.

VB Indirect. For the twenty-six weeks ended July 29, 2023, operating income in the VB Indirect segment increased $1.5 million, or 16.1%, to $10.9 million from $9.4 million in the comparable prior-year period. As a percentage of VB Indirect segment net revenues, operating income in the VB Indirect segment was 33.3% and 27.4% for the twenty-six weeks ended July 29, 2023 and July 30, 2022, respectively. The increase in operating income as a percentage of VB Indirect segment net revenues was due to an increase in gross margin as a percentage of net revenues as described above. These increases were partially offset by SG&A expense deleverage associated with decreased sales.

Pura Vida. For the twenty-six weeks ended July 29, 2023, operating income in the Pura Vida segment increased $33.1 million, or 120.2%, to $5.6 million from a net loss of $(27.5) million in the comparable prior-year period. As a percentage of Pura Vida segment net revenues, operating income (loss) in the Pura Vida segment was 12.3% and (59.9)% for the twenty-six weeks ended July 29, 2023 and July 30, 2022, respectively. The increase in operating income as a percentage of Pura Vida net revenues was primarily due to goodwill and indefinite-lived Pura Vida brand impairment charges in the prior-year period of $19.4 million and $9.9 million, respectively; a decrease in marketing and advertising expenses; a decrease in employee-related expenses due to headcount reductions and cost savings initiatives; and an increase in gross margin as a percentage of net revenues as described above, including inventory adjustments for excess mask products which impacted the operating loss as a percentage of net revenues by approximately 210 basis points in the prior year. These increases were partially offset by SG&A expense deleverage associated with decreased sales.

Corporate Unallocated. For the twenty-six weeks ended July 29, 2023, unallocated expenses decreased $10.6 million, or 21.8%, to $37.9 million from $48.5 million in the comparable prior-year period. The decrease in unallocated expenses was primarily due to a reduction in severance charges of $4.0 million which included severance related to our CFO transition in the current year more than offset by severance associated with the retirement of our former CEO in the prior year that did not recur in the current year; prior year consulting fees of $2.9 million associated with cost savings initiatives and the CEO search that did not recur in the current year; a reduction in employee-related expenses of $1.8 million primarily related to lower headcount, partially offset by an increase in incentive compensation expense as a result of Company performance estimates; $0.6 million for a lease right-of-use asset charge in the prior year that did not recur in the current year; and $1.1 million in other net corporate expense reductions including a reduction in information technology contracts, corporate advertising expense, and other corporate expenses.

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Income Tax Expense (Benefit)

The effective tax rate for the twenty-six weeks ended July 29, 2023, was 29.0%, compared to 14.7% for the twenty-six weeks ended July 30, 2022. The year-over year effective tax rate increase was primarily due to the relative impact of permanent and discrete items in the current-year period compared to the prior-year period, primarily as a result of stock-based compensation, noncontrolling interest in the prior-year period, and non-deductible executive compensation.

Net Income (Loss)

For the twenty-six weeks ended July 29, 2023, net income increased $48.2 million to $4.6 million from a net loss of $(43.6) million in the comparable prior-year period due to the factors described in the captions above.

Net Loss Attributable to Redeemable Noncontrolling Interest

For the twenty-six weeks ended July 30, 2022, net loss attributable to redeemable noncontrolling interest was $(6.9) million. This represents the allocation of the Pura Vida net loss to the noncontrolling interest. On January 30, 2023, we purchased the remaining 25% interest in Pura Vida resulting in 100% ownership. As a result, there was no noncontrolling interest for the current-year period.

Net Income (Loss) Attributable to Vera Bradley, Inc.

For the twenty-six weeks ended July 29, 2023, net income attributable to Vera Bradley, Inc. increased $41.3 million to $4.6 million from net loss attributable to Vera Bradley, Inc. of $(36.7) million in the comparable prior-year period due to the factors described in the captions above.

Liquidity and Capital Resources

General

Our primary sources of liquidity are cash on hand and cash equivalents, as well as cash flow from operations. We also have access to additional liquidity, if needed, through borrowings under our $75.0 million asset-based revolving credit agreement (the “Credit Agreement”). There was no debt outstanding as of July 29, 2023. Historically, our primary cash needs have been for merchandise inventories; payroll; store rent; capital expenditures associated with operational equipment, buildings, information technology, and opening new stores; and share repurchases. The most significant components of our working capital are cash and cash equivalents, merchandise inventories, accounts receivable, accounts payable, and other current liabilities.

We believe that cash on hand and cash equivalents, cash flows from operating activities, and the availability of borrowings under our Credit Agreement or other financing arrangements will be sufficient to meet working capital requirements and anticipated capital expenditures, and other strategic uses of cash, if any, for the foreseeable future.

Cash Flow Analysis

A summary of operating, investing, and financing activities is shown in the following table (in thousands):

	Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022
Net cash provided by (used in) operating activities	$	15,975	$	(27,118)
Net cash used in investing activities	(11,727)		(4,391)
Net cash used in financing activities	(2,357)		(18,500)

Net Cash Provided by (Used in) Operating Activities

Net cash provided by (used in) operating activities consists primarily of net income (loss) adjusted for non-cash items, including depreciation, amortization, impairment charges, deferred taxes, and stock-based compensation; and the effect of changes in assets and liabilities.

Net cash provided by operating activities for the twenty-six weeks ended July 29, 2023 was $16.0 million compared to net cash used in operating activities of $27.1 million for the twenty-six weeks ended July 30, 2022. The increase in cash provided by operating activities was primarily related to an increase in net income of $48.2 million, partially offset by the change in non-cash items of $23.3 million, as well as the change in assets and liabilities. A source of cash was provided by lower inventory receipts; the timing of collection of tenant allowances associated with our store leases; a lower accounts receivable change due

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to lower sales and timing; and an increase in incentive compensation liability in the current-year period compared to the prior-year period. These sources of cash were partially offset by a lower amount of accrued liabilities for severance and cost savings initiatives; timing of accounts payable; and the change in income taxes. There was a net income tax refund of $6.8 million in the prior-year period compared to net cash payments of $0.6 million in the current-year period. Severance payments totaled $4.9 million in the current year compared to $0.9 million in the prior year.

Net Cash Used in Investing Activities

Investing activities consist primarily of investments and capital expenditures related to new store openings, buildings, operational equipment, and information technology investments.

Net cash used in investing activities was $11.7 million for the twenty-six weeks ended July 29, 2023 compared to $4.4 million for the twenty-six weeks ended July 30, 2022. The increase in cash used in investing activities was a result of the purchase of the remaining 25% interest in Pura Vida for $10.0 million, partially offset by a decline in property, plant, and equipment spending primarily as a result of a lower amount of new store construction in the current year and Vera Bradley relocations in the prior year that did not recur.

Capital expenditures for fiscal 2024 are expected to be approximately $5.0 million.

Net Cash Used in Financing Activities

Net cash used in financing activities was $2.4 million for the twenty-six weeks ended July 29, 2023 compared to $18.5 million for the twenty-six weeks ended July 30, 2022. The decrease in cash used in financing activities was primarily due to $1.4 million of common stock repurchases in the current-year period compared to $16.5 million in the comparable prior-year period.

Credit Agreement

On September 7, 2018, Vera Bradley Designs, Inc. (“VBD”), a wholly-owned subsidiary of the Company, entered into an asset-based revolving Credit Agreement (the “Credit Agreement”) among VBD, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto. The Credit Agreement provides for certain credit facilities to VBD in an aggregate principal amount not to initially exceed the lesser of $75.0 million or the amount of borrowing availability determined in accordance with a borrowing base of certain assets. Borrowings under the credit facilities are available to finance general corporate purposes of VBD and its subsidiaries, including but not limited to Vera Bradley International, LLC and Vera Bradley Sales, LLC (collectively, the “Named Subsidiaries”). The Credit Agreement also contains an option for VBD to arrange with lenders to increase the aggregate principal amount by up to $25.0 million.

On August 3, 2023, subsequent to the end of the second quarter, certain subsidiaries of the Company, JP Morgan Chase Bank, N.A., as the administrative agent, and lenders from time to time party thereto, entered into a Third Amendment (the “Third Amendment”) to the Credit Agreement.

For further information regarding the Credit Agreement and the Third Amendment, please see Note 6 of the Notes to Condensed Consolidated Financial Statements herein.

Material Cash Requirements

As of July 29, 2023, there were no material changes outside the ordinary course of business to material cash requirements, as disclosed in our Annual Report on Form 10-K for the fiscal year ended January 28, 2023.

Off-Balance-Sheet Arrangements

We do not have any off-balance-sheet financing or unconsolidated special-purpose entities.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as the related disclosures of contingent assets and liabilities at the date of the financial statements. A summary of the Company’s significant accounting policies is included in Note 2 to the Company’s consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2023.

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Certain accounting policies and estimates of the Company are considered critical, as these policies and estimates are the most important to the depiction of the Company’s consolidated financial statements and require significant, difficult, or complex judgments, often about the effect of matters that are inherently uncertain. Such policies are summarized in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2023. There were no significant changes to any of the critical accounting policies and estimates described in the Annual Report as of July 29, 2023.

Recently Issued Accounting Pronouncements

Refer to Note 1 “Description of the Company and Basis of Presentation” within Item 1 “Financial Statements” of this Quarterly Report on Form 10-Q for a discussion of recently issued accounting pronouncements.

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ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of July 29, 2023, there was no material change in the market risks described in “Quantitative and Qualitative Disclosures About Market Risks” in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2023.

ITEM 4.    CONTROLS AND PROCEDURES

At the end of the period covered by this Quarterly Report on Form 10-Q, the Company carried out an evaluation, under the supervision and with the participation of the Company’s Disclosure Committee and management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a-15 of the Securities Exchange Act of 1934. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of July 29, 2023.

There has been no change in our internal control over financial reporting during the most recent fiscal quarter that has materially affected, or that is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

In August of 2019, Vesi Incorporated (“Vesi”) filed suit against the Company in the U.S. District Court for the Southern District of Ohio related to the Company’s licensing business and alleging breach of fiduciary duty, unfair competition, defamation, and tortious interference with prospective business relationships. The complaint sought damages in an amount not less than $10.0 million for punitive damages, attorney fees, prejudgment interest, and any other additional relief. In November 2019, the Company filed a counterclaim against the principals of Vesi as personal guarantors for monies owed to the Company by Vesi. The Company filed a motion for summary judgement asking the Court to dismiss all claims with prejudice and grant judgement on its counterclaim. On January 4, 2023, the Court granted the Company’s motion for summary judgment dismissing Vesi’s claims and also granted judgment on the Company’s counterclaims against the principals of Vesi for an immaterial amount. Vesi has appealed this decision. At this time, we are not able to estimate a possible loss or range of loss that may result from this matter or to determine whether such loss, if any, would have a material adverse effect on our financial condition or results of operations. The Company denies any liability and is vigorously defending itself, and management believes that the Company has a number of meritorious legal defenses.

The Company is subject to other legal proceedings from time to time in the ordinary course of business but does not believe any of these such claims would have a material adverse impact on the Company at this time.

ITEM 1A.    RISK FACTORS

There have been no material changes to the risk factors previously set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2023.

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ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In December 2021, the Company's board of directors approved a new share repurchase plan (the “2021 Share Repurchase Program”) which authorized Company management to utilize up to $50.0 million of available cash for repurchases of shares of the Company's common stock. The 2021 Share Repurchase Program was effective beginning December 13, 2021 and expires in December 2024.

Details regarding the activity under the program during the thirteen weeks ended July 29, 2023 are as follows:

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Program
April 30, 2023 - May 27, 2023	47,620	$	5.25	47,620	$	26,748,176
May 28, 2023 - July 1, 2023	44,100	5.72		44,100	26,496,016
July 2, 2023 - July 29, 2023	28,500	6.34		28,500	26,315,414
	120,220	$	5.68	120,220

ITEM 5.    OTHER INFORMATION

Securities Trading Plans of Directors and Executive Officers

During the thirteen weeks ended July 29, 2023, none of the Company’s directors or executive officers adopted or terminated any contract, instruction, or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

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ITEM 6.    EXHIBITS

a. Exhibits

 

Exhibit No.		Description
31.1		CEO Section 302 Certification
31.2		CFO Section 302 Certification
32.1		Section 906 Certifications*
101.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
*	Furnished, not filed.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	Vera Bradley, Inc. (Registrant)
Date: September 6, 2023	/s/ Michael Schwindle
	Michael Schwindle
	Chief Financial Officer

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EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Jacqueline Ardrey, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Vera Bradley, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 6, 2023	/s/ Jacqueline Ardrey
	Jacqueline Ardrey
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Michael Schwindle, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Vera Bradley, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 6, 2023	/s/ Michael Schwindle
	Michael Schwindle
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

    I, Jacqueline Ardrey, the Chief Executive Officer of Vera Bradley, Inc., certify that (i) the quarterly report on Form 10-Q for the fiscal quarter ended July 29, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Vera Bradley, Inc. as of the dates and for the periods set forth therein.

/s/ Jacqueline Ardrey

Jacqueline Ardrey

Chief Executive Officer

September 6, 2023

Date

    I, Michael Schwindle, the Chief Financial Officer of Vera Bradley, Inc., certify that (i) the quarterly report on Form 10-Q for the fiscal quarter ended July 29, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Vera Bradley, Inc. as of the dates and for the periods set forth therein.

