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What changed in Vera Bradley, Inc.'s 10-K — 2025 vs 2026

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Paragraph-level year-over-year comparison of Vera Bradley, Inc.'s 2025 and 2026 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2026 report.

+253 added−293 removedSource: 10-K (2025-03-28) vs 10-K (2024-03-29)

Top changes in Vera Bradley, Inc.'s 2026 10-K

253 paragraphs added · 293 removed · 225 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

91 edited+10 added−23 removed64 unchanged
Biggest changeWe have refreshed our brand image with a focus on showing what “living free” looks and feels like – showing real places, real moments, and real faces that are authentic, diverse, and inclusive. We are recentering our brand ethos on “living life to the fullest” and sharpening our focus on Gen Z.
Biggest changePura Vida's target customer is free-spirited, a trendsetter, and in the midst of discovering who she is and where she is heading. Brand . Pura Vida has refreshed the brand image with a focus on being more relevant to Gen Z through showing real places, real moments, and real faces that are authentic, diverse, and inclusive.
Bags. Bags are a core part of our product offerings and are the primary component of every seasonal assortment. The category consists of classic and new styles developed by our product development team. Our bag product category includes items such as backpacks, totes, crossbodies, lunch bags, satchels, clutches, and baby bags.
Bags are a core part of our product offerings and are the primary component of every seasonal assortment. The category consists of classic and new styles developed by our product development team. Our bag product category includes items such as backpacks, totes, crossbodies, lunch bags, satchels, clutches, and baby bags.
The reportable segments within the Vera Bradley brand are VB Direct and VB Indirect. VB Direct . The VB Direct business consists of sales of Vera Bradley products through Vera Bradley full-line and outlet stores in the United States; e-commerce sites (verabradley.com, outlet.verabradley.com, and international.verabradley.com); and typically the Vera Bradley annual outlet sale in Fort Wayne, Indiana.
The reportable segments within the Vera Bradley brand are VB Direct and VB Indirect. VB Direct . The VB Direct business consists of sales of Vera Bradley products through Vera Bradley full-line and outlet stores in the United States; e-commerce sites (verabradley.com, outlet.verabradley.com, and international.verabradley.com); and the Vera Bradley annual outlet sale in Fort Wayne, Indiana.
We are focusing on restoring brand relevancy, targeting casual and feminine 35 to 54 year old women who value both fashion and function. Our focus on the 35 to 54 year old led us in search of data to understand where and how she shops.
Consumer . We are focusing on restoring brand relevancy, targeting casual and feminine 35 to 54 year old women who value both fashion and function. Our focus on the 35 to 54 year old led us in search of data to understand where and how she shops.
Typically, approximately 95% of the merchandise found in our outlet stores consists of exclusive styles. Outlet stores are an integral part of our distribution strategy, as this format provides an additional channel of distribution for our products and enables us to better target value-oriented customers. Our outlet stores average approximately 3,500 square feet per store.
Typically, approximately 93% of the merchandise found in our outlet stores consists of exclusive styles. Outlet stores are an integral part of our distribution strategy, as this format provides an additional channel of distribution for our products and enables us to better target value-oriented customers. Our outlet stores average approximately 3,500 square feet per store.
It includes, among other things, the reveal of our new and elevated full-line branding and marketing, product, store design, and website. Our work on this initiative was informed by consumer research and current perceptions of the brand from both buyers and non-buyers.
It included, among other things, the reveal of our new and elevated full-line branding and marketing, product, store design, and website. Our work on this initiative was informed by consumer research and current perceptions of the brand from both buyers and non-buyers.
Copyrights and Trademarks For Vera Bradley, the development of new patterns includes the design of primary and secondary prints. Once developed, we generally copyright our patterns as appropriate. We currently have over 1,250 copyrights related to the Vera Bradley business.
Copyrights and Trademarks For Vera Bradley, the development of new patterns includes the design of primary and secondary prints. Once developed, we generally copyright our patterns as appropriate. We currently have over 1,350 copyrights related to the Vera Bradley business.
The majority of our Indirect retailers have been customers for over five years. 10 Table of Contents Indirect Sales Force We believe that having a combination of an in-house field sales force and a third-party agency, covering certain geographies, results in a more consistent brand presentation and messaging, enhanced support for our Indirect customers, and a more predictable, scalable, and cost-efficient business model.
The majority of our Indirect retailers have been customers for over five years. Indirect Sales Force We believe that having a combination of an in-house field sales force and a third-party agency, covering certain geographies, results in a more consistent brand presentation and messaging, enhanced support for our Indirect customers, and a more predictable, scalable, and cost-efficient business model.
Fluctuations in sales and operating income in any fiscal quarter are affected by the timing of seasonal wholesale shipments and other events affecting retail sales. 9 Table of Contents Channels of Distribution We distribute our Vera Bradley products through our VB Direct (including e-commerce and retail stores) and VB Indirect segments and Pura Vida products primarily through e-commerce, wholesale retailers, and retail stores.
Fluctuations in sales and operating income in any fiscal quarter are affected by the timing of seasonal wholesale shipments and other events affecting retail sales. Channels of Distribution We distribute our Vera Bradley products through our VB Direct (including e-commerce and retail stores) and VB Indirect segments and Pura Vida products primarily through e-commerce, wholesale retailers, and retail stores.
The feedback gave us insight into improvement opportunities and is instrumental in decisions we make to shape, strengthen, and improve our Company. As a result of the survey feedback, over the last several years we have made meaningful improvements to benefits, career development, compensation, mental health and 13 Table of Contents wellness programs, and our facilities.
The feedback gave us insight into improvement opportunities and is instrumental in decisions we make to shape, strengthen, and improve our Company. As a result of the survey feedback, over the last several years we have made meaningful improvements to benefits, career development, compensation, mental health and wellness programs, and our facilities.
No information contained on our website is intended to be included as part of, or incorporated by reference into, this Annual Report on Form 10-K. 15 Table of Contents
No information contained on our website is intended to be included as part of, or incorporated by reference into, this Annual Report on Form 10-K. 14 Table of Contents
If we violate any laws or regulations, however, it could have a material adverse effect on our business or financial performance. Information About Our Executive Officers The following table sets forth certain information concerning each of our executive officers: Name Age Position(s) Jacqueline Ardrey 54 Chief Executive Officer, President and Director, Vera Bradley, Inc.
If we violate any laws or regulations, however, it could have a material adverse effect on our business or financial performance. 13 Table of Contents Information About Our Executive Officers The following table sets forth certain information concerning each of our executive officers: Name Age Position(s) Jacqueline Ardrey 55 Chief Executive Officer, President and Director, Vera Bradley, Inc.
We believe our direct mail medium generates excitement and awareness about the Vera Bradley brand and allows us to reach both new and loyal customers in their homes. We use direct mail for prospecting, customer retention, and reactivation. Pura Vida Retention Advertising. We connect with our established customers with regular emails, affiliate marketing, SMS marketing, and social media marketing.
We believe our direct mail medium generates excitement and awareness about the Vera Bradley brand and allows us to reach both new and loyal customers in their homes. We use direct mail for prospecting, customer retention, and reactivation. Pura Vida Retention Advertising. Pura Vida has connected with established customers through regular emails, affiliate marketing, SMS marketing, and social media marketing.
BetterWork brings diverse groups toge ther (governments, global brands, factory owners, unions, and workers) to improve working conditions in the garment industry and make the sector more competitive. These audits encompass both the Vera Bradley and Pura Vida brands as they relate to our purchases in Cambodia and Bangladesh.
We partner with BetterWork to conduct our factory audits. BetterWork brings diverse groups toge ther (governments, global brands, factory owners, unions, and workers) to improve working conditions in the garment industry and make the sector more competitive. These audits encompass both the Vera Bradley and Pura Vida brands as they relate to our purchases in Cambodia and Bangladesh.
