Vera Bradley, Inc. (NASDAQ:VRA) hit an all time new low yesterday after the handbag maker said that it failed to make new customers. The company stated while its fourth quarter earnings call that efforts to find new customers are taking longer than estimated. In view of which, the retailer released a dreary outlook for its current quarter and fiscal year while it said that the goal of $1 billion sales in five years appears unachievable.
Shifting product line
The company’s disturbing tone shocked the investors, who rushed to sell the shares, sending it down by over 16% to $15.14. Vera Bradley, Inc. (NASDAQ:VRA) CEO Robert Wallstrom said that the momentum expected has not yet come. He said that while the core customer base is intact, the interest from new customers remains sluggish, and both traffic and sales pose challenge. Before Wallstrom took the helm, Vera was solely manufacturing cotton-quilted products, which could compete only 10% of the overall market share. Hence, Wallstrom helped to shift the product orientation to newer range, which included laser-cut, microfiber and leather handbags.
Still undeterred with the failure, Vera Bradley, Inc. (NASDAQ:VRA) is determined that it will reach out to the customers through adopting aggressive measures. The company is prepared to spend more on marketing and opening new outlets while it plans to partner with more departmental stores. Wallstorm did not hesitate to agree that the turnaround is taking a longer time, but reiterated that he will be successful in doing so.
For the current quarter, Vera Bradley, Inc. (NASDAQ:VRA) estimated earnings per share in the range of $0.0-$0.3%, which is wide below the market consensus of $0.16 per share. The revenues are projected in between $103-$109 million as against the market estimates of $121.9 million. For the new fiscal year, Vera Bradley, Inc. (NASDAQ:VRA) forecast earnings of $0.82-$0.92 on revenue of $510-$525 million. Like any struggling retailer, Vera has been trying to push sales through discounting but it might roll back such promotional schemes this year.