/s/ Michael Schwindle

Michael Schwindle

Chief Financial Officer

September 6, 2023

Date

XML

Cover page - shares	6 Months Ended
	Jul. 29, 2023	Aug. 30, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jul. 29, 2023
Document Transition Report	false
Entity File Number	001-34918
Entity Registrant Name	VERA BRADLEY, INC.
Entity Incorporation, State or Country Code	IN
Entity Tax Identification Number	27-2935063
Entity Address, Address Line One	12420 Stonebridge Road
Entity Address, City or Town	Roanoke
Entity Address, State or Province	IN
Entity Address, Postal Zip Code	46783
City Area Code	(877)
Local Phone Number	708-8372
Title of 12(b) Security	Common Stock, without par value
Trading Symbol	VRA
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		30,822,993
Amendment Flag	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001495320
Current Fiscal Year End Date	--02-03

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jul. 29, 2023	Jan. 28, 2023
Current assets:
Cash and cash equivalents	$ 48,522	$ 46,595
Accounts receivable, net	23,944	22,105
Inventories	139,301	142,275
Income taxes receivable	2,180	1,311
Prepaid expenses and other current assets	14,625	14,276
Total current assets	228,572	226,562
Operating right-of-use assets	69,932	77,954
Property, plant, and equipment, net	56,127	58,674
Intangible assets, net	14,460	15,918
Deferred income taxes	20,014	21,542
Other assets	2,395	3,851
Total assets	391,500	404,501
Current liabilities:
Accounts payable	21,605	20,350
Accrued employment costs	12,965	14,312
Short-term operating lease liabilities	19,587	19,714
Other accrued liabilities	13,496	12,723
Income taxes payable	528	558
Total current liabilities	68,181	67,657
Long-term operating lease liabilities	66,718	74,664
Other long-term liabilities	82	90
Total liabilities	134,981	142,411
Commitments and contingencies
Redeemable noncontrolling interest	0	10,712
Shareholders’ equity:
Preferred stock; 5,000 shares authorized, no shares issued or outstanding	0	0
Common stock, without par value; 200,000 shares authorized, 43,176 and 42,846 shares issued and 30,848 and 30,766 shares outstanding, respectively	0	0
Additional paid-in-capital	111,663	109,718
Retained earnings	279,204	274,629
Accumulated other comprehensive loss	(69)	(105)
Treasury stock	(134,279)	(132,864)
Total shareholders’ equity of Vera Bradley, Inc.	256,519	251,378
Total liabilities, redeemable noncontrolling interest, and shareholders’ equity	$ 391,500	$ 404,501

XML

Consolidated Balance Sheets (Parenthetical) - shares	Jul. 29, 2023	Jan. 28, 2023
Statement of Financial Position [Abstract]
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, shares authorized (in shares)	200,000,000	200,000,000
Common stock, shares issued (in shares)	43,176,000	42,846,000
Common stock, shares outstanding (in shares)	30,848,000	30,766,000

XML

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 29, 2023	Jul. 30, 2022	Jul. 29, 2023	Jul. 30, 2022
Income Statement [Abstract]
Net revenues	$ 128,172	$ 130,371	$ 222,534	$ 228,830
Cost of sales	56,156	69,854	98,769	115,799
Gross profit	72,016	60,517	123,765	113,031
Selling, general, and administrative expenses	59,405	74,042	117,911	134,956
Impairment of goodwill and intangible assets	0	29,338	0	29,338
Other income, net	260	42	631	209
Operating income (loss)	12,871	(42,821)	6,485	(51,054)
Interest expense, net	12	36	44	76
Income (loss) before income taxes	12,859	(42,857)	6,441	(51,130)
Income tax expense (benefit)	3,605	(5,956)	1,866	(7,519)
Net income (loss)	9,254	(36,901)	4,575	(43,611)
Less: Net loss attributable to redeemable noncontrolling interest	0	(7,134)	0	(6,870)
Net income (loss) attributable to Vera Bradley, Inc.	$ 9,254	$ (29,767)	$ 4,575	$ (36,741)
Basic weighted-average shares outstanding (in shares)	30,901	31,429	30,847	32,051
Diluted weighted-average shares outstanding (in shares)	31,139	31,429	31,208	32,051
Basic net income (loss) per share (in dollars per share)	$ 0.30	$ (0.95)	$ 0.15	$ (1.15)
Diluted net income (loss) per share (in dollars per share)	$ 0.30	$ (0.95)	$ 0.15	$ (1.15)

XML

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 29, 2023	Jul. 30, 2022	Jul. 29, 2023	Jul. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 9,254	$ (36,901)	$ 4,575	$ (43,611)
Cumulative translation adjustment	46	(75)	36	(106)
Comprehensive income (loss), net of tax	9,300	(36,976)	4,611	(43,717)
Less: Comprehensive loss attributable to redeemable noncontrolling interest	0	(7,134)	0	(6,870)
Comprehensive income (loss) attributable to Vera Bradley, Inc.	$ 9,300	$ (29,842)	$ 4,611	$ (36,847)

XML

Condensed Consolidated Statements of Shareholders’ Equity - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss
Common stock (shares) outstanding, balance at the beginning of the period at Jan. 29, 2022		33,170,430
Treasury stock (shares), balance at the beginning of the period at Jan. 29, 2022			9,258,741
Balance at the beginning of the period at Jan. 29, 2022	$ 327,440		$ (114,802)	$ 107,907	$ 334,364	$ (29)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss) attributable to Vera Bradley, Inc.	(6,974)				(6,974)
Translation adjustments	(31)					(31)
Restricted shares vested, net of repurchase for taxes (in shares)		404,469
Restricted shares vested, net of repurchase for taxes	(1,410)			(1,410)
Stock-based compensation	543			543
Treasury stock purchased (in shares)		1,423,096	(1,423,096)
Treasury stock purchased	(10,454)		$ (10,454)
Common stock (shares) outstanding, balance at the end of the period at Apr. 30, 2022		32,151,803
Treasury stock (shares), balance at the end of the period at Apr. 30, 2022			10,681,837
Balance at the end of the period at Apr. 30, 2022	309,114		$ (125,256)	107,040	327,390	(60)
Common stock (shares) outstanding, balance at the beginning of the period at Jan. 29, 2022		33,170,430
Treasury stock (shares), balance at the beginning of the period at Jan. 29, 2022			9,258,741
Balance at the beginning of the period at Jan. 29, 2022	327,440		$ (114,802)	107,907	334,364	(29)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss) attributable to Vera Bradley, Inc.	(36,741)
Common stock (shares) outstanding, balance at the end of the period at Jul. 30, 2022		31,165,869
Treasury stock (shares), balance at the end of the period at Jul. 30, 2022			11,667,860
Balance at the end of the period at Jul. 30, 2022	274,150		$ (131,279)	107,941	297,623	(135)
Common stock (shares) outstanding, balance at the beginning of the period at Apr. 30, 2022		32,151,803
Treasury stock (shares), balance at the beginning of the period at Apr. 30, 2022			10,681,837
Balance at the beginning of the period at Apr. 30, 2022	309,114		$ (125,256)	107,040	327,390	(60)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss) attributable to Vera Bradley, Inc.	(29,767)				(29,767)
Translation adjustments	(75)					(75)
Restricted shares vested, net of repurchase for taxes (in shares)		89
Restricted shares vested, net of repurchase for taxes	0			0
Stock-based compensation	901			901
Treasury stock purchased (in shares)		986,023	(986,023)
Treasury stock purchased	(6,023)		$ (6,023)
Common stock (shares) outstanding, balance at the end of the period at Jul. 30, 2022		31,165,869
Treasury stock (shares), balance at the end of the period at Jul. 30, 2022			11,667,860
Balance at the end of the period at Jul. 30, 2022	$ 274,150		$ (131,279)	107,941	297,623	(135)
Common stock (shares) outstanding, balance at the beginning of the period at Jan. 28, 2023	30,766,000	30,766,024
Treasury stock (shares), balance at the beginning of the period at Jan. 28, 2023			12,079,690
Balance at the beginning of the period at Jan. 28, 2023	$ 251,378		$ (132,864)	109,718	274,629	(105)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss) attributable to Vera Bradley, Inc.	(4,679)				(4,679)
Translation adjustments	(10)					(10)
Restricted shares vested, net of repurchase for taxes (in shares)		330,500
Restricted shares vested, net of repurchase for taxes	(942)			(942)
Purchase of noncontrolling interest equity adjustment	1,286			1,286
Stock-based compensation	691			691
Treasury stock purchased (in shares)		(128,100)	(128,100)
Treasury stock purchased	(732)		$ (732)
Common stock (shares) outstanding, balance at the end of the period at Apr. 29, 2023		30,968,424
Treasury stock (shares), balance at the end of the period at Apr. 29, 2023			12,207,790
Balance at the end of the period at Apr. 29, 2023	$ 246,992		$ (133,596)	110,753	269,950	(115)
Common stock (shares) outstanding, balance at the beginning of the period at Jan. 28, 2023	30,766,000	30,766,024
Treasury stock (shares), balance at the beginning of the period at Jan. 28, 2023			12,079,690
Balance at the beginning of the period at Jan. 28, 2023	$ 251,378		$ (132,864)	109,718	274,629	(105)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss) attributable to Vera Bradley, Inc.	$ 4,575
Common stock (shares) outstanding, balance at the end of the period at Jul. 29, 2023	30,848,000	30,848,293
Treasury stock (shares), balance at the end of the period at Jul. 29, 2023	12,328,010		12,328,010
Balance at the end of the period at Jul. 29, 2023	$ 256,519		$ (134,279)	111,663	279,204	(69)
Common stock (shares) outstanding, balance at the beginning of the period at Apr. 29, 2023		30,968,424
Treasury stock (shares), balance at the beginning of the period at Apr. 29, 2023			12,207,790
Balance at the beginning of the period at Apr. 29, 2023	246,992		$ (133,596)	110,753	269,950	(115)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss) attributable to Vera Bradley, Inc.	9,254				9,254
Translation adjustments	46					46
Restricted shares vested, net of repurchase for taxes (in shares)		89
Stock-based compensation	910			910
Treasury stock purchased (in shares)		(120,220)	(120,220)
Treasury stock purchased	$ (683)		$ (683)
Common stock (shares) outstanding, balance at the end of the period at Jul. 29, 2023	30,848,000	30,848,293
Treasury stock (shares), balance at the end of the period at Jul. 29, 2023	12,328,010		12,328,010
Balance at the end of the period at Jul. 29, 2023	$ 256,519		$ (134,279)	$ 111,663	$ 279,204	$ (69)

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jul. 29, 2023	Jul. 30, 2022
Cash flows from operating activities
Net income (loss)	$ 4,575	$ (43,611)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation of property, plant, and equipment	4,070	4,371
Amortization of operating right-of-use assets	10,501	10,621
Impairment of goodwill and intangible assets	0	29,338
Other impairment charges	0	1,351
Amortization of intangible assets	1,458	1,537
Provision for doubtful accounts	17	(119)
Stock-based compensation	1,601	1,444
Deferred income taxes	2,102	(5,419)
Other non-cash loss, net	40	0
Changes in assets and liabilities:
Accounts receivable	(1,856)	(4,793)
Inventories	2,974	(34,676)
Prepaid expenses and other assets	1,107	348
Accounts payable	1,403	12,759
Income taxes	(899)	4,652
Operating lease liabilities, net	(10,552)	(12,910)
Accrued and other liabilities	(566)	7,989
Net cash provided by (used in) operating activities	15,975	(27,118)
Cash flows from investing activities
Purchases of property, plant, and equipment	(1,727)	(4,391)
Cash paid for business acquisition	(10,000)	0
Net cash used in investing activities	(11,727)	(4,391)
Cash flows from financing activities
Tax withholdings for equity compensation	(942)	(1,410)
Repurchase of common stock	(1,415)	(16,477)
Distributions to redeemable noncontrolling interest	0	(613)
Net cash used in financing activities	(2,357)	(18,500)
Effect of exchange rate changes on cash and cash equivalents	36	(106)
Net increase (decrease) in cash and cash equivalents	1,927	(50,115)
Cash and cash equivalents, beginning of period	46,595	88,436
Cash and cash equivalents, end of period	48,522	38,321
Supplemental disclosure of cash flow information
Cash paid (received) for income taxes, net	$ 662	$ (6,755)

XML

Description of the Company and Basis of Presentation

6 Months Ended

Jul. 29, 2023

Accounting Policies [Abstract]

Description of the Company and Basis of Presentation

Description of the Company and Basis of Presentation

The term “Company” refers to Vera Bradley, Inc. and its wholly owned subsidiaries, except where the context requires otherwise or where otherwise indicated.

Vera Bradley, Inc. operates two unique lifestyle brands – Vera Bradley and Pura Vida. We believe Vera Bradley and Pura Vida are complementary businesses, both with devoted, emotionally-connected, and multi-generational female customer bases; alignment as causal, comfortable, affordable, and fun brands; positioning as “gifting” and socially-connected brands; strong, entrepreneurial cultures; a keen focus on community, charity, and social consciousness; multi-channel distribution strategies; and talented leadership teams aligned and committed to the long-term success of their brands.

Vera Bradley is a leading designer of women’s handbags, luggage and travel items, fashion and home accessories, and unique gifts. Founded in 1982 by friends Barbara Bradley Baekgaard and Patricia R. Miller, the brand’s innovative designs, iconic patterns, and brilliant colors continue to inspire and connect women.