Our visual merchandising program provides our sales consultants with a framework to guide our Indirect customers regarding optimal product placement and display that is intended to reinforce the message that our brand is distinctive. Pura Vida Segment E-Commerce. Pura Vida products are available on our websites, www.puravidabracelets.com, www.puravidabracelets.eu, and www.puravidabracelets.ca.
Our visual merchandising program provides our sales consultants with a framework to guide our Indirect customers regarding optimal product placement and display that is intended to reinforce the message that our brand is distinctive. Pura Vida Segment E-Commerce. Pura Vida products are available on our website, www.puravidabracelets.com.
Mr. Schwindle began his career at Deloitte & Touche, LLP. 14 Table of Contents Mark C. Dely joined the Company in August 2016 as our Vice President, Chief Legal Officer and Corporate Secretary and was promoted to also serve as the Chief Administrative Officer in September 2017. Between January 2013 and August 2016, Mr.
Mr. Schwindle began his career at Deloitte & Touche, LLP. Mark C. Dely joined the Company in August 2016 as our Vice President, Chief Legal Officer and Corporate Secretary and was promoted to also serve as the Chief Administrative Officer in September 2017. Between January 2013 and August 2016, Mr.
We will continue to look for the right strategic partners and licensees that can augment the brand and provide established distribution networks for certain categories of business. Additional arrangements will be launched in fiscal 2025. Pura Vida . Pura Vida continues to develop new styles and re-invent existing styles.
We will continue to look for the right strategic partners and licensees that can augment the brand and provide established distribution networks for certain categories of business. Additional arrangements will be launched in fiscal 2026. Pura Vida . Pura Vida continued to develop new styles and re-invent existing styles.
Although the assortment will look new, it is unmistakably Vera Bradley, and our existing customers will still recognize their favorite styles and our distinctive colors, patterns, and quilting. 5 Table of Contents We will innovate into strategic adjacent lifestyle item introductions that make sense for our customers.
Although the assortment will look new, it is unmistakably Vera Bradley, and our existing customers will still recognize their favorite styles and our distinctive colors, patterns, and quilting. We will innovate into strategic adjacent lifestyle item introductions that make sense for our customers.
Our trademarks include “Vera Bradley” and “Pura Vida.” We aggressively police our trademarks and copyrights and pursue infringers and counterfeiters both domestically and internationally. Our trademarks will remain in existence for as long as we continue to use and renew them in advance of their expiration dates. We have no material patents.
Our trademarks include “Vera Bradley” and “Pura Vida.” We aggressively police our trademarks and copyrights and pursue infringers and counterfeiters both domestically and internationally. Our trademarks will remain in existence for as long as we continue to use and renew them in advance of their expiration dates.
We have a combination of in-house and external sales personnel who work with our wholesale retailers regarding order fulfillment and compilation. Retail. Pura Vida has five retail store locations. Four of the locations opened in fiscal 2023 and one location opened in fiscal 2022.
We have a combination of in-house and external sales personnel who work with our wholesale retailers regarding order fulfillment and compilation. Retail. Pura Vida has seven retail store locations. Two of the locations opened in fiscal 2025, four opened in fiscal 2023, and one location opened in fiscal 2022.
The VB Indirect business consists of sales of Vera Bradley products to approximately 1,600 sp ecialty retail locations, substantially all of which are located in the United States; sales to 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 VB Indirect business consists of sales of Vera Bradley products to approximately 1,200 specialty retail locations, substantially all of which are located in the United States; sales to 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.
As of February 3, 2024, we operated 81 outlet stores, all located in the United States. Store Location Selection Strategy. Our store location decisions for both full-line and outlet stores are made based upon our comprehensive retail strategy that includes actual and planned penetration in both Indirect and Direct segments, as well as existing e-commerce demand.
As of February 1, 2025, we operated 87 outlet stores, all located in the United States. Store Location Selection Strategy. Our store location decisions for both full-line and outlet stores are made based upon our comprehensive retail strategy that includes actual and planned penetration in both Indirect and Direct segments, as well as existing e-commerce demand.
Our Instagram has grown to nearly 600,000 followers and is our most highly engaged social medium. In addition, we often partner with brand-right bloggers to promote our products. Mall Advertising . We had representation in key markets with mall partner participation. Collaborations and holiday promotions were the primary focus for our retail store locations.
Our Instagram has grown to approximately 612,000 followers and is our most highly engaged social medium. In addition, we often partner with brand-right influencers to promote our products. Mall Advertising . We had representation in key markets with mall partner participation. Collaborations and holiday promotions were the primary focus for our retail store locations.
We have developed a retail presence through our full-line stores, all located in the United States, which provides us with a format to showcase our brand and the full array of Vera Bradley products. As of February 3, 2024, we operated 43 full-line stores averaging approximately 2,000 square feet per store.
We have developed a retail presence through our full-line stores, all located in the United States, which provides us with a format to showcase our brand and the full array of Vera Bradley products. As of February 1, 2025, we operated 39 full-line stores averaging approximately 2,000 square feet per store.
Vera Bradley Retention Advertising. We communicate with our established customers consistently throughout the year with regular e-mails, social media, and notifications, as well as seasonal direct mail related to the Vera Bradley brand.
We communicate with our established customers consistently throughout the year with regular e-mails, social media, and SMS, as well as seasonal direct mail related to the Vera Bradley brand.
The goal of our 360-brand marketing program is to drive brand awareness and desirability, as well as connect with consumers where they are. We will continue to drive social media engagement by employing more user-generated content, growing our influencer and ambassador programs, further enhancing social storytelling and social selling, expanding Facebook Live and Reels, and growing TikTok engagement.
The goal of our 360-brand marketing program is to drive brand awareness and desirability, as well as connect with consumers where they are. We will continue to drive social media engagement by employing more user-generated content, growing our influencer and ambassador programs, further enhancing social storytelling and social selling, expanding Facebook, Instagram, and TikTok engagement. Vera Bradley Retention Advertising.
To continue to assist in this risk m itigation, our sourcing team reduced our Vera Bradley production in China from over 50% in fiscal 2019 to approximatel y 15% in f iscal 2024.
To continue to assist in this risk m itigation, our sourcing team reduced our Vera Bradley production in China from over 50% in fiscal 2019 to approximatel y 11% in f iscal 2025.
Human Capital Equal employment opportunities are available to all persons at Vera Bradley, Inc. without regard to race, sex, sexual orientation, gender, gender identity, gender expression, marital status, age, color, religion, creed, national origin, ancestry, mental or physical disability, medical condition, genetic information, military or veteran status or any other category protected under applicable federal, state, or local law.
We have no material patents. 12 Table of Contents Human Capital Equal employment opportunities are available to all persons at Vera Bradley, Inc. without regard to race, sex, sexual orientation, gender, gender identity, gender expression, marital status, age, color, religion, creed, national origin, ancestry, mental or physical disability, medical condition, genetic information, military or veteran status or any other category protected under applicable federal, state, or local law.
Vera Bradley Indirect Segment As of February 3, 2024, we sold our products in approximately 1,600 specialty retail locations, as well as department stores, national accounts, third-party e-commerce sites, and third-party inventory liquidators, as well as through licensing agreements. We currently sell our products in approximately 300 department store locations as well as Amazon.com and other marketplaces.
Vera Bradley Indirect Segment As of February 1, 2025, we sold our products in approximately 1,200 specialty retail locations, as well as department stores, national accounts, third-party e-commerce sites, and third-party inventory liquidators, as well as through licensing agreements. We currently sell our products in approximately 250 department store locations as well as Amazon.com and other third party marketplaces.
Michael Schwindle 56 Chief Financial Officer, Vera Bradley, Inc. Mark C. Dely 48 Chief Administrative & Legal Officer and Corporate Secretary, Vera Bradley, Inc. Alison Hiatt 53 Chief Marketing Officer, Vera Bradley Jacqueline Ardrey has served as our Chief Executive Officer and Director since November 2022. Prior to joining Vera Bradley, Inc., Ms.
