Vera Bradley, Inc. (NASDAQ:VRA) stock fell 3.95% (As on June 12, 11:18:04 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the first quarter of FY25. The company’s gross profit for the first quarter was $22.8 million, representing 44.1% of net revenues, down from 50.1% in the prior year. On a non-GAAP basis, gross profit was $24.6 million, or 47.5% of net revenues. The decline in gross profit margin was attributed to a shift from brick-and-mortar sales to online channels, which increased outbound freight costs. Operating loss from continuing operations was $17.9 million, or 34.6% of net revenues, compared to $10.6 million, or 15.6% of net revenues, in the prior year. Non-GAAP operating loss was $13.6 million, or 26.3% of net revenues. The Vera Bradley Direct segment reported revenues of $43.1 million, a 23.6% decrease from the previous year, with comparable sales declining by 25.0%. The Indirect segment saw revenues of $8.6 million, a 25.6% decrease, primarily due to reduced specialty and key account orders. As of May 3, 2025, Vera Bradley Inc had cash and cash equivalents totaling $11.3 million, down from $43.8 million at the end of the previous year’s first quarter. Inventory levels slightly decreased to $99.2 million from $101.8 million. The company reported net cash used in operating activities of $17.9 million, reflecting the impact of the net loss and changes in working capital. The Company had no borrowings on its $75 million asset-based lending (“ABL”) facility at quarter end.

Meanwhile, on March 11, 2025, the Company entered into an Interest Purchase Agreement (the “Agreement”) to sell one hundred percent (100%) of Creative Genius, Inc., which operates under the name Pura Vida Bracelets. The sale consummated on March 31, 2025. As a result, the operations of Pura Vida have been classified as discontinued operations in the consolidated financial statements.

VRA in the first quarter of FY25 has reported the adjusted loss per share of $0.66, missing the analysts’ estimates for the adjusted earnings per share of $0.05. The company had reported the adjusted revenue decline of 23.6 percent to $51.7 million in the first quarter of FY25, missing the analysts’ estimates for revenue of $53.48 billion. Comparable sales declined 25.0% in the first quarter, driven by traffic and conversion declines predominantly in our full-line and outlet stores. During the first quarter, the Company also opened two full-line stores and closed two underperforming full-line stores.