In July 2019, Vera Bradley, Inc. acquired a 75% interest in Creative Genius, Inc., which also operates under the name Pura Vida Bracelets (“Pura Vida”). On January 30, 2023, the Company purchased the remaining 25% interest in Pura Vida. Pura Vida, based in La Jolla, California, is a digitally native lifestyle brand that we believe deeply resonates with its loyal consumer following. The Pura Vida brand has a differentiated and expanding offering of bracelets, jewelry, and other lifestyle accessories.

The Company has three reportable segments: Vera Bradley Direct (“VB Direct”), Vera Bradley Indirect (“VB Indirect”), and Pura Vida.

•The VB Direct business consists of sales of Vera Bradley products through Vera Bradley full-line and factory outlet stores in the United States; verabradley.com; the Vera Bradley online outlet site; and the Vera Bradley annual outlet sale in Fort Wayne, Indiana. As of July 29, 2023, the Company operated 45 full-line stores and 80 factory outlet stores. In light of the COVID-19 pandemic, the Company cancelled its calendar year 2022 annual outlet sale. The sale resumed in June 2023.

•The VB Indirect business consists of sales of Vera Bradley products to approximately 1,700 specialty retail locations, substantially all of which are located in the United States, as well as department stores, national accounts, third-party e-commerce sites, third-party inventory liquidators, and royalties recognized through licensing agreements related to the Vera Bradley brand.

•The Pura Vida segment represents revenues generated through the Pura Vida websites, www.puravidabracelets.com, puravidabracelets.ca, and www.puravidabracelets.eu; through the distribution of Pura Vida-branded products to wholesale retailers, substantially all of which are located in the United States; and through its five retail stores.

The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as permitted by such rules and regulations. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2023, filed with the SEC.

The interim financial statements reflect all adjustments that are, in the opinion of management, necessary to present fairly the results for the interim periods presented. All such adjustments are of a normal, recurring nature. The results of operations for the thirteen and twenty-six weeks ended July 29, 2023, are not necessarily indicative of the results to be expected for the full fiscal year due to, in part, seasonal fluctuations in the business and the uncertainty of macroeconomic factors on future periods, including inflation and other related matters.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, including Pura Vida. The Company has eliminated intercompany balances and transactions in consolidation. In the prior year, Pura Vida was a majority owned subsidiary and was included in the consolidated financial statements of the Company. Refer to Notes 4 and 12 herein for additional information.

Fiscal Periods

The Company’s fiscal year ends on the Saturday closest to January 31. References to the fiscal quarters ended July 29, 2023 and July 30, 2022 refer to the thirteen week periods ended on those dates.

Recently Issued Accounting Pronouncements

There were no new accounting pronouncements issued or which became effective during the thirteen and twenty-six weeks ended July 29, 2023, which had, or are expected to have, a significant impact on the Company's Consolidated Financial Statements.

XML

Revenue from Contracts with Customers

6 Months Ended

Jul. 29, 2023

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

Revenue from Contracts with Customers

Disaggregation of Revenue

The following presents the Company's net revenues disaggregated by product category for the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022 (in thousands):

	Thirteen Weeks Ended
	July 29, 2023
	VB Direct Segment			VB Indirect Segment			Pura Vida Segment			Total
Product categories
Bags	$	35,396		$	9,628		$	176		$	45,200
Travel	19,960			3,479			—			23,439
Accessories	15,140			1,987			23,672			40,799
Home	9,138			953			—			10,091
Apparel/Footwear	4,043			323			470			4,836
Other	2,025		(1)	993		(2)	789		(3)	3,807
Total net revenues	$	85,702	(4)	$	17,363	(5)	$	25,107	(4)	$	128,172
(1) Primarily includes net revenues from stationery, freight, and gift card breakage.
(2) Primarily includes net revenues from licensing agreements and freight.
(3) Related to freight.
(4) Net revenues were related to product sales recognized at a point in time.
(5) $16.7 million of net revenues related to product sales recognized at a point in time and $0.7 million of net revenues related to sales-based royalties recognized over time.

	Thirteen Weeks Ended
	July 30, 2022
	VB Direct Segment			VB Indirect Segment			Pura Vida Segment			Total
Product categories
Bags	$	38,373		$	9,603		$	779		$	48,755
Travel	20,071			3,033			—			23,104
Accessories	15,757			2,636			23,269			41,662
Home	8,726			732			—			9,458
Apparel/Footwear(6)	2,161			360			1,359			3,880
Other	1,925		(1)	961		(2)	626		(3)	3,512
Total net revenues	$	87,013	(4)	$	17,325	(5)	$	26,033	(4)	$	130,371
(1) Primarily includes net revenues from stationery, freight, and gift card breakage.
(2) Primarily includes net revenues from licensing agreements and freight.
(3) Related to freight.
(4) Net revenues were related to product sales recognized at a point in time.
(5) $16.6 million of net revenues related to product sales recognized at a point in time and $0.7 million of net revenues related to sales-based royalties recognized over time.
(6) Includes mask sales.

	Twenty-Six Weeks Ended
	July 29, 2023
	VB Direct Segment			VB Indirect Segment			Pura Vida Segment			Total
Product categories
Bags	$	58,297		$	17,956		$	237		$	76,490
Travel	35,366			6,658			—			42,024
Accessories	25,634			3,945			42,683			72,262
Home	15,066			1,541			—			16,607
Apparel/Footwear	6,990			784			760			8,534
Other	3,254		(1)	1,852		(2)	1,511		(3)	6,617
Total net revenues	$	144,607	(4)	$	32,736	(5)	$	45,191	(4)	$	222,534
(1) Primarily includes net revenues from stationery, freight, and gift card breakage.
(2) Primarily includes net revenues from licensing agreements and freight.
(3) Related to freight.
(4) Net revenues were related to product sales recognized at a point in time.
(5) $31.3 million of net revenues related to product sales recognized at a point in time and $1.4 million of net revenues related to sales-based royalties recognized over time.

	Twenty-Six Weeks Ended
	July 30, 2022
	VB Direct Segment			VB Indirect Segment			Pura Vida Segment			Total
Product categories
Bags	$	64,505		$	19,054		$	842		$	84,401
Travel	35,159			6,106			—			41,265
Accessories	27,256			4,404			42,129			73,789
Home	14,448			1,858			—			16,306
Apparel/Footwear(6)	4,064			860			1,795			6,719
Other	3,217		(1)	2,020		(2)	1,113		(3)	6,350
Total net revenues	$	148,649	(4)	$	34,302	(5)	$	45,879	(4)	$	228,830
(1) Primarily includes net revenues from stationery, freight, and gift card breakage.
(2) Primarily includes net revenues from licensing agreements and freight.
(3) Related to freight.
(4) Net revenues were related to product sales recognized at a point in time.
(5) $32.8 million of net revenues related to product sales recognized at a point in time and $1.5 million of net revenues related to sales-based royalties recognized over time.
(6) Includes mask sales.

Contract Balances

Contract liabilities as of July 29, 2023 and January 28, 2023, were $2.5 million and $3.2 million, respectively. The balance as of July 29, 2023 and January 28, 2023 consisted of unredeemed gift cards, unearned revenue related to the monthly bracelet and jewelry clubs of the Pura Vida segment, Pura Vida loyalty club points, and Pura Vida customer deposits and payments collected before shipment. These contract liabilities are recognized within other accrued liabilities on the Company’s Condensed Consolidated Balance Sheets. Substantially all contract liabilities are recognized within one year. The Company did not have contract assets as of July 29, 2023 and January 28, 2023.

The balance for accounts receivable from contracts with customers, net of allowances, as of July 29, 2023 and January 28, 2023, was $23.4 million and $20.7 million, respectively, which is recognized within accounts receivable, net, on the Company’s Condensed Consolidated Balance Sheets. The provision for doubtful accounts was $0.8 million as of July 29, 2023 and January 28, 2023. The provision for doubtful accounts is based upon the likelihood of default expected during the life of the receivable.

Performance Obligations

The performance obligations for the VB Direct, VB Indirect, and Pura Vida segments include the promise to transfer distinct goods (or a bundle of distinct goods). The VB Indirect segment also includes the right to access intellectual property (“IP”) related to the Vera Bradley brand.

Remaining Performance Obligations

The Company does not have remaining performance obligations in excess of one year or contracts that it does not have the right to invoice as of July 29, 2023.

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Leases

6 Months Ended

Jul. 29, 2023

Leases [Abstract]

Leases

Leases

Discount Rate

The weighted-average discount rate as of July 29, 2023, and July 30, 2022 was 4.7% and 4.6%, respectively. The discount rate is not readily determinable in the lease; therefore, the Company estimated the incremental borrowing

rate, at the commencement date of each lease, which is the rate of interest it would have to borrow on a collateralized basis over a similar term with similar payments.

Leases Not Yet Commenced

As of July 29, 2023, the Company had one Vera Bradley retail store lease which was executed, but it did not have control of the underlying asset; therefore, the lease liability and right-of-use asset are not recorded on the Condensed Consolidated Balance Sheet. This lease contains undiscounted lease payments, which will be included in the determination of the lease liability, totaling approximately $2.4 million and has a term of approximately 10 years commencing in fiscal year 2024.

Amounts Recognized in the Condensed Consolidated Financial Statements

The following lease expense is recorded within cost of sales for the Asia sourcing office and certain equipment leases and within selling, general, and administrative expenses for all other leases, including retail store leases, in the Company's Condensed Consolidated Statement of Operations for the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022 (in thousands):

	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Operating lease cost	$	6,502	$	6,114	$	13,067	$	12,364
Variable lease cost	1,401		1,564		2,757		2,982
Short-term lease cost	233		102		355		316
Less: Sublease income (1)	(105)		(24)		(210)		(24)
Total net lease cost	$	8,031	$	7,756	$	15,969	$	15,638
(1) Related to the sublease of a former Company location.

The weighted-average remaining lease term as of July 29, 2023 and July 30, 2022 was 5.4 years.

Supplemental operating cash flow information was as follows (in thousands):

	Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022
Cash paid for amounts included in the measurement of operating lease liabilities	$	14,803	$	14,910
Right-of-use assets increase as a result of new and modified operating lease liabilities, net	$	2,499	$	17,225

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Earnings Per Share

6 Months Ended

Jul. 29, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic earnings per share is computed based on the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed based on the weighted-average number of common shares outstanding, plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares represent outstanding restricted stock units.

As a result of the redemption feature related to the Put/Call Agreement in the prior year, the Company recorded the prior year 25% noncontrolling interest as redeemable and classified it in temporary equity within its Condensed Consolidated Balance Sheets initially at its acquisition-date fair value. The noncontrolling interest was adjusted each reporting period for income (or loss) attributable to the noncontrolling interest. A measurement period adjustment, if any, was then made to adjust the noncontrolling interest to the higher of the redemption value or carrying value each reporting period. These adjustments were recognized through retained earnings and were not reflected in net income or net income attributable to Vera Bradley, Inc. When calculating earnings per share attributable to Vera Bradley, Inc., the Company adjusted the net income attributable to Vera Bradley, Inc. for the measurement period adjustment to the extent the redemption value exceeds the fair value of the noncontrolling interest on a cumulative basis. Refer to Note 12 for additional information regarding the purchase of the remaining 25% interest on January 30, 2023.

The components of basic and diluted earnings per share were as follows (in thousands, except per share data):

 

	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Numerator:
Net income (loss)	$	9,254	$	(36,901)	$	4,575	$	(43,611)
Less: Net loss attributable to redeemable noncontrolling interest	—		(7,134)		—		(6,870)
Net income (loss) attributable to Vera Bradley, Inc.	$	9,254	$	(29,767)	$	4,575	$	(36,741)
Denominator:
Weighted-average number of common shares (basic)	30,901		31,429		30,847		32,051
Dilutive effect of stock-based awards	238		—		361		—
Weighted-average number of common shares (diluted)	31,139		31,429		31,208		32,051
Net income (loss) per share available to Vera Bradley, Inc. common shareholders:
Basic	$	0.30	$	(0.95)	$	0.15	$	(1.15)
Diluted	$	0.30	$	(0.95)	$	0.15	$	(1.15)

For the thirteen and twenty-six weeks ended July 29, 2023, there were an immaterial number of additional shares issuable upon the vesting of restricted stock units that were excluded from the diluted share calculations because they were anti-dilutive.

For the thirteen and twenty-six weeks ended July 30, 2022, all potential common shares were excluded from the diluted share calculation because they were anti-dilutive due to the net loss in the period.

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Fair Value of Financial Instruments

6 Months Ended

Jul. 29, 2023

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date:

•Level 1 – Quoted prices in active markets for identical assets or liabilities;

•Level 2 – Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly;

•Level 3 – Unobservable inputs based on the Company’s own assumptions.

The classification of fair value measurements within the hierarchy is based upon the lowest level of input that is significant to the measurement.

The carrying amounts reflected on the Condensed Consolidated Balance Sheets for cash and cash equivalents, accounts receivable, other current assets, and accounts payable as of July 29, 2023 and January 28, 2023, approximated their fair values.

The following table details the fair value measurements of the Company's investments as of July 29, 2023 and January 28, 2023 (in thousands):

	Level 1				Level 2				Level 3
	July 29, 2023		January 28, 2023		July 29, 2023		January 28, 2023		July 29, 2023		January 28, 2023
Cash equivalents(1)	$	366	$	360	$	—	$	—	$	—	$	—
(1) Cash equivalents primarily represent a money market fund that has a maturity of three months or less at the date of purchase. Due to the short maturity, the Company believes the carrying value approximates fair value.