Michael Schwindle 57 Chief Financial Officer, Vera Bradley, Inc. Mark C. Dely 49 Chief Administrative & Legal Officer and Corporate Secretary, Vera Bradley, Inc. Alison Hiatt 54 Chief Marketing Officer, Vera Bradley Jacqueline Ardrey has served as our Chief Executive Officer and Director since November 2022. Prior to joining Vera Bradley, Inc., Ms.
Our competitors include not only established companies that are expanding their production and marketing of handbags and accessories, but also frequent new entrants to the market. We directly compete with wholesalers and direct sellers of branded handbags and accessories.
The market for handbags and accessories, in particular, is highly competitive. Our competitors include not only established companies that are expanding their production and marketing of handbags and accessories, but also frequent new entrants to the market. We directly compete with wholesalers and direct sellers of branded handbags and accessories.
Our retention advertising focuses on informing Pura Vida customers of new product launches, exclusive offers, inventory restocks of best sellers, promoting referral and loyalty rewards, and the latest Pura Vida news. New Customer Acquisition Advertising. Pura Vida focuses on digital advertising through Facebook, Instagram, TikTok, Google, Snapchat, and Pinterest to acquire new customers.
Pura Vida's retention advertising focuses on informing customers of new product launches, exclusive offers, inventory restocks of best sellers, promoting referral and loyalty rewards, and the latest Pura Vida news. 8 Table of Contents New Customer Acquisition Advertising. Pura Vida has focused on digital advertising through Facebook, Instagram, TikTok, Google, Snapchat, and Pinterest to acquire new customers.
The Pura Vida segment represents revenues generated through the Pura Vida websites (www.puravidabracelets.com, www.puravidabracelets.eu, and www.puravidabracelets.ca); through the distribution of Pura Vida-branded products to wholesale retailers and department stores, substantially all of which are located in the United States; and through its five retail stores.
The Pura Vida segment represents revenues generated through the Pura Vida website (www.puravidabracelets.com); through the distribution of Pura Vida-branded products to wholesale retailers and department stores, substantially all of which are located in the United States; and through its seven retail stores.
This information provides us with deeper insight into the products and categories that are of the highest interest to our customers and allows us to better target our customers with appropriate messages. As of February 3, 2024, we had approximately 2.0 million Facebook fans, approximately 70,000 Twitter ("X") followers, and approximately 45,000 TikTok followers.
This information provides us with deeper insight into the products and categories that are of the highest interest to our customers and allows us to better target our customers with appropriate messages. As of February 1, 2025, we had approximately 2.0 million Facebook followers, nearly 70,000 Twitter ("X") followers, and approximately 55,000 TikTok followers.
To reach both existing and new customers and bring the Pura Vida brand to life, we have hosted events at our retail stores, in-person brand activations on college campuses and relevant public events, and built a brand presence at partner-owned events such as the World Surf League.
To reach both existing and new customers and bring the brand to life, Pura Vida has hosted events at our retail stores, in-person brand activations on college campuses and relevant public events, and built a brand presence at partner-owned events such as the Varsity Cheer League.
We have continued an active supply chain diversification process to ensure a focus on maintaining flexibility and to help mitigate the risk of concentrated production, similar to the Vera Bradley supply chain.
Pura Vida has continued an active supply chain diversification process to ensure a focus on maintaining flexibility and to help mitigate the risk of concentrated production, similar to the Vera Bradley supply chain.
We are consistently testing new audiences, channels, creative ads, and promotions to maximize our return on paid media spend. Ambassador Program . We have a grassroots program of brand ambassadors who drive customers to our website and generate buzz in local communities, digitally through their social media channels, in person through events, and through word of mouth.
Pura Vida has consistently tested new audiences, channels, creative ads, and promotions to maximize our return on paid media spend. Ambassador Program . Pura Vida has a grassroots program of brand ambassadors who drive customers to the website and generate buzz in local communities, digitally through their social media channels, in person through events, and through word of mouth.
Fiscal Year Ended February 3, 2024 January 28, 2023 January 29, 2022 Bags 33.9 % 34.3 % 32.0 % Travel 19.3 % 18.8 % 17.5 % Accessories 30.8 % 32.0 % 34.5 % Home 8.8 % 8.5 % 8.6 % Apparel/Footwear 4.4 % 3.7 % 4.7 % Other (1) 2.8 % 2.7 % 2.7 % Total 100.0 % 100.0 % 100.0 % (1) Includes primarily stationery, licensing, freight, merchandising, and gift card breakage revenue.
Fiscal Year Ended February 1, 2025 February 3, 2024 January 28, 2023 Bags 37.7 % 33.9 % 34.3 % Travel 21.8 % 19.3 % 18.8 % Accessories 26.7 % 30.8 % 32.0 % Home 7.7 % 8.8 % 8.5 % Apparel/Footwear 3.3 % 4.4 % 3.7 % Other (1) 2.8 % 2.8 % 2.7 % Total 100.0 % 100.0 % 100.0 % (1) Includes primarily stationery, licensing, freight, merchandising, and gift card breakage revenue. 6 Table of Contents Bags.
The top 25% of our specialty retailers account for approximately 80% of total specialty retailer revenue. No single Indirect retailer represented more than 6% of consolidated net revenues in fiscal 2024, with the top ten Indirect retailers, representing in the aggregate approximately 65% of total Indirect segment net revenues.
The top 25% of our specialty retailers account for approximately 84% of total specialty retailer revenue. No single Indirect retailer represented more than 8% of consolidated net revenues in fiscal 2025, with the top ten Indirect retailers representing in the aggregate, approximately 78% of total Indirect segment net revenues.
Consequently, an essential requirement for the success of our stores is our ability to attract, train, and retain talented, highly motivated district managers, store managers, and sales associates. E-Commerce . We sell our products through the verabradley.com, outlet.verabradley.com and international.verabradley.com websites.
Consequently, an essential requirement for the success of our stores is our ability to attract, train, and retain talented, highly motivated district managers, store managers, and sales associates. 9 Table of Contents E-Commerce . We sell our products through the the Vera Bradley websites (verabradley.com, international.verabradley.com, and outlet.verabradley.com) as well as direct to consumer marketplaces.
The subscription club is a mechanism to continue to build brand loyalty and stimulate higher retention. Wholesale. The Pura Vida wholesale channel is comprised primarily of specialty stores including Tilly’s, The Paper Store, Ron Jon Surf Shops, and Hallmark stores, among others. Pura Vida also sells in select department stores and has a presence on Amazon.com through a third-party wholesaler.
The Pura Vida wholesale channel is comprised primarily of specialty stores including Tilly’s, The Paper Store, Ron Jon Surf Shops, and Hallmark stores, among others. Pura Vida also sells in select department stores and has a presence on Amazon.com through a third-party wholesaler.
Pura Vida’s website immerses visitors in the brand, its products, and its social mission. Pura Vida is a digitally native brand, and the e-commerce storefront continues to be the primary source of revenues for the Pura Vida business. The e-commerce site also includes a monthly bracelet and jewelry subscription club.
Pura Vida’s website immerses visitors in the brand, its products, and its social mission. Pura Vida is a digitally native brand, and the e-commerce storefront continues to be the primary source of revenues for the Pura Vida business. Wholesale.
We put this standard into practice through our hiring, training, and an annual affirmative action program. As of February 3, 2024, we had approximately 2,135 employees.
We put this standard into practice through our hiring, training, and an annual affirmative action program. As of February 1, 2025, we had approximately 1,725 employees.
As of February 3, 2024, our in-house sales team consisted of approximate ly 20 full-time sales consultants. In addition to acquiring new and growing existing accounts, our sales consultants serve as a support center for our Indirect customers by assisting and educating them in areas such as merchandising and visual presentation, marketing the brand, product selection, and inventory management.
In addition to acquiring new and growing existing accounts, our sales consultants serve as a support center for our Indirect customers by assisting and educating them in areas such as merchandising and visual presentation, marketing the brand, product selection, and inventory management.
Of the total, approximately 1,495 were engaged in Vera Bradley retail selling positions; approximately 280 were engaged in Vera Bradley distribution, sourcing and quality functions; approximately 35 were engaged in Vera Bradley product design; approximately 90 were involved in the Pura Vida business, including the Pura Vida retail stores; and approximately 235 were engaged in corporate support and administrative functions.
Of the total, approximately 1,215 were engaged in Vera Bradley retail selling positions; approximately 190 were engaged in Vera Bradley distribution, sourcing and quality functions; approximately 25 were engaged in Vera Bradley product design; approximately 95 were involved in the Pura Vida business, including the Pura Vida retail stores; and approximately 200 were engaged in corporate support and administrative functions.
This work culminated in our long-term strategic plan, Project Restoration, which addresses each of these four pillars. Through Project Restoration, we are taking targeted and prudent actions to stabilize revenues, while remaining focused on strong financial discipline. We believe execution of Project Restoration will drive long-term profitable growth and deliver value to our shareholders.
Through Project Restoration, we are taking targeted and prudent actions to stabilize revenues, while remaining focused on strong financial discipline. We believe execution of Project Restoration will drive long-term profitable growth and deliver value to our shareholders.
Our annual outlet sale is typically held in the Allen County War Memorial Coliseum Exposition Center in Fort Wayne, Indiana. The annual outlet sale is an important tradition for Vera Bradley, has many loyal followers, and is an opportunity for us to sell our retired merchandise at discounted prices in a brand-right fashion.
The annual outlet sale is an important tradition for Vera Bradley, has many loyal followers, and is an opportunity for us to sell our retired merchandise at discounted prices in a brand-right fashion.
Public Relations and Product Placement. Vera Bradley has received considerable editorial exposure in the press, with mentions in Travel & Leisure, People, Real Simple, Today, US Weekly, Good Morning America, Refinery 29, Southern Living, Glamour, Seventeen, Elle, Women's Wear Daily, Pop Sugar, and Good Housekeeping.
Vera Bradley has received considerable editorial exposure in the press, with mentions in Travel & Leisure, People, Real Simple, Today, US Weekly, Good Morning America, Refinery 29, Southern Living, Glamour, Seventeen, Elle, Women's Wear Daily, Pop Sugar, and Good Housekeeping. In addition, we have expanded our public relations efforts to reach popular online influencers and content creators. Partnerships.
On January 30, 2023, the Company acquired the remaining interest in Pura Vida. Similar to the Vera Bradley brand, Pura Vida was founded by two friends, Griffin Thall and Paul Goodman. Thall and Goodman, from Southern California, were traveling through Costa Rica in 2010 and crossed paths with two bracelet artisans.
Similar to the Vera Bradley brand, Pura Vida was founded by two friends, Griffin Thall and Paul Goodman. Thall and Goodman, from Southern California, were traveling through Costa Rica in 2010 and crossed paths with two bracelet artisans. Thall and Goodman asked the artisans to make 400 bracelets to take home with them.
Baekgaard retired from Vera Bradley operations in 2017 but continues to serve 4 Table of Contents on the Board of Directors and as a brand ambassador. Ms. Miller retired as our National Spokesperson in October 2012 and from the Board of Directors in August 2019. In July 2019, Vera Bradley, Inc. acquired a majority interest in Pura Vida.
Miller retired as our National Spokesperson in October 2012 and from the Board of Directors in August 2019. 4 Table of Contents In July 2019, Vera Bradley, Inc. acquired a majority interest in Pura Vida. On January 30, 2023, the Company acquired the remaining interest in Pura Vida.
During fiscal 2024, we made significant progress on this Company-wide, comprehensive initiative, focusing on the four key pillars of the business for each brand. Vera Bradley At Vera Bradley, we will launch the first manifestation of our Project Restoration in July 2024 which we believe will be a significant pivot from where we are today.
During fiscal 2025, we made significant progress on this Company-wide, comprehensive initiative, focusing on the four key pillars of the business for each brand. Vera Bradley At Vera Bradle y, we launched the first manifestation of our Project Restoration in July fiscal 2025.
For Vera Bradley, we have captured approximately 7.8 million active customer e-mail addresses in our online customer file, with many of these customers providing age, occupation, and location data.
Vera Bradley can be found on Facebook, Instagram, TikTok, X, Pinterest, and YouTube. For Vera Bradley, we have captured approximately 3.3 million active subscribed customer e-mail addresses in our online customer file, with many of these customers providing age, occupation, and location data.
Management Information Systems We believe that high levels of automation and technology are essential to maintain our competitive position. We maintain computer hardware, applications, and networks to enhance and accelerate the design process, to support the sale and distribution of our products to our customers, and to improve the integration and efficiency of our operations.
We maintain computer hardware, applications, and networks to enhance and accelerate the design process, to support the sale and distribution of our products to our customers, and to improve the integration and efficiency of our operations.
Our Company-wide diversity and inclusion initiative, Project Quilt, continues to enhance diversity, equality, and inclusion, focusing on three key areas – the Associate Experience, the Customer Experience, and the Community Experience. Engagement .
Our Company-wide diversity and inclusion initiative, Project Quilt, continues to enhance diversity, equality, and inclusion, focusing on three key areas – the Associate Experience, the Customer Experience, and the Community Experience. The goal of the program is to make all associates feel welcome and a part of the Vera Bradley community. Engagement .
We offer a mix of seasonally inspired designs and next generation designs of core bestsellers. 6 Table of Contents Our Products The following chart presents net revenues generated by each of the Company’s product categories and other revenues as a percentage of our total net revenues for fiscal years 2024, 2023, and 2022.
Each product launch collection typically consists of 10 to 30 customer choices, offering a mix of seasonally inspired designs and next generation designs of core bestsellers. The following chart presents net revenues generated by each of the Company’s product categories and other revenues as a percentage of our total net revenues for fiscal years 2025, 2024, and 2023.
Maintaining brand-right wholesale relationships is important, and we are actively working with new specialty retailers where we know our customer is shopping. We will also accelerate our digital-first focus. We are improving our online shopping experience and elevating full-line creative and experiences, while offering our outlet assortment online at outlet.verabradley.com for the first time ever.
Maintaining brand-right wholesale relationships is important, and we are actively working to acquire new specialty and key account retailers where we know our customer is shopping. We have improved our online shopping experience through elevating full-line creative and experiences, while offering our outlet assortment online at outlet.verabradley.com.
Thall and Goodman asked the artisans to make 400 bracelets to take home with them. Upon returning to San Diego, Thall and Goodman placed the bracelets in a bowl at a local boutique. Within days, the bracelets sold out and customers were asking for more. Thall and Goodman quickly recognized the significance of these simple string bracelets.
Upon returning to San Diego, Thall and Goodman placed the bracelets in a bowl at a local boutique. Within days, the bracelets sold out and customers were asking for more. Thall and Goodman quickly recognized the significance of these simple string bracelets. They were more than just ordinary locally-crafted bracelets; they symbolized a movement valuing the simple things in life.
Pura Vida remains one of the most highly-engaged brands in the accessories space, surpassing 2.2 million followers on Instagram and is consistently listed as one of the most engaged jewelry brands on Instagram.
Pura Vida remains one of the most highly-engaged brands in the accessories space, with nearly 2.2 million followers on Instagram and is consistently listed as one of the most engaged jewelry brands on Instagram. Product . Pura Vida has focused on delivering unique, fun, playful product designs that are affordable and accessible.
We will continue to innovate in our hero core category of string bracelets as well as other jewelry items, and we will opportunistically explore additional close-in, adjacent categories that make sense for our business and our customers. Approximately a third of the total Pura Vida business is comprised of jewelry categories other than bracelets, such as rings, anklets, and necklaces.
Pura Vida has innovated in the hero core category of string bracelets as well as other jewelry items. Approximately a third of the total Pura Vida business is comprised of jewelry categories other than bracelets, such as rings, anklets, and necklaces. Channel .