The Company assesses potential impairments to its long-lived assets, which includes property, plant, and equipment and lease right-of-use assets, on a quarterly basis or whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Store-level assets and right-of-use assets are grouped at the individual store-level for the purpose of the impairment assessment. Recoverability of an asset group is measured by a comparison of the carrying amount of an asset group to its estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of the asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. The fair value of the store assets is determined using the discounted future cash flow method of anticipated cash flows through the store’s lease-end date using fair value measurement inputs classified as Level 3. The fair value of right-of-use assets is estimated using market comparative information for similar properties. Level 3 inputs are derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. There were no long-lived asset impairment charges for the thirteen and twenty-six weeks ended July 29, 2023. The Company recorded $0.8 million and $1.4 million for store property, plant, and equipment impairment charges and a corporate lease right-of-use asset impairment charge for the thirteen and twenty-six weeks ended July 30, 2022, respectively.

The discounted cash flow models used to estimate the applicable fair values involve numerous estimates and assumptions that are highly subjective. Changes to these estimates and assumptions could materially impact the fair value estimates. The estimates and assumptions critical to the overall fair value estimates include: (1) estimated future cash flow generated at the store level; (2) discount rates used to derive the present value factors used in determining the fair values; and (3) market rentals at the retail store. These and other estimates and assumptions are impacted by economic conditions and our expectations and may change in the future based on period-specific facts and circumstances. If economic conditions were to deteriorate, future impairment charges may be required which may be material.

On a nonrecurring basis, assets recognized or disclosed at fair value on the consolidated financial statements include items such as property, plant, and equipment, including leasehold improvements, and operating lease assets, as well as assets related to the Pura Vida acquisition including goodwill (in the prior year) and intangible assets. These assets are measured at fair value if determined to be impaired. There were no goodwill or intangible asset impairment charges recorded during the thirteen and twenty-six weeks ended July 29, 2023. During the thirteen and twenty-six weeks

ended July 30, 2022, the Company recorded a $29.3 million impairment charge related to goodwill and the indefinite-lived Pura Vida brand asset in conjunction with its second quarter annual quantitative test. Refer to Note 13 herein for additional information.

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Debt

6 Months Ended

Jul. 29, 2023

Debt Disclosure [Abstract]

Debt

Debt

On September 7, 2018, Vera Bradley Designs, Inc. (“VBD”), a wholly-owned subsidiary of the Company, entered into an asset-based revolving Credit Agreement (the “Credit Agreement”) among VBD, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto. The Credit Agreement provides for certain credit facilities to VBD in an aggregate principal amount not to initially exceed the lesser of $75.0 million or the amount of borrowing availability determined in accordance with a borrowing base of certain assets. Any proceeds of the credit facilities will be used to finance general corporate purposes of VBD and its subsidiaries, including but not limited to Vera Bradley International, LLC and Vera Bradley Sales, LLC (collectively, the “Named Subsidiaries”). The Credit Agreement also contains an option for VBD to arrange with lenders to increase the aggregate principal amount by up to $25.0 million.

Amounts outstanding under the Credit Agreement bear interest at a per annum rate equal to either (i) for CBFR borrowings (including swingline loans), the CB Floating Rate, where the CB Floating Rate is the prime rate which shall never be less than the adjusted one month LIBOR rate on such day, plus the Applicable Rate, where the Applicable Rate is a percentage spread ranging from -1.00% to -1.50% or (ii) for each eurodollar borrowing, the Adjusted LIBO Rate, where the Adjusted LIBO Rate is the LIBO rate for such interest period multiplied by the statutory reserve rate, for the interest period in effect for such borrowing, plus the Applicable Rate, where the Applicable Rate is a percentage ranging from 1.00% to 1.30%. The applicable CB Floating Rate, Adjusted LIBO Rate, or LIBO Rate shall be determined by the administrative agent. The Credit Agreement also requires VBD to pay a commitment fee for the unused portion of the revolving facility of up to 0.20% per annum.

VBD’s obligations under the Credit Agreement are guaranteed by the Company and the Named Subsidiaries. The obligations of VBD under the Credit Agreement are secured by substantially all of the respective assets of VBD, the Company, and the Named Subsidiaries and are further secured by the equity interests in VBD and the Named Subsidiaries.

The Credit Agreement contains various affirmative and negative covenants, including restrictions on the Company's ability to incur debt or liens; engage in mergers or consolidations; make certain investments, acquisitions, loans, and advances; sell assets; enter into certain swap agreements; pay dividends or make distributions or make other restricted payments; engage in certain transactions with affiliates; and amend, modify, or waive any of its rights related to subordinated indebtedness and certain charter and other organizational, governing, and material agreements. The Company may avoid certain of such restrictions by meeting payment conditions defined in the Credit Agreement.

The Credit Agreement also requires the Loan Parties to maintain a minimum fixed charge coverage ratio of 1.00 during periods when borrowing availability is less than the greater of (A) approximately $7.5 million, and (B) 10% of the lesser of (i) the aggregate revolving commitment, and (ii) the borrowing base. The fixed charge coverage ratio, availability, aggregate revolving commitment, and the borrowing base are further defined in the Credit Agreement.

The Credit Agreement contains customary events of default, including, among other things: (i) the failure to pay any principal, interest, or other fees under the Credit Agreement; (ii) the making of any materially incorrect representation or warranty; (iii) the failure to observe or perform any covenant, condition, or agreement in the Credit Agreement or related agreements; (iv) a cross default with respect to other material indebtedness; (v) bankruptcy and insolvency events; (vi) unsatisfied material final judgments; (vii) Employee Retirement Income Security Act of 1974 (“ERISA”) events that could reasonably be expected to have a material adverse effect; and (viii) a change in control (as defined in the Credit Agreement).

As of July 29, 2023 and January 28, 2023, the Company had no borrowings outstanding and availability of $75.0 million under the Credit Agreement.

Subsequent Event

Subsequent to the end of the second quarter, on August 3, 2023, certain subsidiaries of the Company, JP Morgan Chase Bank, N.A., as the administrative agent, and lenders from time to time party thereto, entered into a Third Amendment (the “Third Amendment”) to the Credit Agreement dated September 7, 2018.

The Third Amendment amended the Credit Agreement to, among other things: extend the maturity date to May 2028; add Creative Genius, LLC as a borrower; increase an option for the borrowers to arrange with lenders to increase the aggregate principal amount by up to $50.0 million; update the commitment fee rate to 0.20% or 0.30% depending on the average quarterly utilization; update the interest rate per annum for the CB Floating Rate to the greater of the prime rate or 2.5% and remove references to the London Interbank Offered Rate (“LIBOR”) (in the case of a CBFR borrowings including swingline loans); remove references to eurodollar borrowings and replace with term benchmark borrowings where the interest rate per annum is the adjusted term Secured Overnight Financing Rate (“SOFR”), as defined in the Third Amendment to the Credit Agreement; and add RFR borrowings where the interest rate per annum is the adjusted daily simple SOFR, as defined in the Third Amendment to the Credit Agreement.

The Third Amendment also modified the periods that the fixed charge coverage ratio is not permitted to be less than 1.00. The borrowers are required to maintain the fixed charge coverage ratio for periods when borrowing availability is less than the greater of (A) approximately $9.4 million, and (B) 12.5% of the lesser of (i) the aggregate revolving commitment, and (ii) the borrowing base. The fixed charge coverage ratio, availability, aggregate revolving commitment, and the borrowing base are further defined in the Credit Agreement.

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Income Taxes

6 Months Ended

Jul. 29, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision for income taxes for interim periods is based on an estimate of the annual effective tax rate adjusted to reflect the impact of discrete items. Management judgment is required in projecting ordinary income to estimate the Company’s annual effective tax rate.

The effective tax rate for the thirteen weeks ended July 29, 2023, was 28.0%, compared to 13.9% for the thirteen weeks ended July 30, 2022. The year-over-year effective tax rate increase was primarily due to the relative impact of permanent items in the current-year period compared to the prior-year period, primarily as a result of noncontrolling interest in the prior-year period and non-deductible executive compensation.

The effective tax rate for the twenty-six weeks ended July 29, 2023, was 29.0%, compared to 14.7% for the twenty-six weeks ended July 30, 2022. The year-over-year effective tax rate increase was primarily due to the relative impact of permanent and discrete items in the current-year period compared to the prior-year period, primarily as a result of stock-based compensation, noncontrolling interest in the prior-year period, and non-deductible executive compensation.

Refer to Note 12 herein for information regarding the deferred income tax adjustment associated with the purchase of the remaining 25% interest in Pura Vida on January 30, 2023.

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Stock-Based Compensation

6 Months Ended

Jul. 29, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The Company recognizes stock-based compensation expense, for its awards of restricted stock units, in an amount equal to the fair market value of the underlying stock on the grant date of the respective award.

The Company reserved 6,000,000 shares of common stock for issuance or transfer under the 2020 Equity and Incentive Plan, as amended, which allows for grants of restricted stock units, as well as other equity awards. The Company maintains the 2010 Equity and Incentive Plan for awards granted prior to the effectiveness of the 2020 Equity and Incentive Plan.

Awards of Restricted Stock Units

During the thirteen weeks ended July 29, 2023, the Company granted 195,617 time-based and performance-based restricted stock units with an aggregate fair value of $1.1 million to certain employees under the 2020 Equity and Incentive Plan. The company did not grant restricted stock units during the thirteen weeks ended July 30, 2022.

During the twenty-six weeks ended July 29, 2023, the Company granted 738,187 time-based and performance-based restricted stock units with an aggregate fair value of $4.3 million to certain employees and non-employee directors under the 2020 Equity and Incentive Plan compared to 841,369 time-based and performance-based restricted stock units with an aggregate fair value of $6.3 million in the same period of the prior year.

The majority of the time-based restricted stock units vest and settle in shares of the Company’s common stock, on a one-for-one basis, in equal installments on each of the first three anniversaries of the grant date. Restricted stock units issued to non-employee directors vest after a one-year period from the grant date. The Company recognizes the expense relating to these units, net of estimated forfeitures, on a straight-line basis over the vesting period.

Performance-based restricted stock units vest upon the completion of a three-year period of time (cliff vesting), subject to the employee’s continuing employment throughout and the Company’s achievement of annual earnings per share targets, or other Company performance targets, during the three-year performance period. The Company recognizes the expense relating to these units, net of estimated forfeitures, based on the probable outcome of achievement of the financial targets, on a straight-line basis over three years.

The following table sets forth a summary of restricted stock unit activity for the twenty-six weeks ended July 29, 2023 (units in thousands):

 

	Time-based Restricted Stock Units			Performance-based Restricted Stock Units
	Number of Units	Weighted- Average Grant Date Fair Value (per unit)		Number of Units	Weighted- Average Grant Date Fair Value (per unit)
Nonvested units outstanding at January 28, 2023	965	$	5.74	523	$	4.71
Granted	423	5.87		315	5.82
Vested	(396)	6.93		(94)	4.08
Forfeited	(142)	6.07		(87)	6.91
Nonvested units outstanding at July 29, 2023	850	$	5.20	657	$	5.04

As of July 29, 2023, there was $5.9 million of total unrecognized compensation cost, net of estimated forfeitures, related to nonvested restricted stock units. That cost is expected to be recognized over a weighted-average period of 2.2 years, subject to meeting performance conditions.

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Commitments and Contingencies

6 Months Ended

Jul. 29, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The Company is subject to various claims and contingencies arising in the normal course of business, including those relating to product liability, legal claims, employee benefits, environmental issues, and other matters. Management believes that at this time it is not probable that any of these claims will have a material adverse effect on the Company’s financial condition, results of operations, or cash flows. However, the outcomes of legal proceedings and claims brought against the Company are subject to uncertainty, and future developments could cause these actions or claims, individually or in aggregate, to have a material adverse effect on the Company’s financial condition, results of operations, or cash flows of a particular reporting period.

In August 2019, Vesi Incorporated (“Vesi”) filed suit against the Company in the U.S. District Court for the Southern District of Ohio related to the Company’s licensing business and alleging breach of fiduciary duty, unfair competition, defamation, and tortious interference with prospective business relationships. The complaint sought damages in an amount not less than $10.0 million for punitive damages, attorney fees, prejudgment interest, and any other additional relief. In November 2019, the Company filed a counterclaim against the principals of Vesi as personal guarantors for monies owed to the Company by Vesi. The Company filed a motion for summary judgement asking the Court to dismiss all claims with prejudice and grant judgement on its counterclaim. On January 4, 2023, the Court granted the Company’s motion for summary judgment dismissing Vesi’s claims and also granted judgment on the Company’s counterclaims against the principals of Vesi for an immaterial amount. Vesi has appealed this decision. At this time, we are not able to estimate a possible loss or range of loss that may result from this matter or to determine whether such loss, if any, would have a material adverse effect on our financial condition or results of operations. The Company is vigorously defending itself and management believes that the Company has a number of meritorious legal defenses.

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Common Stock

6 Months Ended

Jul. 29, 2023

Equity [Abstract]

Common Stock

Common Stock

In December 2021, the Company's board of directors approved a share repurchase plan (the “2021 Share Repurchase Program”) which authorized Company management to utilize up to $50.0 million of available cash for repurchases of shares of the Company's common stock. The 2021 Share Repurchase Program went into effect beginning December 13, 2021 and expires in December 2024.