Pura Vida products for the U.S. e-commerce site and wholesale accounts are distributed primarily through a third-party provider in Tijuana, Mexico. Pura Vida also distributes product through third-party providers in the Netherlands and Canada, which supports European e-commerce and Canadian wholesale operations, respectively.
Pura Vida products for the U.S. e-commerce site and wholesale accounts are distributed primarily through a third-party provider in Tijuana, Mexico. Pura Vida also distributes product through third-party provider in Canada, which supports Canadian wholesale operations. Management Information Systems We believe that high levels of automation and technology are essential to maintain our competitive position.
We believe that all of our products are in similar competitive positions with respect to the number of competitors they face and the level of competition within each product line. Due to the number of different products we offer, it is not practicable for us to quantify the number of competitors we face.
Competition For both Vera Bradley and Pura Vida, we face strong competition in each of the product lines and markets in which we compete. We believe that all of our products are in similar competitive positions with respect to the number of competitors they face and the level of competition within each product line.
Our products compete with other branded products within their product categories and with private label products sold by retailers. Moreover, the general availability of contract manufacturing allows new entrants to relatively easily access the markets in which we compete, which may increase the number of competitors and adversely affect our competitive position and our business.
Moreover, the general availability of contract manufacturing allows new entrants to relatively easily access the markets in which we compete, which may increase the number of competitors and adversely affect our competitive position and our business. We compete against other independent retailers, department stores, catalog retailers, gift retailers, and Internet businesses that engage in the retail sale of similar products.
Our team monitors fashion trends and customer needs by typically attending trend and industry shows, subscribing to trend monitoring services, and engaging in comparison shopping. 7 Table of Contents Our product development team works closely with our marketing and merchandising teams to gather consumer insights through a variety of methodologies, including seasonal market research, in-store testing, scheduled interviews, and online and in-person surveys conducted by our internal team.
Our product development team works closely with our marketing and merchandising teams to gather consumer insights through a variety of methodologies, including seasonal market research, in-store testing, scheduled interviews, and online and in-person surveys conducted by our internal team. Our work is also informed in part by market data analysis provided through our membership in industry services and organizations.
Our retention advertising is geared to keeping Vera Bradley top of mind with our customers, rewarding our customers, and providing them with news of our seasonal launches, new product introductions, and VB Cares initiatives. New Customer Acquisition Advertising. We primarily employ digital (i.e., display banner, mobile, geo-targeting, and pre-roll video) advertising to increase overall brand awareness and attract new customers.
Our retention advertising is geared to keeping Vera Bradley top of mind with our customers, rewarding our customers, and providing them with news of our seasonal launches, new product introductions, and VB Foundation initiatives. New Customer Acquisition Advertising.
At Vera Bradley, our ERP, POS, Business Intelligence, and Order Management systems are on cloud-based platforms, streamlining and simplifying our work and providing for additional capabilities such as mobile POS and multi-company operations on the same platform. We completed our ERP migration during fiscal 2022 for Pura Vida, so that our entire enterprise is on a unified technology platform.
At Vera Bradley, our ERP, POS, Business Intelligence, and Order Management systems are on cloud-based platforms, streamlining and simplifying our work and providing for additional capabilities such as multi-company operations on the same platform. We continue to assess our on-premise and cloud-based technology solutions in an effort to ensure we have the optimal solutions for our business.
We acquire these brand ambassadors through advertising on Instagram and Tiktok, as well as via outreach on our organic and retention channels. PR & Influencer Marketing . We work to tell the Pura Vida brand story through media and editorial placements, seeding with celebrities and relevant publications, and working with brand influencers across various key markets and demographic profiles.
PR & Influencer Marketing . The Pura Vida brand story is told through media and editorial placements, seeding with celebrities and relevant publications, and working with brand influencers across various key markets and demographic profiles.
We are continually focused on looking for new ways to creatively engage and retain our customers, grow brand awareness, and introduce new customers to our brands in a cost-effective manner, but that is becoming more challenging and expensive for both of our brands due in part to rising digital media costs.
We use marketing as a critical tool in our efforts to promote our brands. We are continually focused on looking for new ways to creatively engage and retain our customers, grow brand awareness, and introduce new customers to our brands in a cost-effective manner.
Each launch typically consists of one to three signature cotton-quilted prints, as well as other fabrications including Performance Twill, Re-Active, microfiber, and nylon, some of which are also available in solid colors. These collections of prints and solids are incorporated into the designs of a wide range of products, including bags, accessories, and travel items.
Our Product Release Strategy Vera Bradley . On average, we typically introduce new collections monthly. Each launch typically consists of one to three signature cotton-quilted prints, as well as other fabrications including Featherweight, Leather, Performance Twill, Re-Active, microfiber, and nylon, some of which are also available in solid colors.
Our work with influencers includes collaborations on product and marketing campaigns that drives brand awareness with their audiences and our target demographic. We have also built a network of micro influencers and content creators who post for our brand in exchange for product and exposure on our social channels. Charity Collaborations .
Pura Vida has also built a network of micro influencers and content creators who post for our brand in exchange for product and exposure on our social channels. Charity Collaborations . Pura Vida has partnered with charities to donate to causes that are important to our customers.
Marketing We believe that the growth of our brands and our business is influenced by our ability to introduce and sell our merchandise in a way that clearly conveys the Vera Bradley and Pura Vida brand personalities. We use marketing as a critical tool in our efforts to promote our brands.
Pura Vida has also engaged in collaboration with other relevant brands like Kulani Kinis, and Dutch Brothers Coffee Company to create limited edition products. 7 Table of Contents Marketing We believe that the growth of our brands and our business is influenced by our ability to introduce and sell our merchandise in a way that clearly conveys the Vera Bradley and Pura Vida brand personalities.
We currently have licenses in place for eyewear; bedding; stationery/drinkware; and outdoor furniture, accessories, and décor. We also have licensing agreements with NFL, Disney Consumer Products, Peanuts Worldwide, Sanrio Inc. (Hello Kitty), Crocs, Tupperware, Tervis (drinkware), NCAA (collegiate), and certain U.S. Military forces.
In addition to products developed in-house, we also pursue brand extensions through strategic partnerships, licensing agreements, and brand collaborations. We currently have licenses in place for eyewear; bedding; stationery/drinkware; and outdoor furniture, accessories, and décor. We also have licensing agreements with NFL, Disney Consumer Products, Peanuts Worldwide, NBC Universal, Warner Brothers, and NCAA (collegiate).
We also pursue brand extensions through licensing agreements and we have partnered with Discovery, Warner Brothers Consumer Products, Disney Consumer Products, Sanrio Inc. (Hello Kitty), and other companies that are consistent with our brand.
Pura Vida has pursued brand extensions through licensing agreements and partnerships with Discovery, Warner Brothers Consumer Products, Disney Consumer Products, and Sanrio Inc. (Hello Kitty).
When determining the size of orders placed with our manufacturers, we take into account forward-looking demand, lead times for specific products, current inventory levels, and minimum order quantity requirements. Overseas production has resulted in substantial cost savings and a reduction of capital investment. Distribution Centers Vera Bradley owns a 428,500 square-foot distribution center in Roanoke, Indiana.
When determining the size of orders placed with our manufacturers, Pura Vida has taken into account forward-looking demand, lead times for specific products, current inventory levels, and minimum order quantity requirements.
Our work is also informed in part by market data analysis provided through our membership in industry services and organizations. The design and product development teams work to ensure that we offer products that are constructed to meet our design, function, construction, and quality standards in a cost-effective manner.
The design and product development teams work to ensure that we offer products that are constructed to meet our design, function, construction, and quality standards in a cost-effective manner. We believe that, with our cross-functional, collaborative approach, we are able to introduce and market our products in a way that clearly communicates the Vera Bradley brand.