The Company purchased 248,320 shares at an average price of $5.70 per share, excluding commissions, for an aggregate amount of $1.4 million during the twenty-six weeks ended July 29, 2023 under the 2021 Share Repurchase Program. There was $26.3 million remaining available to repurchase shares of the Company's common stock under the 2021 Share Repurchase Program as of July 29, 2023.

As of July 29, 2023, the Company held as treasury shares 12,328,010 shares of its common stock at an average price of $10.89 per share, excluding commissions, for an aggregate carrying amount of $134.3 million. The Company’s treasury shares may be issued under the 2010 Equity and Incentive Plan (with respect to outstanding awards under that plan), under the 2020 Equity and Incentive Plan, or for other corporate purposes.

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Cloud Computing Arrangements	6 Months Ended
	Jul. 29, 2023
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Cloud Computing Arrangements	Cloud Computing ArrangementsThe Company capitalizes implementation costs associated with its Cloud Computing Arrangements (“CCA”) consistent with costs capitalized for internal-use software. The CCA costs are amortized over the term of the related hosting agreement, taking into consideration renewal options, if any. The renewal period is included in the amortization period if determined that the option is reasonably certain to be exercised. The amortization expense is recorded within selling, general, and administrative expenses in the Company's Condensed Consolidated Statements of Operations, which is within the same line item as the related hosting fees. The balance of the unamortized CCA implementation costs totaled $4.9 million and $6.4 million as of July 29, 2023 and January 28, 2023, respectively. Of this total, $2.8 million and $3.0 million was recorded within prepaid expenses and other current assets and $2.1 million and $3.4 million was recorded within other assets on the Company's Condensed Consolidated Balance Sheets as of July 29, 2023 and January 28, 2023, respectively. The CCA implementation costs are recorded within operating activities in the Company's Condensed Consolidated Statements of Cash Flows.

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Redeemable Noncontrolling Interest

6 Months Ended

Jul. 29, 2023

Temporary Equity Disclosure [Abstract]

Redeemable Noncontrolling Interest

Redeemable Noncontrolling Interest

Redeemable noncontrolling interest represented the remaining twenty-five percent (25%) interest in Pura Vida not acquired by the Company until January 30, 2023.

On July 16, 2019, the Company purchased 75% of Pura Vida's outstanding equity interest and entered into a Put/Call Agreement with the Sellers (the “Put/Call Agreement”) providing for certain rights with respect to the purchase by the Company and sale by the Sellers of the Remaining Pura Vida Interests. On January 23, 2023, the Company and certain of its subsidiaries entered into an Interest Purchase Agreement (the “Interest Purchase Agreement”) with Creative Genius Holdings, Inc. a California corporation, Creative Genius Investments, Inc., a California corporation, Griffin Thall, and Paul Goodman (collectively “Sellers”) to purchase the remaining 25% of the outstanding membership interests (the “Remaining Pura Vida Interests”) of Creative Genius, LLC, a California limited liability company (“Pura Vida”).

Pursuant to the Interest Purchase Agreement, and subject to the terms and conditions thereof, on the closing date (January 30, 2023), the Company acquired the Remaining Pura Vida Interests (the “Transaction”) in exchange for cash consideration consisting of $10.0 million paid at closing, subject to certain adjustments. The Transaction was not subject to financing conditions. The Company’s existing available cash and cash equivalents funded the purchase price. Following completion of the Transaction, the Company owns 100% of the ownership interests in Pura Vida.

The Interest Purchase Agreement provides that, as of the closing of the Transaction, all rights and obligations of the Company and the Sellers under any agreements among the parties, including the Put/Call Agreement, were terminated.

As a result of the Transaction, the Company recorded a decrease to redeemable noncontrolling interest of $10.7 million. The difference between the fair value of the consideration paid and the balance of the redeemable noncontrolling interest resulted in $0.7 million recognized in additional paid-in capital (“APIC”) during the thirteen weeks ended April 29, 2023. In addition, there was an APIC adjustment of $0.6 million related to deferred income

taxes for the purchase of the redeemable noncontrolling interest. The total APIC adjustment for this matter during the thirteen weeks ended April 29, 2023, was $1.3 million. Changes in redeemable noncontrolling interest for the twenty-six weeks ended July 29, 2023, were as follows (in thousands):    

Balance at January 28, 2023	$	10,712
Adjustment for purchase of noncontrolling interest	(10,712)
Balance at April 29, 2023 and July 29, 2023	$	—

Changes in redeemable noncontrolling interest for the thirteen and twenty-six weeks ended July 30, 2022, were as follows (in thousands):

Balance at January 29, 2022	$	30,974
Net income attributable to redeemable noncontrolling interest	264
Distributions to redeemable noncontrolling interest	(146)
Balance at April 30, 2022	$	31,092
Net loss attributable to redeemable noncontrolling interest	(7,134)
Distributions to redeemable noncontrolling interest	(467)
Balance at July 30, 2022	$	23,491

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Intangible Assets and Goodwill

6 Months Ended

Jul. 29, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

Intangible Assets and Goodwill

The following tables detail the carrying value of the Company's intangible assets other than goodwill related to the acquisition of a majority interest in Pura Vida. On January 30, 2023, the Company purchased the remaining 25% interest in Pura Vida.

	July 29, 2023
in thousands	Gross Basis		Accumulated Amortization(1)		Carrying Amount
Definite-lived intangible assets
Customer Relationships	$	24,208	$	(21,414)	$	2,794
Non-competition Agreements	788		(788)		—
Total definite-lived intangible assets	24,996		(22,202)		2,794
Indefinite-lived intangible asset
Pura Vida Brand (2)	11,666		—		11,666
Total intangible assets, excluding goodwill	$	36,662	$	(22,202)	$	14,460
(1) Amortization expense is recorded within the Pura Vida segment.
(2) Impairment charges of $9.9 million and $15.1 million were recorded within the Pura Vida segment during the second and fourth quarters of fiscal 2023.

	January 28, 2023
in thousands	Gross Basis		Accumulated Amortization(1)		Carrying Amount
Definite-lived intangible assets
Customer Relationships	$	24,208	$	(19,956)	$	4,252
Non-competition Agreements	788		(788)		—
Total definite-lived intangible assets	24,996		(20,744)		4,252
Indefinite-lived intangible asset
Pura Vida Brand (2)	11,666		—		11,666
Total intangible assets, excluding goodwill	$	36,662	$	(20,744)	$	15,918
(1) Amortization expense is recorded within the Pura Vida segment.
(2) Impairment charges of $9.9 million and $15.1 million were recorded within the Pura Vida segment during the second and fourth quarters of fiscal 2023.

Amortization expense is recorded within selling, general, and administrative expenses in the Company's Condensed Consolidated Statement of Operations. The future amortization expense for intangible assets is as follows (in thousands):

	Amortization Expense
Fiscal 2024 (remaining six months)	1,458
Fiscal 2025	1,336
Total	$	2,794

There was no goodwill balance as of July 29, 2023 and January 28, 2023 due to impairment charges recorded during fiscal 2023.

The Company performs its annual impairment test of the indefinite-lived Pura Vida brand during the second quarter of each fiscal year. The annual test included goodwill in prior years.

The fair value of the Pura Vida brand was estimated using a relief-from-royalty method. The estimates and assumptions used in the determination of the fair value of the Pura Vida brand included the projected revenue growth, long-term growth rate, the royalty rate, and discount rate.

For the prior year test, the fair value of the Pura Vida reporting unit was determined using a combination of an income-based approach (discounted cash flows) and a market-based approach (guideline transaction method). The discounted cash flow method involved subjective estimates and assumptions such as projected revenue growth, operating profit, and the discount rate. The guideline transaction method involved transaction multiples derived from the acquisition of controlling interests in stocks of companies that are engaged in the same or similar lines of business as the reporting unit.

During the assessment for the fiscal 2024 test, it was determined that the fair value of the Pura Vida brand exceeded its carrying value and no impairment charge was recorded. During the prior year test, the Company recorded an impairment charge of $9.9 million and $19.4 million for the Pura Vida brand and goodwill, respectively, for the thirteen and twenty-six weeks ended July 30, 2022 within the Pura Vida segment.

While we consider our assumptions in the determination of the fair value of these assets to be reasonable, they are complex and highly subjective. Adverse changes in key assumptions in future periods may result in further declines in the fair value estimates of the Pura Vida brand below its carrying value resulting in additional impairment charges, which could be material. Our key assumptions (as described above in the valuation methodologies used in the determination of fair value) may be impacted by macroeconomic conditions, including inflationary pressures and the impact on consumer discretionary spending, as well as a sustained decline in stock price and potential changes in business strategy. Refer to Note 5 herein for additional information regarding the fair value measurement.

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Cost Saving Initiatives and Other Charges

6 Months Ended

Jul. 29, 2023

Restructuring and Related Activities [Abstract]

Cost Saving Initiatives and Other Charges

Cost Savings Initiatives and Other Charges

Cost Savings Initiatives and Severance Charges

During fiscal 2023, the Company began implementation of its targeted cost reductions, which are expected to be fully realized in fiscal 2025. Expense savings are being derived across various areas of the Company, including retail store efficiencies, marketing expenses, information technology contracts, professional services, logistics and operational costs, and corporate payroll.

The Company incurred the following charges during the thirteen weeks ended July 29, 2023 (in thousands):

	Reportable Segment
	VB Direct		VB Indirect		Pura Vida		Unallocated Corporate Expenses		Total Expense
Severance charges	$	—	$	—	$	79	$	—	$	79
Consulting fees and other costs (1)	—		—		—		—		—
Total (2)	$	—	$	—	$	79	$	—	$	79
(1) Related to professional fees
(2) Recorded within selling, general, and administrative ("SG&A") expenses

The Company incurred the following charges during the thirteen weeks ended July 30, 2022 (in thousands):

	Reportable Segment
	VB Direct		VB Indirect		Pura Vida		Unallocated Corporate Expenses		Total Expense
Severance charges (1)	$	15	$	—	$	16	$	5,683	$	5,714
Consulting fees and other costs (2)	302		—		—		2,755		3,057
Total (3)	$	317	$	—	$	16	$	8,438	$	8,771
(1) Includes CEO retirement severance
(2) Includes $2.8 million for fees related to cost savings initiatives and CEO search and $0.3 million for concept brand exit costs
(3) $8.6 million of the charges are recorded within SG&A expenses and $0.2 million are recorded within cost of sales

The Company incurred the following charges during the twenty-six weeks ended July 29, 2023 (in thousands):

	Reportable Segment
	VB Direct		VB Indirect		Pura Vida		Unallocated Corporate Expenses		Total Expense
Severance charges (1)	$	342	$	—	$	79	$	1,647	$	2,068
Consulting fees and other costs (2)	—		—		—		105		105
Total (3)	$	342	$	—	$	79	$	1,752	$	2,173
(1) Includes former CFO severance
(2) Related to professional fees
(3) Recorded within SG&A expenses

The Company incurred the following charges during the twenty-six weeks ended July 30, 2022 (in thousands):

	Reportable Segment
	VB Direct		VB Indirect		Pura Vida		Unallocated Corporate Expenses		Total Expense
Severance charges (1)	$	15	$	—	$	16	$	5,683	$	5,714
Consulting fees and other costs (2)	302		—		—		2,905		3,207
Total (3)	$	317	$	—	$	16	$	8,588	$	8,921
(1) Includes CEO retirement severance
(2) Includes $2.9 million for fees related to cost savings initiatives and CEO search and $0.3 million for concept brand exit costs
(3) $8.7 million of the charges are recorded within SG&A expenses and $0.2 million are recorded within cost of sales

A summary of charges and related liabilities associated with the cost savings initiatives and severance charges are as follows (in thousands):

	Severance Charges and Cash Retention Payment Acceleration Charges (1)		Consulting Fees and Other Costs
Liability as of January 28, 2023	$	3,083	$	60
Fiscal 2024 charges	2,068		105
Cash payments	(4,946)		(165)
Non-cash charges and adjustments	—		—
Liability as of July 29, 2023	$	205	$	—
(1) Remaining liability is recorded within accrued employment costs

Other Charges

During the thirteen and twenty-six weeks ended July 30, 2022, the Company recorded $5.9 million of non-cash inventory adjustments related to the exit of certain technology products and excess mask products and $1.1 million for purchase order cancellation fees related to spring 2023 product within cost of sales in its Condensed Consolidated Statement of Operations. Collectively, $5.1 million was recorded within the Direct segment, $1.0 million was recorded within the Indirect segment, and $0.9 million was recorded within the Pura Vida segment. There were no similar charges during the thirteen and twenty-six weeks ended July 29, 2023.

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Segment Reporting

6 Months Ended

Jul. 29, 2023

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company has three operating segments, which are also its reportable segments: VB Direct, VB Indirect, and Pura Vida. These operating segments are components of the Company for which separate financial information is available and for which operating results are evaluated on a regular basis by the chief operating decision maker in deciding how to allocate resources and in assessing the performance of the segments.

The VB Direct segment includes Vera Bradley full-line and factory outlet stores; the Vera Bradley website, verabradley.com; the Vera Bradley online outlet site; and the Vera Bradley annual outlet sale. Revenues generated from this segment are driven through the sale of Vera Bradley-branded products from Vera Bradley to end consumers.

The VB Indirect segment represents revenues generated through the distribution of Vera Bradley-branded products to specialty retailers representing approximately 1,700 locations, substantially all of which are located in the United States; key accounts, which include department stores, national accounts, third-party e-commerce sites, and third-party inventory liquidators; and royalties recognized through licensing agreements related to the Vera Bradley brand.

The Pura Vida segment represents revenues generated through the Pura Vida websites, www.puravidabracelets.com, puravidabracelets.ca, and www.puravidabracelets.eu; through the distribution of Pura Vida-branded products to wholesale retailers, substantially all of which are located in the United States; and through the Pura Vida retail stores.

Corporate costs represent the Company’s administrative expenses, which include, but are not limited to: human resources, legal, finance, information technology, design, product development, merchandising, corporate-level marketing and advertising, and various other corporate-level-activity-related expenses not directly attributable to a reportable segment. All intercompany-related activities are eliminated in consolidation and are excluded from the segment reporting.

Company management evaluates segment operating results based on several indicators. The primary or key performance indicators for each segment are net revenues and operating income. Net revenues and operating income information for the Company’s reportable segments during the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022, respectively, consisted of the following (in thousands):

	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Segment net revenues:
VB Direct	$	85,702	$	87,013	$	144,607	$	148,649
VB Indirect	17,363		17,325		32,736		34,302
Pura Vida	25,107		26,033		45,191		45,879
Total	$	128,172	$	130,371	$	222,534	$	228,830
Segment operating income (loss):
VB Direct	$	20,621	$	10,044	$	27,961	$	15,547
VB Indirect	6,204		3,918		10,910		9,397
Pura Vida	4,000		(28,534)		5,562		(27,478)
Total	$	30,825	$	(14,572)	$	44,433	$	(2,534)
Reconciliation:
Segment operating income (loss)	$	30,825	$	(14,572)	$	44,433	$	(2,534)
Less:
Unallocated corporate expenses	(17,954)		(28,249)		(37,948)		(48,520)
Operating income (loss)	$	12,871	$	(42,821)	$	6,485	$	(51,054)

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jul. 29, 2023	Apr. 29, 2023	Jul. 30, 2022	Apr. 30, 2022	Jul. 29, 2023	Jul. 30, 2022
Pay vs Performance Disclosure
Net income (loss) attributable to Vera Bradley, Inc.	$ 9,254	$ (4,679)	$ (29,767)	$ (6,974)	$ 4,575	$ (36,741)

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Insider Trading Arrangements	3 Months Ended
	Jul. 29, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Description of the Company and Basis of Presentation (Policies)

6 Months Ended

Jul. 29, 2023

Accounting Policies [Abstract]

Basis of Accounting

The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as permitted by such rules and regulations. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2023, filed with the SEC.

Principles of Consolidation

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, including Pura Vida. The Company has eliminated intercompany balances and transactions in consolidation. In the prior year, Pura Vida was a majority owned subsidiary and was included in the consolidated financial statements of the Company. Refer to Notes 4 and 12 herein for additional information.

Fiscal Periods

Fiscal Periods

The Company’s fiscal year ends on the Saturday closest to January 31. References to the fiscal quarters ended July 29, 2023 and July 30, 2022 refer to the thirteen week periods ended on those dates.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

There were no new accounting pronouncements issued or which became effective during the thirteen and twenty-six weeks ended July 29, 2023, which had, or are expected to have, a significant impact on the Company's Consolidated Financial Statements.

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Revenue from Contracts with Customers (Tables)

6 Months Ended

Jul. 29, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The following presents the Company's net revenues disaggregated by product category for the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022 (in thousands):

	Thirteen Weeks Ended
	July 29, 2023
	VB Direct Segment			VB Indirect Segment			Pura Vida Segment			Total
Product categories
Bags	$	35,396		$	9,628		$	176		$	45,200
Travel	19,960			3,479			—			23,439
Accessories	15,140			1,987			23,672			40,799
Home	9,138			953			—			10,091
Apparel/Footwear	4,043			323			470			4,836
Other	2,025		(1)	993		(2)	789		(3)	3,807
Total net revenues	$	85,702	(4)	$	17,363	(5)	$	25,107	(4)	$	128,172
(1) Primarily includes net revenues from stationery, freight, and gift card breakage.
(2) Primarily includes net revenues from licensing agreements and freight.
(3) Related to freight.
(4) Net revenues were related to product sales recognized at a point in time.
(5) $16.7 million of net revenues related to product sales recognized at a point in time and $0.7 million of net revenues related to sales-based royalties recognized over time.

	Thirteen Weeks Ended
	July 30, 2022
	VB Direct Segment			VB Indirect Segment			Pura Vida Segment			Total
Product categories
Bags	$	38,373		$	9,603		$	779		$	48,755
Travel	20,071			3,033			—			23,104
Accessories	15,757			2,636			23,269			41,662
Home	8,726			732			—			9,458
Apparel/Footwear(6)	2,161			360			1,359			3,880
Other	1,925		(1)	961		(2)	626		(3)	3,512
Total net revenues	$	87,013	(4)	$	17,325	(5)	$	26,033	(4)	$	130,371
(1) Primarily includes net revenues from stationery, freight, and gift card breakage.
(2) Primarily includes net revenues from licensing agreements and freight.
(3) Related to freight.
(4) Net revenues were related to product sales recognized at a point in time.
(5) $16.6 million of net revenues related to product sales recognized at a point in time and $0.7 million of net revenues related to sales-based royalties recognized over time.
(6) Includes mask sales.

	Twenty-Six Weeks Ended
	July 29, 2023
	VB Direct Segment			VB Indirect Segment			Pura Vida Segment			Total
Product categories
Bags	$	58,297		$	17,956		$	237		$	76,490
Travel	35,366			6,658			—			42,024
Accessories	25,634			3,945			42,683			72,262
Home	15,066			1,541			—			16,607
Apparel/Footwear	6,990			784			760			8,534
Other	3,254		(1)	1,852		(2)	1,511		(3)	6,617
Total net revenues	$	144,607	(4)	$	32,736	(5)	$	45,191	(4)	$	222,534
(1) Primarily includes net revenues from stationery, freight, and gift card breakage.
(2) Primarily includes net revenues from licensing agreements and freight.
(3) Related to freight.
(4) Net revenues were related to product sales recognized at a point in time.
(5) $31.3 million of net revenues related to product sales recognized at a point in time and $1.4 million of net revenues related to sales-based royalties recognized over time.

	Twenty-Six Weeks Ended
	July 30, 2022
	VB Direct Segment			VB Indirect Segment			Pura Vida Segment			Total
Product categories
Bags	$	64,505		$	19,054		$	842		$	84,401
Travel	35,159			6,106			—			41,265
Accessories	27,256			4,404			42,129			73,789
Home	14,448			1,858			—			16,306
Apparel/Footwear(6)	4,064			860			1,795			6,719
Other	3,217		(1)	2,020		(2)	1,113		(3)	6,350
Total net revenues	$	148,649	(4)	$	34,302	(5)	$	45,879	(4)	$	228,830
(1) Primarily includes net revenues from stationery, freight, and gift card breakage.
(2) Primarily includes net revenues from licensing agreements and freight.
(3) Related to freight.
(4) Net revenues were related to product sales recognized at a point in time.
(5) $32.8 million of net revenues related to product sales recognized at a point in time and $1.5 million of net revenues related to sales-based royalties recognized over time.
(6) Includes mask sales.

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Leases (Tables)

6 Months Ended

Jul. 29, 2023

Leases [Abstract]

Schedule of Lease, Cost

The following lease expense is recorded within cost of sales for the Asia sourcing office and certain equipment leases and within selling, general, and administrative expenses for all other leases, including retail store leases, in the Company's Condensed Consolidated Statement of Operations for the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022 (in thousands):

	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Operating lease cost	$	6,502	$	6,114	$	13,067	$	12,364
Variable lease cost	1,401		1,564		2,757		2,982
Short-term lease cost	233		102		355		316
Less: Sublease income (1)	(105)		(24)		(210)		(24)
Total net lease cost	$	8,031	$	7,756	$	15,969	$	15,638
(1) Related to the sublease of a former Company location.

Supplemental operating cash flow information

Supplemental operating cash flow information was as follows (in thousands):

	Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022
Cash paid for amounts included in the measurement of operating lease liabilities	$	14,803	$	14,910
Right-of-use assets increase as a result of new and modified operating lease liabilities, net	$	2,499	$	17,225

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Earnings Per Share (Tables)

6 Months Ended

Jul. 29, 2023

Earnings Per Share [Abstract]

Components of Basic and Diluted Net Income Per Share

The components of basic and diluted earnings per share were as follows (in thousands, except per share data):

 

	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Numerator:
Net income (loss)	$	9,254	$	(36,901)	$	4,575	$	(43,611)
Less: Net loss attributable to redeemable noncontrolling interest	—		(7,134)		—		(6,870)
Net income (loss) attributable to Vera Bradley, Inc.	$	9,254	$	(29,767)	$	4,575	$	(36,741)
Denominator:
Weighted-average number of common shares (basic)	30,901		31,429		30,847		32,051
Dilutive effect of stock-based awards	238		—		361		—
Weighted-average number of common shares (diluted)	31,139		31,429		31,208		32,051
Net income (loss) per share available to Vera Bradley, Inc. common shareholders:
Basic	$	0.30	$	(0.95)	$	0.15	$	(1.15)
Diluted	$	0.30	$	(0.95)	$	0.15	$	(1.15)

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Fair Value of Financial Instruments Fair Value Disclosures (Tables)

6 Months Ended

Jul. 29, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements of Investments

The following table details the fair value measurements of the Company's investments as of July 29, 2023 and January 28, 2023 (in thousands):

	Level 1				Level 2				Level 3
	July 29, 2023		January 28, 2023		July 29, 2023		January 28, 2023		July 29, 2023		January 28, 2023
Cash equivalents(1)	$	366	$	360	$	—	$	—	$	—	$	—
(1) Cash equivalents primarily represent a money market fund that has a maturity of three months or less at the date of purchase. Due to the short maturity, the Company believes the carrying value approximates fair value.

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Stock-Based Compensation (Tables)

6 Months Ended

Jul. 29, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Restricted-Stock Awards and Restricted-Stock Units

The following table sets forth a summary of restricted stock unit activity for the twenty-six weeks ended July 29, 2023 (units in thousands):

 

	Time-based Restricted Stock Units			Performance-based Restricted Stock Units
	Number of Units	Weighted- Average Grant Date Fair Value (per unit)		Number of Units	Weighted- Average Grant Date Fair Value (per unit)
Nonvested units outstanding at January 28, 2023	965	$	5.74	523	$	4.71
Granted	423	5.87		315	5.82
Vested	(396)	6.93		(94)	4.08
Forfeited	(142)	6.07		(87)	6.91
Nonvested units outstanding at July 29, 2023	850	$	5.20	657	$	5.04

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Redeemable Noncontrolling Interest (Tables)

6 Months Ended

Jul. 29, 2023

Temporary Equity Disclosure [Abstract]

Schedule of changes in redeemable noncontrolling interest

Changes in redeemable noncontrolling interest for the twenty-six weeks ended July 29, 2023, were as follows (in thousands):    

Balance at January 28, 2023	$	10,712
Adjustment for purchase of noncontrolling interest	(10,712)
Balance at April 29, 2023 and July 29, 2023	$	—

Changes in redeemable noncontrolling interest for the thirteen and twenty-six weeks ended July 30, 2022, were as follows (in thousands):

Balance at January 29, 2022	$	30,974
Net income attributable to redeemable noncontrolling interest	264
Distributions to redeemable noncontrolling interest	(146)
Balance at April 30, 2022	$	31,092
Net loss attributable to redeemable noncontrolling interest	(7,134)
Distributions to redeemable noncontrolling interest	(467)
Balance at July 30, 2022	$	23,491

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Intangible Assets and Goodwill (Tables)

6 Months Ended

Jul. 29, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

The following tables detail the carrying value of the Company's intangible assets other than goodwill related to the acquisition of a majority interest in Pura Vida. On January 30, 2023, the Company purchased the remaining 25% interest in Pura Vida.

	July 29, 2023
in thousands	Gross Basis		Accumulated Amortization(1)		Carrying Amount
Definite-lived intangible assets
Customer Relationships	$	24,208	$	(21,414)	$	2,794
Non-competition Agreements	788		(788)		—
Total definite-lived intangible assets	24,996		(22,202)		2,794
Indefinite-lived intangible asset
Pura Vida Brand (2)	11,666		—		11,666
Total intangible assets, excluding goodwill	$	36,662	$	(22,202)	$	14,460
(1) Amortization expense is recorded within the Pura Vida segment.
(2) Impairment charges of $9.9 million and $15.1 million were recorded within the Pura Vida segment during the second and fourth quarters of fiscal 2023.

	January 28, 2023
in thousands	Gross Basis		Accumulated Amortization(1)		Carrying Amount
Definite-lived intangible assets
Customer Relationships	$	24,208	$	(19,956)	$	4,252
Non-competition Agreements	788		(788)		—
Total definite-lived intangible assets	24,996		(20,744)		4,252
Indefinite-lived intangible asset
Pura Vida Brand (2)	11,666		—		11,666
Total intangible assets, excluding goodwill	$	36,662	$	(20,744)	$	15,918
(1) Amortization expense is recorded within the Pura Vida segment.
(2) Impairment charges of $9.9 million and $15.1 million were recorded within the Pura Vida segment during the second and fourth quarters of fiscal 2023.

Schedule of Indefinite-Lived Intangible Assets

The following tables detail the carrying value of the Company's intangible assets other than goodwill related to the acquisition of a majority interest in Pura Vida. On January 30, 2023, the Company purchased the remaining 25% interest in Pura Vida.