Conducting market analysis and supplier assessment to identify potential partners are integral to maintaining a competitive edge and driving profitability. The global sourcing team 11 Table of Contents collaborates with carefully selected and screened suppliers to negotiate contracts and agreements, balance cost, lead time, quality, and reliability across our supplier network and maximize operational efficiency.
The global sourcing team collaborates with carefully selected and screened suppliers to negotiate contracts and agreements, balance cost, lead time, quality, and reliability across our supplier network and maximize operational efficiency. Developing a long-term and mutually beneficial relations with suppliers and to foster collaboration and innovation is an important part of our sourcing matrix.
We actively mitigate raw materials price increases through purchasing at advantageous times and periods. All of our suppliers must comply with our quality standards, and we use only a limited number of pre-approved suppliers who have demonstrated a commitment to delivering the highest quality products.
All of our suppliers must comply with our quality standards, and we use only a limited number of pre-approved suppliers who have demonstrated a commitment to delivering the highest quality products. We are continually updating our factory audit process and building a better compliance program to ensure our vendor code of conduct is met.
Approximately half of Vera Bradley product sales are cotton-based. Our other fabrics include fleece, polyester, and microfiber. We source our raw materials from various suppliers in Asia, with the majority of non-cotton based products coming from China and South Korea.
Approximately 40% of Vera Bradley product sales are derived from cotton-based materials. Our remaining fabrics and materials including leather, fleece, polyester, nylon, and microfiber. We work with fabric mill partners across Asia and work with leather tannery partners in South Korea and Europe. Most of our non-cotton fabrics are sourced in China and South Korea.
Our full-line locations are allowing us to showcase the Pura Vida lifestyle with a full array of existing products and new product innovations.
Our full-line locations are allowing us to showcase the Pura Vida lifestyle with a full array of existing products and new product innovations. 10 Table of Contents Manufacturing and Supply Chain Model Vera Bradley Our multi-country manufacturing and supply chain model is designed to achieve efficient, timely, and accurate order fulfillment while maintaining appropriate levels of inventory.
We sell our remaining inventory of retired products primarily through our websites (including our online outlet site), outlet stores, our annual outlet sale, and third-party liquidators. Pura Vida . We introduce new Pura Vida products seasonally, approximately three times a year (spring, summer, and fall).
To keep our assortment current and fresh, and to focus our inventory investments on our best performers, we discontinue prints and fabrications as necessary. We sell our remaining inventory of retired products primarily through our websites (including our online outlet site), outlet stores, our annual outlet sale, and third-party liquidators. Pura Vida. New Pura Vida products are released monthly.
We are refocusing on core categories and items we are “best at,” such as travel and bags, by innovating and expanding within our core products. We are elevating our colorful feminine heritage, keeping it distinctive but more trend-right and modern through updated prints, colors, styles, and designs, which will appeal to both existing and new customers.
We are elevating our colorful feminine heritage, keeping it distinctive but more trend-right and modern through updated prints, colors, styles, and designs, which will appeal to both existing and new customers. We’ve improved the quality of most of our fabrics while keeping our commitment to increased use of preferred fibers, and our retail price structure is unchanged.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn light of the foregoing, if investors, analysts, and others fail to review our guidance within the proper context or place undue reliance on our guidance, deviations from such guidance may result in incongruous fluctuation in our stock price. 25 Table of Contents Anti-takeover provisions in our organizational documents and Indiana law may discourage or prevent a change in control, even if a sale of the Company would be beneficial to our shareholders, which could cause our stock price to decline and prevent attempts by shareholders to replace or remove our current management.
Biggest changeAnti-takeover provisions in our organizational documents and Indiana law may discourage or prevent a change in control, even if a sale of the Company would be beneficial to our shareholders, which could cause our stock price to decline and prevent attempts by shareholders to replace or remove our current management.
In the event of a downturn in the U.S. economy, or if there is a decline in consumer-spending levels or other unfavorable conditions, including inflationary pressure, we could experience lower than expected net revenues, which could force us to delay or slow the implementation of our growth strategies and adversely impact our results of operations.
In addition, in the event of a downturn in the U.S. economy, or if there is a decline in consumer-spending levels or other unfavorable conditions, including inflationary pressure, we could experience lower than expected net revenues, which could force us to delay or slow the implementation of our growth strategies and adversely impact our results of operations.
Our competitive challenges include: • attracting customer traffic; • sourcing and manufacturing merchandise efficiently; • competitively pricing our products and achieving customer perception of value; • maintaining favorable brand recognition and effectively marketing our products to consumers in diverse market segments; • developing designs that appeal to a broad range of demographic and age segments; • developing high-quality products; • offering attractive promotional incentives while maintaining profit margins; and • establishing and maintaining good working relationships with our wholesale retailers. 18 Table of Contents In our Vera Bradley Indirect business and Pura Vida wholesale business, we compete with numerous manufacturers, importers, and distributors of handbags, accessories, and other products for the limited space available for the display of such products to the consumer.
Our competitive challenges include: • attracting customer traffic; • sourcing and manufacturing merchandise efficiently; • competitively pricing our products and achieving customer perception of value; • maintaining favorable brand recognition and effectively marketing our products to consumers in diverse market segments; • developing designs that appeal to a broad range of demographic and age segments; • developing high-quality products; • offering attractive promotional incentives while maintaining profit margins; and • establishing and maintaining good working relationships with our wholesale retailers. 17 Table of Contents In our Vera Bradley Indirect business and Pura Vida wholesale business, we compete with numerous manufacturers, importers, and distributors of handbags, accessories, and other products for the limited space available for the display of such products to the consumer.
If our ESG-related data, processes, and reporting are incomplete or inaccurate, or if we fail to achieve progress with respect to these initiatives or goals on a timely basis, or at all, our reputation and the value of our brands could be adversely affected.
Furthermore, if our ESG-related data, processes, and reporting are incomplete or inaccurate, or if we fail to achieve progress with respect to these initiatives or goals on a timely basis, or at all, our reputation and the value of our brands could be adversely affected.
Fluctuations in the price, availability, and quality of fabrics or other raw materials used to manufacture our products, as well as the price for labor, marketing, and transportation, could have adverse impacts on our cost of sales and our ability to meet our customers’ demands.
Fluctuations in the price, availability, and quality of fabrics or other raw materials used to manufacture our products, as well as increases in the price for labor, marketing, and transportation, could have adverse impacts on our cost of sales and our ability to meet our customers’ demands.
In the event of shareholder activism, particularly with respect to matters which our Board of Directors (“Board”), in exercising their fiduciary duties, disagree with or have determined not to pursue, our business could be adversely affected because responding to actions by activist shareholders can be costly and time-consuming, disrupting our operations and diverting the attention of management, and perceived uncertainties as to our future direction may result in the loss of potential business opportunities and may make it more difficult to attract and retain qualified personnel, business partners, and customers.
In the event of shareholder activism, particularly with respect to matters which our Board, in exercising their fiduciary duties, disagree with or have determined not to pursue, our business could be adversely affected because responding to actions by activist shareholders can be costly and time-consuming, disrupting our operations and diverting the attention of management, and perceived uncertainties as to our future direction may result in the loss of potential business opportunities and may make it more difficult to attract and retain qualified personnel, business partners, and customers.
If we are unable to effectively address these risks and any other risks that we face in connection with our Internet operations, our business, financial condition, results of operations, and/or cash flows could be materially adversely affected. 22 Table of Contents Risks Related to Tax and Valuation Matters Fluctuations in our tax obligations and effective tax rate may result in volatility of our operating results and stock price.
If we are unable to effectively address these risks and any other risks that we face in connection with our Internet operations, our business, financial condition, results of operations, and/or cash flows could be materially adversely affected. 21 Table of Contents Risks Related to Tax and Valuation Matters Fluctuations in our tax obligations and effective tax rate may result in volatility of our operating results and stock price.