	July 29, 2023
in thousands	Gross Basis		Accumulated Amortization(1)		Carrying Amount
Definite-lived intangible assets
Customer Relationships	$	24,208	$	(21,414)	$	2,794
Non-competition Agreements	788		(788)		—
Total definite-lived intangible assets	24,996		(22,202)		2,794
Indefinite-lived intangible asset
Pura Vida Brand (2)	11,666		—		11,666
Total intangible assets, excluding goodwill	$	36,662	$	(22,202)	$	14,460
(1) Amortization expense is recorded within the Pura Vida segment.
(2) Impairment charges of $9.9 million and $15.1 million were recorded within the Pura Vida segment during the second and fourth quarters of fiscal 2023.

	January 28, 2023
in thousands	Gross Basis		Accumulated Amortization(1)		Carrying Amount
Definite-lived intangible assets
Customer Relationships	$	24,208	$	(19,956)	$	4,252
Non-competition Agreements	788		(788)		—
Total definite-lived intangible assets	24,996		(20,744)		4,252
Indefinite-lived intangible asset
Pura Vida Brand (2)	11,666		—		11,666
Total intangible assets, excluding goodwill	$	36,662	$	(20,744)	$	15,918
(1) Amortization expense is recorded within the Pura Vida segment.
(2) Impairment charges of $9.9 million and $15.1 million were recorded within the Pura Vida segment during the second and fourth quarters of fiscal 2023.

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

The future amortization expense for intangible assets is as follows (in thousands):

	Amortization Expense
Fiscal 2024 (remaining six months)	1,458
Fiscal 2025	1,336
Total	$	2,794

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Cost Saving Initiatives and Other Charges - (Tables)

6 Months Ended

Jul. 29, 2023

Restructuring and Related Activities [Abstract]

Schedule of Charges Incurred

The Company incurred the following charges during the thirteen weeks ended July 29, 2023 (in thousands):

	Reportable Segment
	VB Direct		VB Indirect		Pura Vida		Unallocated Corporate Expenses		Total Expense
Severance charges	$	—	$	—	$	79	$	—	$	79
Consulting fees and other costs (1)	—		—		—		—		—
Total (2)	$	—	$	—	$	79	$	—	$	79
(1) Related to professional fees
(2) Recorded within selling, general, and administrative ("SG&A") expenses

The Company incurred the following charges during the thirteen weeks ended July 30, 2022 (in thousands):

	Reportable Segment
	VB Direct		VB Indirect		Pura Vida		Unallocated Corporate Expenses		Total Expense
Severance charges (1)	$	15	$	—	$	16	$	5,683	$	5,714
Consulting fees and other costs (2)	302		—		—		2,755		3,057
Total (3)	$	317	$	—	$	16	$	8,438	$	8,771
(1) Includes CEO retirement severance
(2) Includes $2.8 million for fees related to cost savings initiatives and CEO search and $0.3 million for concept brand exit costs
(3) $8.6 million of the charges are recorded within SG&A expenses and $0.2 million are recorded within cost of sales

The Company incurred the following charges during the twenty-six weeks ended July 29, 2023 (in thousands):

	Reportable Segment
	VB Direct		VB Indirect		Pura Vida		Unallocated Corporate Expenses		Total Expense
Severance charges (1)	$	342	$	—	$	79	$	1,647	$	2,068
Consulting fees and other costs (2)	—		—		—		105		105
Total (3)	$	342	$	—	$	79	$	1,752	$	2,173
(1) Includes former CFO severance
(2) Related to professional fees
(3) Recorded within SG&A expenses

The Company incurred the following charges during the twenty-six weeks ended July 30, 2022 (in thousands):

	Reportable Segment
	VB Direct		VB Indirect		Pura Vida		Unallocated Corporate Expenses		Total Expense
Severance charges (1)	$	15	$	—	$	16	$	5,683	$	5,714
Consulting fees and other costs (2)	302		—		—		2,905		3,207
Total (3)	$	317	$	—	$	16	$	8,588	$	8,921
(1) Includes CEO retirement severance
(2) Includes $2.9 million for fees related to cost savings initiatives and CEO search and $0.3 million for concept brand exit costs
(3) $8.7 million of the charges are recorded within SG&A expenses and $0.2 million are recorded within cost of sales

A summary of charges and related liabilities associated with the cost savings initiatives and severance charges are as follows (in thousands):

	Severance Charges and Cash Retention Payment Acceleration Charges (1)		Consulting Fees and Other Costs
Liability as of January 28, 2023	$	3,083	$	60
Fiscal 2024 charges	2,068		105
Cash payments	(4,946)		(165)
Non-cash charges and adjustments	—		—
Liability as of July 29, 2023	$	205	$	—
(1) Remaining liability is recorded within accrued employment costs

XML

Segment Reporting (Tables)

6 Months Ended

Jul. 29, 2023

Segment Reporting [Abstract]

Schedule of Net Revenues and Operating Income Information for Reportable Segments

Net revenues and operating income information for the Company’s reportable segments during the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022, respectively, consisted of the following (in thousands):

	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Segment net revenues:
VB Direct	$	85,702	$	87,013	$	144,607	$	148,649
VB Indirect	17,363		17,325		32,736		34,302
Pura Vida	25,107		26,033		45,191		45,879
Total	$	128,172	$	130,371	$	222,534	$	228,830
Segment operating income (loss):
VB Direct	$	20,621	$	10,044	$	27,961	$	15,547
VB Indirect	6,204		3,918		10,910		9,397
Pura Vida	4,000		(28,534)		5,562		(27,478)
Total	$	30,825	$	(14,572)	$	44,433	$	(2,534)
Reconciliation:
Segment operating income (loss)	$	30,825	$	(14,572)	$	44,433	$	(2,534)
Less:
Unallocated corporate expenses	(17,954)		(28,249)		(37,948)		(48,520)
Operating income (loss)	$	12,871	$	(42,821)	$	6,485	$	(51,054)

XML

Description of the Company and Basis of Presentation - Additional Information (Details)	6 Months Ended
	Jul. 29, 2023 location Segment Store	Jan. 30, 2023	Jul. 16, 2019
Lessee, Lease, Description [Line Items]
Number of reportable segments | Segment	3
Number of full-line stores	45
Number of factory outlet stores	80
Number of specialty retail locations | location	1,700
Creative Genius, Inc.
Lessee, Lease, Description [Line Items]
Percentage of business acquired			75.00%
Pura Vida
Lessee, Lease, Description [Line Items]
Percentage of business acquired		25.00%

XML

Revenue from Contracts with Customers Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 29, 2023	Jul. 30, 2022	Jul. 29, 2023	Jul. 30, 2022
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	$ 128,172	$ 130,371	$ 222,534	$ 228,830
Direct [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	85,702	87,013	144,607	148,649
Indirect [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	17,363	17,325	32,736	34,302
Pura Vida
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	25,107	26,033	45,191	45,879
Bags
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	45,200	48,755	76,490	84,401
Bags | Direct [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	35,396	38,373	58,297	64,505
Bags | Indirect [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	9,628	9,603	17,956	19,054
Bags | Pura Vida
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	176	779	237	842
Travel
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	23,439	23,104	42,024	41,265
Travel | Direct [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	19,960	20,071	35,366	35,159
Travel | Indirect [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	3,479	3,033	6,658	6,106
Travel | Pura Vida
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	0	0	0	0
Accessories
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	40,799	41,662	72,262	73,789
Accessories | Direct [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	15,140	15,757	25,634	27,256
Accessories | Indirect [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	1,987	2,636	3,945	4,404
Accessories | Pura Vida
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	23,672	23,269	42,683	42,129
Home
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	10,091	9,458	16,607	16,306
Home | Direct [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	9,138	8,726	15,066	14,448
Home | Indirect [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	953	732	1,541	1,858
Home | Pura Vida
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	0	0	0	0
Apparel/Footwear
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	4,836	3,880	8,534	6,719
Apparel/Footwear | Direct [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	4,043	2,161	6,990	4,064
Apparel/Footwear | Indirect [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	323	360	784	860
Apparel/Footwear | Pura Vida
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	470	1,359	760	1,795
Other
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	3,807	3,512	6,617	6,350
Other | Direct [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	2,025	1,925	3,254	3,217
Other | Indirect [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	993	961	1,852	2,020
Other | Pura Vida
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	789	626	1,511	1,113
Transferred At Point In Time | Indirect [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	16,700	16,600	31,300	32,800
Transferred Over Time | Indirect [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	$ 700	$ 700	$ 1,400	$ 1,500

XML

Revenue from Contracts with Customers (Details) - USD ($) $ in Millions	Jul. 29, 2023	Jan. 28, 2023
Revenue from Contract with Customer [Abstract]
Unearned revenue, current	$ 2.5	$ 3.2
Accounts receivable from contracts with customers, net of allowances	23.4	20.7
Provision for doubtful accounts	$ 0.8	$ 0.8

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Leases - Narrative (Details) - USD ($) $ in Millions	Jul. 29, 2023	Jul. 30, 2022
Lessee, Lease, Description [Line Items]
Weighted-average discount rate	4.70%	4.60%
Operating Lease, lease not yet commenced	$ 2.4
Weighted-average remaining lease term	5 years 4 months 24 days	5 years 4 months 24 days
Maximum
Lessee, Lease, Description [Line Items]
Lease not yet commenced, term of contract	10 years

XML

Leases - Total lease cost (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 29, 2023	Jul. 30, 2022	Jul. 29, 2023	Jul. 30, 2022
Leases [Abstract]
Operating lease cost	$ 6,502	$ 6,114	$ 13,067	$ 12,364
Variable lease cost	1,401	1,564	2,757	2,982
Short-term lease cost	233	102	355	316
Less: Sublease income	(105)	(24)	(210)	(24)
Total net lease cost	$ 8,031	$ 7,756	$ 15,969	$ 15,638

XML

Leases - Cash Flow Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 29, 2023	Jul. 30, 2022
Leases [Abstract]
Cash paid for amounts included in the measurement of operating lease liabilities	$ 14,803	$ 14,910
Right-of-use assets increase as a result of new and modified operating lease liabilities, net	$ 2,499	$ 17,225

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Earnings Per Share - Narrative (Details) - Creative Genius, Inc.	Jan. 30, 2023	Jul. 16, 2019
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Ownership percentage by noncontrolling owners		25.00%
Ownership percentage by noncontrolling owners, percentage purchased	25.00%

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Earnings Per Share - Components of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Jul. 29, 2023	Apr. 29, 2023	Jul. 30, 2022	Apr. 30, 2022	Jul. 29, 2023	Jul. 30, 2022
Numerator:
Net income (loss)	$ 9,254		$ (36,901)		$ 4,575	$ (43,611)
Less: Net loss attributable to redeemable noncontrolling interest	0		7,134	$ (264)	0	6,870
Net income (loss) attributable to Vera Bradley, Inc.	$ 9,254	$ (4,679)	$ (29,767)	$ (6,974)	$ 4,575	$ (36,741)
Denominator:
Weighted-average number of common shares (basic) (in shares)	30,901		31,429		30,847	32,051
Dilutive effect of stock-based awards (in shares)	238		0		361	0
Weighted-average number of common shares (diluted) (in shares)	31,139		31,429		31,208	32,051
Net income (loss) per share available to Vera Bradley, Inc. common shareholders:
Basic (in dollars per share)	$ 0.30		$ (0.95)		$ 0.15	$ (1.15)
Diluted (in dollars per share)	$ 0.30		$ (0.95)		$ 0.15	$ (1.15)

XML

Fair Value of Financial Instruments (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Jul. 29, 2023	Jan. 28, 2023
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 366	$ 360
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 0	$ 0

XML

Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 29, 2023	Jul. 30, 2022	Jul. 29, 2023	Jul. 30, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment of property, plant and equipment		0.8 million		1.4 million
Impairment of goodwill and intangible assets	$ 0	$ 29,338	$ 0	$ 29,338
Creative Genius, Inc.
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment of goodwill and intangible assets	$ 0	$ 29,300	$ 0	$ 29,300
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment of property, plant and equipment	no		no

XML

Debt - Additional Information (Details) - USD ($) $ in Millions	Aug. 03, 2023	Sep. 07, 2018	Jul. 29, 2023	Jan. 28, 2023
Debt Instrument [Line Items]
Long-term line of credit			$ 0.0	$ 0.0
Revolving Credit Facility | New Credit Agreement | Subsidiaries
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 75.0
Increase (decrease) in aggregate credit facility principal amount		$ 25.0
Unused capacity, commitment fee percentage		0.20%
Debt instrument, fixed charge coverage ratio		1.00
Available borrowings		$ 7.5	$ 75.0	$ 75.0
Revolving Credit Facility | New Credit Agreement | Subsidiaries | Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate		10.00%
Revolving Credit Facility | New Credit Agreement | Subsidiaries | Minimum | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate		(1.00%)
Revolving Credit Facility | New Credit Agreement | Subsidiaries | Minimum | Adjusted London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Basis spread on variable rate		1.00%
Revolving Credit Facility | New Credit Agreement | Subsidiaries | Maximum | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate		(1.50%)
Revolving Credit Facility | New Credit Agreement | Subsidiaries | Maximum | Adjusted London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Basis spread on variable rate		1.30%
Revolving Credit Facility | Third Amendment | Subsidiaries | Subsequent Event [Member]
Debt Instrument [Line Items]
Increase (decrease) in aggregate credit facility principal amount	$ 50.0
Debt instrument, fixed charge coverage ratio	1.00
Available borrowings	$ 9.4
Interest rate per annum	2.50%
Revolving Credit Facility | Third Amendment | Subsidiaries | Base Rate | Subsequent Event [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	12.50%
Revolving Credit Facility | Third Amendment | Subsidiaries | Minimum | Subsequent Event [Member]
Debt Instrument [Line Items]
Commitment fee	0.20%
Revolving Credit Facility | Third Amendment | Subsidiaries | Maximum | Subsequent Event [Member]
Debt Instrument [Line Items]
Commitment fee	0.30%

XML

Income Taxes - Additional Information (Details)	3 Months Ended		6 Months Ended
	Jul. 29, 2023	Jul. 30, 2022	Jul. 29, 2023	Jul. 30, 2022	Jan. 30, 2023
Income Tax Contingency [Line Items]
Effective income tax rate	28.00%	13.90%	29.00%	14.70%
Pura Vida
Income Tax Contingency [Line Items]
Percentage of business acquired					25.00%

XML

Stock-Based Compensation - Additional Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 29, 2023 USD ($) shares	Jul. 30, 2022 shares	Jul. 29, 2023 USD ($) shares	Jul. 30, 2022 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock unit vesting and settlement ratio to common shares			1
Restricted-Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost, net of estimated forfeitures, related to nonvested restricted stock units | $	$ 5,900		$ 5,900
Total unrecognized compensation cost, net of estimated forfeitures, related to nonvested restricted stock units, weighted-average period of recognition	2 years 2 months 12 days
Restricted-Stock Units [Member] | Non-Employee Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units vesting period, years			1 year
Performance-based Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted-stock awards/units granted in period			315,000
Restricted stock units vesting period, years			3 years
2020 Equity And Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Issuance of common stock shares	6,000,000		6,000,000
2020 Equity And Incentive Plan [Member] | Restricted-Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted-stock awards/units granted in period	195,617	0	738,187	841,369
Restricted-stock awards/units with an aggregate grant-date fair value | $	$ 1,100		$ 4,300	$ 6,300

XML

Stock-Based Compensation - Summary of Restricted-Stock Awards and Restricted-Stock Units (Details) shares in Thousands	6 Months Ended
	Jul. 29, 2023 $ / shares shares
Time-based Restricted Stock Units
Number of Units
Nonvested units outstanding, beginning balance (in shares) | shares	965
Granted (in shares) | shares	423
Vested (in shares) | shares	(396)
Forfeited (in shares) | shares	(142)
Nonvested units outstanding, ending balance (in shares) | shares	850
Weighted- Average Grant Date Fair Value (per unit)
Nonvested units outstanding, beginning balance (in dollars per share) | $ / shares	$ 5.74
Granted (in dollars per share) | $ / shares	5.87
Vested (in dollars per share) | $ / shares	6.93
Forfeited (in dollars per share) | $ / shares	6.07
Nonvested units outstanding, ending balance (in dollars per share) | $ / shares	$ 5.20
Performance-based Restricted Stock Units
Number of Units
Nonvested units outstanding, beginning balance (in shares) | shares	523
Granted (in shares) | shares	315
Vested (in shares) | shares	(94)
Forfeited (in shares) | shares	(87)
Nonvested units outstanding, ending balance (in shares) | shares	657
Weighted- Average Grant Date Fair Value (per unit)
Nonvested units outstanding, beginning balance (in dollars per share) | $ / shares	$ 4.71
Granted (in dollars per share) | $ / shares	5.82
Vested (in dollars per share) | $ / shares	4.08
Forfeited (in dollars per share) | $ / shares	6.91
Nonvested units outstanding, ending balance (in dollars per share) | $ / shares	$ 5.04

XML

Commitments and Contingencies - Narrative (Details) $ in Millions	3 Months Ended
	Jul. 29, 2023 USD ($)
Pending Litigation
Loss Contingencies [Line Items]
Loss contingency, damages sought, value	$ 10.0

XML

Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	6 Months Ended
	Jul. 29, 2023	Jul. 29, 2023	Jan. 28, 2023	Dec. 11, 2021
Equity, Class of Treasury Stock [Line Items]
Number of shares held in treasury	12,328,010	12,328,010
Average price per share of shares acquired (in dollars per share)	$ 10.89
Value of treasury stock	$ 134,279	$ 134,279	$ 132,864
2021 Share Repurchase Program
Equity, Class of Treasury Stock [Line Items]
Authorized amount under share repurchase program				$ 50,000
Remaining authorized repurchase amount	26,300	$ 26,300
2018 Share Repurchase Program
Equity, Class of Treasury Stock [Line Items]
Treasury stock, shares, acquired (in shares)		248,320
Average price per share of shares acquired (in dollars per share)		$ 5.70
Value of treasury stock	$ 1,400	$ 1,400

XML

Cloud Computing Arrangements (Details) - USD ($) $ in Millions	Jul. 29, 2023	Jan. 28, 2023
Schedule of Capitalization [Line Items]
Capitalized software development costs	$ 4.9	$ 6.4
Prepaid Expenses and Other Current Assets
Schedule of Capitalization [Line Items]
Capitalized software development costs	2.8	3.0
Other Assets
Schedule of Capitalization [Line Items]
Capitalized software development costs	$ 2.1	$ 3.4

XML

Redeemable Noncontrolling Interest (Details) - USD ($) $ in Thousands		3 Months Ended				6 Months Ended
	Jan. 30, 2023	Jul. 29, 2023	Apr. 29, 2023	Jul. 30, 2022	Apr. 30, 2022	Jul. 29, 2023	Jul. 30, 2022	Jul. 16, 2019
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Redeemable noncontrolling interest, beginning balance			$ 10,712	$ 31,092	$ 30,974	$ 10,712	$ 30,974
Adjustment for purchase of noncontrolling interest						(10,712)
Net income attributable to redeemable noncontrolling interest		$ 0		(7,134)	264	0	(6,870)
Distributions to redeemable noncontrolling interest				(467)	(146)	0	(613)
Redeemable noncontrolling interest, ending balance		$ 0		$ 23,491	$ 31,092	$ 0	$ 23,491
Creative Genius, Inc.
Noncontrolling Interest [Line Items]
Ownership percentage by noncontrolling owners								25.00%
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Net income attributable to redeemable noncontrolling interest			(10,700)
Payments of Merger Related Costs, Financing Activities	$ 10,000
Noncontrolling Interest, Ownership Percentage by Parent	100.00%
Adjustments to Additional Paid in Capital, Fair Value			700
Adjustments To Additional Paid In Capital, Deferred Income			600
Adjustments to Additional Paid in Capital, Other			$ 1,300
Creative Genius, Inc.
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Percentage of business acquired								75.00%

XML

Intangible Assets and Goodwill (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jul. 30, 2022	Jul. 29, 2023	Jul. 30, 2022	Jan. 28, 2023
Finite-Lived Intangible Assets [Line Items]
Goodwill and intangible asset impairment		$ 0.0
Pura Vida
Finite-Lived Intangible Assets [Line Items]
Goodwill		$ 0.0		$ 0.0
Impairment charge	$ 9.9		$ 9.9
Impairment of goodwill	$ 19.4		$ 19.4

XML

Intangible Assets and Goodwill - Carrying value of the Company's intangible assets other than goodwill (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 28, 2023	Jul. 30, 2022	Jul. 29, 2023
Finite-Lived Intangible Assets [Line Items]
Gross Basis	$ 24,996		$ 24,996
Accumulated Amortization	20,744		22,202
Carrying Amount	4,252		2,794
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract]
Indefinite-lived intangible asset	11,666		11,666
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Gross Basis	36,662		36,662
Accumulated Amortization	20,744		22,202
Carrying Amount	15,918		14,460
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill)	15,100	$ 9,900
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Gross Basis	24,208		24,208
Accumulated Amortization	19,956		21,414
Carrying Amount	4,252		2,794
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Accumulated Amortization	19,956		21,414
Non-competition Agreements
Finite-Lived Intangible Assets [Line Items]
Gross Basis	788		788
Accumulated Amortization	788		788
Carrying Amount	0		0
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Accumulated Amortization	$ 788		$ 788

XML

Intangible Assets and Goodwill - Provisional amortization expense for intangible assets (Details) - USD ($) $ in Thousands	Jul. 29, 2023	Jan. 28, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Fiscal 2024 (remaining six months)	$ 1,458
Fiscal 2025	1,336
Carrying Amount	$ 2,794	$ 4,252

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Cost Saving Initiatives and Other Charges (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 29, 2023	Jul. 30, 2022	Jul. 29, 2023	Jul. 30, 2022
Restructuring Cost and Reserve [Line Items]
Severance charges	$ 79	$ 5,714	$ 2,068	$ 5,714
Consulting fees and other costs	0	3,057	105	3,207
Total	79	8,771	2,173	8,921
Other Restructuring Costs Including Cost Savings Initiatives And Professional Search		2,800		2,900
Business Exit Costs		300		300
Selling, General and Administrative Expenses
Restructuring Cost and Reserve [Line Items]
Total		8,600		8,700
Cost of Sales
Restructuring Cost and Reserve [Line Items]
Total		200		200
Direct [Member]
Restructuring Cost and Reserve [Line Items]
Severance charges	0	15	342	15
Consulting fees and other costs	0	302	0	302
Total	0	317	342	317
Indirect [Member]
Restructuring Cost and Reserve [Line Items]
Severance charges	0	0	0	0
Consulting fees and other costs	0	0	0	0
Total	0	0	0	0
Pura Vida [Member]
Restructuring Cost and Reserve [Line Items]
Severance charges	79	16	79	16
Consulting fees and other costs	0	0	0	0
Total	79	16	79	16
Unallocated Corporate Expenses [Member]
Restructuring Cost and Reserve [Line Items]
Severance charges	0	5,683	1,647	5,683
Consulting fees and other costs	0	2,755	105	2,905
Total	$ 0	$ 8,438	$ 1,752	$ 8,588

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Cost Saving Initiatives and Other Charges (Charges and related liabilities) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 29, 2023	Jul. 30, 2022	Jul. 29, 2023	Jul. 30, 2022	Jan. 28, 2023
Restructuring Reserve [Roll Forward]
Total	$ 79	$ 8,771	$ 2,173	$ 8,921
Severance Charges
Restructuring Reserve [Roll Forward]
Restructuring charges			2,068
Cash payments			(4,946)
Non-cash charges			0
Restructuring Reserve	205		205		$ 3,083
Consulting Fees And Other Costs
Restructuring Reserve [Roll Forward]
Restructuring charges			105
Cash payments			(165)
Non-cash charges			0
Restructuring Reserve	$ 0		$ 0		$ 60

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Cost Saving Initiatives and Other Charges (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jul. 30, 2022	Jul. 30, 2022
Restructuring Cost and Reserve [Line Items]
Restructuring And Related Cost, Noncash Inventory Adjustment	$ 5.9	$ 5.9
Restructuring And Related Cost, Purchase Order Cancellation Fees	1.1	1.1
Direct [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring And Related Cost, Noncash Inventory Adjustment	5.1	5.1
Indirect [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring And Related Cost, Noncash Inventory Adjustment	1.0	1.0
Pura Vida
Restructuring Cost and Reserve [Line Items]
Restructuring And Related Cost, Noncash Inventory Adjustment	$ 0.9	$ 0.9

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Segment Reporting - Additional Information (Details)	6 Months Ended
	Jul. 29, 2023 location Segment
Segment Reporting [Abstract]
Number of operating segments | Segment	3
Number of specialty retail locations | location	1,700

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Segment Reporting - Schedule of Net Revenues and Operating Income Information for Reportable Segments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 29, 2023	Jul. 30, 2022	Jul. 29, 2023	Jul. 30, 2022
Segment Reporting Information [Line Items]
Net revenues	$ 128,172	$ 130,371	$ 222,534	$ 228,830
Segment operating income	30,825	(14,572)	44,433	(2,534)
Unallocated corporate expenses	(17,954)	(28,249)	(37,948)	(48,520)
Operating income (loss)	12,871	(42,821)	6,485	(51,054)
Direct [Member]
Segment Reporting Information [Line Items]
Net revenues	85,702	87,013	144,607	148,649
Indirect [Member]
Segment Reporting Information [Line Items]
Net revenues	17,363	17,325	32,736	34,302
Pura Vida
Segment Reporting Information [Line Items]
Net revenues	25,107	26,033	45,191	45,879
Operating Segments | Direct [Member]
Segment Reporting Information [Line Items]
Net revenues	85,702	87,013	144,607	148,649
Segment operating income	20,621	10,044	27,961	15,547
Operating Segments | Indirect [Member]
Segment Reporting Information [Line Items]
Net revenues	17,363	17,325	32,736	34,302
Segment operating income	6,204	3,918	10,910	9,397
Operating Segments | Pura Vida
Segment Reporting Information [Line Items]
Net revenues	25,107	26,033	45,191	45,879
Segment operating income	$ 4,000	$ (28,534)	$ 5,562	$ (27,478)

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Label	Element	Value
Capital Expenditures Incurred but Not yet Paid	us-gaap_CapitalExpendituresIncurredButNotYetPaid	$ 250,000
Capital Expenditures Incurred but Not yet Paid	us-gaap_CapitalExpendituresIncurredButNotYetPaid	1,353,000
Capital Expenditures Incurred but Not yet Paid	us-gaap_CapitalExpendituresIncurredButNotYetPaid	363,000
Capital Expenditures Incurred but Not yet Paid	us-gaap_CapitalExpendituresIncurredButNotYetPaid	$ 199,000