Violations of labor or other laws by those manufacturers, or the divergence of a contract manufacturer’s labor or other practices from those generally accepted as ethical in the United States or in other markets in 20 Table of Contents which we may in the future do business, could also draw negative publicity for us and our brands, diminishing the value of our brands and reducing demand for our products.
Violations of labor or other laws by those manufacturers, or the divergence of a contract manufacturer’s labor or other practices from those generally accepted as ethical in the United States or in other markets in 19 Table of Contents which we may in the future do business, could also draw negative publicity for us and our brands, diminishing the value of our brands and reducing demand for our products.
If products we sell have safety problems of which we are not aware, or if we or the Consumer Product Safety Commission recall a product sold in our stores, we may suffer negative publicity and, potentially, product liability lawsuits, which could have a material adverse impact on our reputation, financial condition and results of operations or cash flows. 27 Table of Contents Item 1B.
If products we sell have safety problems of which we are not aware, or if we or the Consumer Product Safety Commission recall a product sold in our stores, we may suffer negative publicity and, potentially, product liability lawsuits, which could have a material adverse impact on our reputation, financial condition and results of operations or cash flows. 26 Table of Contents Item 1B.
In such a case, we could have difficulty meeting consumer demand and net revenues could be adversely impacted. 19 Table of Contents We rely on a limited number of distribution facilities for the products we sell. Distribution operations for Vera Bradley-branded products are currently concentrated in a single, company-owned distribution center in Roanoke, Indiana.
In such a case, we could have difficulty meeting consumer demand and net revenues could be adversely impacted. 18 Table of Contents We rely on a limited number of distribution facilities for the products we sell. Distribution operations for Vera Bradley-branded products are currently concentrated in a single, company-owned distribution center in Roanoke, Indiana.
As a result of the above-mentioned factors, the Company’s liquidity, results of operations, and financial condition could be adversely impacted. 26 Table of Contents General Risk Factors Our results of operations could suffer if we lose key management or design associates or are unable to attract and retain the talent required for our business.
As a result of the above-mentioned factors, the Company’s liquidity, results of operations, and financial condition could be adversely impacted. 25 Table of Contents General Risk Factors Our results of operations could suffer if we lose key management or design associates or are unable to attract and retain the talent required for our business.
Upon any such closure, the closing costs, including fixed assets and inventory write-downs, could adversely affect our results of operations and our cash on hand. 17 Table of Contents Our ability to attract customers to our stores depends heavily on the success of the shopping centers in which many of our stores are located.
Upon any such closure, the closing costs, including fixed assets and inventory write-downs, could adversely affect our results of operations and our cash on hand. 16 Table of Contents Our ability to attract customers to our stores depends heavily on the success of the shopping centers in which many of our stores are located.
Any delay, interruption, or increased cost in the manufactured products that might occur for any reason, such as the lack of long-term contracts or regulatory requirements and the loss of certifications, power interruptions, fires, hurricanes, war, pandemics or other public health matters, or threats of terrorism, could affect our ability to meet customer demand for our products, adversely affect our net revenues, increase our cost of sales, and hurt our results of operations.
Any delay, interruption, or increased cost in the manufactured products that might occur for any reason, such as the lack of long-term contracts or regulatory requirements and the loss of certifications, power interruptions, fires, hurricanes, war, pandemics or other public health matters, tariff-related cost increases, or threats of terrorism, could affect our ability to meet customer demand for our products, adversely affect our net revenues, increase our cost of sales, and hurt our results of operations.
The market price of our common stock may fluctuate significantly in response to a number of factors, most of which we cannot control, including: • actions by other shopping mall or lifestyle center tenants; • weather conditions, particularly during the holiday shopping period; • unexpected departures of key executives; • financial projections that we may choose to provide to the public, any changes in these projections or our failure for any reason to meet these projections; • the public’s response to press releases or other public announcements by us or others, including our filings with the SEC and announcements relating to litigation and other matters; • speculation about our business in the press or the investment community; • future sales of our common stock by our significant shareholders, officers, and directors; • our entry into new markets; • the impact of wars, hostilities, riots, social unrest or acts of terrorism on trading markets; • changes in laws or regulations that impact the retail industry; • strategic actions by us or our competitors, such as acquisitions or restructurings; • the outbreak of pandemics or other public health matters and the resulting adverse impact on the capital markets; and • changes in accounting principles.
The market price of our common stock may fluctuate significantly in response to a number of factors, most of which we cannot control, including: • actions by other shopping mall or lifestyle center tenants; • weather conditions, particularly during the holiday shopping period; • unexpected departures of key executives; • financial projections that we may choose to provide to the public, any changes in these projections or our failure for any reason to meet these projections; • the public’s response to press releases or other public announcements by us or others, including our filings with the SEC and announcements relating to litigation and other matters; • speculation about our business in the press or the investment community; • future sales of our common stock by our significant shareholders, officers, and directors; • our entry into new markets; • the impact of wars, hostilities, riots, social unrest or acts of terrorism on trading markets; • changes in laws or regulations that impact the retail industry, including the imposition or increase in the rate of tariffs or trade sanctions; • strategic actions by us or our competitors, such as acquisitions or restructurings; • the outbreak of pandemics or other public health matters and the resulting adverse impact on the capital markets; and • changes in accounting principles.
Although we have not been inhibited from selling our products in connection with intellectual property disputes, intellectual property-related obstacles may arise as we expand our product lines and extend our 23 Table of Contents brands as well as the geographic scope of our sales and marketing.
Although we have not been inhibited from selling our products in connection with intellectual property disputes, intellectual property-related obstacles may arise as we expand our product lines and extend our 22 Table of Contents brands as well as the geographic scope of our sales and marketing.
We are exposed to business risks as a result of our e-commerce operations. We operate e-commerce stores at www.verabradley.com, outlet.verabradley.com, and international.verabradley.com, www.puravidabracelets.com, www.puravidabracelets.eu, and www.puravidabracelets.ca. Expanding our e-commerce business is one of the key objectives of our business strategy.
We are exposed to business risks as a result of our e-commerce operations. We operate e-commerce stores at www.verabradley.com, outlet.verabradley.com, and international.verabradley.com, and www.puravidabracelets.com. Expanding our e-commerce business is one of the key objectives of our business strategy.
We currently sell our Vera Bradley-branded products into two segments: Direct to consumers through Vera Bradley full-line and outlet stores in the United States, verabradley.com and international.verabradley.com, outlet.verabradley.com, and typically the Vera Bradley annual outlet sale in Fort Wayne, Indiana; and through our Vera Bradley Indirect wholesale business which consists of sales to specialty retail locations, department stores, national accounts, third-party e-commerce sites, third-party inventory liquidators, as well as royalties recognized through licensing agreements related to the Vera Bradley brand.
We currently sell our Vera Bradley-branded products into two segments: Direct to consumers through Vera Bradley full-line and outlet stores in the United States, the Vera Bradley websites (verabradley.com, international.verabradley.com, and outlet.verabradley.com), the Vera Bradley annual outlet sale in Fort Wayne, Indiana as well as direct to consumer marketplaces; and through our Vera Bradley Indirect wholesale business which consists of sales to specialty retail locations, department stores, national accounts, third-party e-commerce sites, third-party inventory liquidators, as well as royalties recognized through licensing agreements related to the Vera Bradley brand.
For example, our assessments during fiscal years 2023 and 2022 indicated that operating losses or insufficient operating income existed at certain retail stores, with a projection that the operating losses or insufficient operating income for those locations would continue.
For example, our assessments during fiscal years 2025 and 2023 indicated that operating losses or insufficient operating income existed at certain retail stores, with a projection that the operating losses or insufficient operating income for those locations would continue.
These factors may cause our comparable sales results to be lower in the future than in recent periods or lower than expectations, either of which could result in a decline in the price of our common stock. 16 Table of Contents If our multi-channel distribution model is not successful, our business and results of operations may suffer.
These factors may cause our comparable sales results to be lower in the future than in recent periods or lower than expectations, either of which could result in a decline in the price of our common stock. If our multi-channel distribution model is not successful, our business and results of operations may suffer.
Numerous factors influence comparable sales, including fashion trends, competition, national and regional economic conditions, pricing, inflation, the timing of the release of new merchandise and promotional events, changes in our merchandise mix, marketing programs, changes in consumer shopping trends, site selection strategies, public health matters, and weather conditions.
Numerous factors influence comparable sales, including fashion trends, competition, national and regional economic conditions, pricing, inflation, the timing of the release of new merchandise and promotional events, changes in our merchandise mix, marketing programs, changes in consumer shopping trends, site selection strategies, public health matters, and weather 15 Table of Contents conditions.
We also utilize an automated replenishment system to facilitate the processing of basic replenishment orders, the movement of goods through distribution channels, and the collection of information for planning and forecasting. In addition, we have e-commerce websites in the U.S., Europe, and Canada.
We also utilize an automated replenishment system to facilitate the processing of basic replenishment orders, the movement of goods through distribution channels, and the collection of information for planning and forecasting. In addition, we have U.S. and international e-commerce websites.
Actual results will vary from the guidance and the variations may be material. Investors should also recognize that the reliability of any forecasted financial data diminishes the further into the future that the data are forecast.
Actual results will vary from the guidance and the 24 Table of Contents variations may be material. Investors should also recognize that the reliability of any forecasted financial data diminishes the further into the future that the data are forecast.
Our performance is subject to general economic conditions and their impact on levels of consumer confidence and consumer spending.
Our performance is subject to general economic conditions and political uncertainty and their impact on levels of consumer confidence and consumer spending.
For Vera Bradley, we outsource the production of a significant majority of our products to companies in Asia. We source our Pura Vida components primarily from Asia and outsource the production of products primarily to El Salvador.
For Vera Bradley, we outsource the production of a significant majority of our products to companies in Asia. Pura Vida components are primarily sourced from Asia and outsource the production of products primarily to El Salvador.
As such, we recorded non-cash charges of $0.8 million and $0.1 million during fiscal years 2023 and 2022, respectively, within selling, general, and administrative expenses in the consolidated statements of operations to write down the carrying values of these stores' long-lived asset groups to their estimated fair values.
As such, we recorded non-cash charges of $2.6 million and $0.8 million during fiscal years 2025 and 2023, respectively, within selling, general, and administrative expenses in the consolidated statements of operations to write down the carrying values of these stores' long-lived asset groups to their estimated fair values.
If we are unable to successfully execute our brand strategies, our results of operations could be adversely impacted. Closing stores could result in significant costs to us. We have closed a total of 74 underperforming full-line stores a nd three unde rperforming outlet stores since the beginning of fiscal 2015 and forecast that we will close additional full-line stores.
If we are unable to successfully execute our brand strategies, our results of operations could be adversely impacted. Closing stores could result in significant costs to us. We have closed a total of 79 underperforming full-line stores and four underperforming outlet stores since the beginning of fiscal 2015 and forecast that we will close additional stores.
Consumer confidence and consumer spending may be influenced by levels of inflation, fluctuating interest rates and credit availability (including possible exposure to bank failures), changing fuel and other energy costs, fluctuating commodity prices, levels of unemployment and consumer debt levels, changes in net worth based on market conditions, general uncertainty regarding the overall future economic environment, political turmoil, pandemics or other public health matters, and weather and weather-related phenomena.
Consumer confidence and consumer spending may be influenced by levels of inflation, fluctuating interest rates and credit availability (including possible exposure to bank failures), changing fuel and other energy costs, fluctuating commodity prices, levels of unemployment and consumer debt levels, tariffs, trade barriers or other measures that create barriers to or increase the costs associated with international trade, changes in net worth based on market conditions, general uncertainty regarding the overall future economic environment, political turmoil and uncertainty, pandemics or other public health matters, and weather and weather-related phenomena.
We currently sell our Pura Vida-branded products direct to consumers through our e-commerce websites (puravidabracelets.com, puravidabracelets.eu, and puravidabracelets.ca), through wholesale retailers, and through our five retail stores. These channels are sometimes in direct competition and sales through these channels may not be incremental to total sales.
We currently sell Pura Vida-branded products direct to consumers through our e-commerce website (puravidabracelets.com), through wholesale retailers, and through our seven retail stores. These channels are sometimes in direct competition and sales through these channels may not be incremental to total sales.
As permitted by our second amended and restated articles of incorporation and amended and restated bylaws, our Board also has the ability, should it so determine, to adopt a shareholder rights agreement, sometimes called a “poison pill,” providing for the issuance of a new series of preferred stock to holders of common stock.
As permitted by our second amended and restated articles of incorporation and amended and restated bylaws, our Board has adopted a shareholder rights agreement, sometimes called a “poison pill,” providing for the issuance of a new series of preferred stock to holders of common stock.
In the past, stockholders have instituted securities class action litigation following periods of market volatility. If we were involved in 24 Table of Contents securities litigation, we could incur substantial costs and our resources and the attention of management could be diverted from our business. Our business could be negatively affected as a result of the actions of activist shareholders.
In the past, 23 Table of Contents stockholders have instituted securities class action litigation following periods of market volatility. If we were involved in securities litigation, we could incur substantial costs and our resources and the attention of management could be diverted from our business.
We have closed a total o f 74 underperforming full-line stores and three underperforming outlet stores since the beginning of fiscal 2015 and forecast that we will close additional full-line stores . We plan to open additional Vera Bradley full line and outlet stores during fiscal 2025.
We have closed a total of 79 underperforming full-line stores and four underperforming outlet stores since the beginning of fiscal 2015 and forecast that we will close additional full-line stores. We plan to open two additional Vera Bradley stores during fiscal 2026.
Trade restrictions, which include embargoes, safeguards, and customs restrictions, could increase the cost or reduce the supply of products available to us or could require us to modify our supply chain organization or other current business practices, any of which could harm our results of operations. We rely on independent transportation providers for substantially all of our product shipments.
Trade restrictions, which include embargoes, safeguards, and customs restrictions, could increase the cost or reduce the supply of products available to us or could require us to modify our supply chain organization or other current business practices, any of which could harm our results of operations.
In the event of a takeover attempt, this preferred stock would give rights to holders of common stock (other than the potential acquirer) to buy additional shares of our common stock at a discount, leading to the dilution of the potential acquirer’s stake.
In the event of a takeover attempt, this preferred stock would give rights to holders of common stock (other than the potential acquirer) to buy additional shares of our common stock at a discount, leading to the dilution of the potential acquirer’s stake. The adoption of a poison pill, can have negative effects such as those described above.
Michael Miller, directly or indirectly, beneficially own and have the ability to exercise voting control over, in the aggregat e, 19.0% of our outstan ding shares of common stock as of February 3, 2024.
Michael Miller, directly or indirectly, beneficially own and have the ability to exercise voting control over, in the aggregate, 21.2% of our outstan ding shares of common stock as of February 1, 2025.
It is possible that these provisions could make it more difficult to accomplish transactions that shareholders might deem to be in their best interest.
These provisions also may have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions that shareholders might deem to be in their best interest.
We could also be subject to scrutiny with respect to the scope or nature of our ESG-related initiatives or goals, or for any revisions to those goals.
We could also be subject to scrutiny with respect to the scope or nature of our ESG-related initiatives or goals, or for any revisions to those goals. Some stakeholders and customers may react negatively to the Company’s disclosure of ESG compliance efforts.
If individuals are elected to our Board with a differing agenda, our ability to effectively and timely implement our strategic plans and create additional value for our shareholders may be adversely affected.
If individuals are elected to our Board with a differing agenda, our ability to effectively and timely implement our strategic plans and create additional value for our shareholders may be adversely affected. Our actual operating results may differ significantly from our guidance, which could cause incongruous fluctuation in our stock price.
If we are unsuccessful in implementing some or all of our strategies or initiatives, our future operating results could be adversely impacted. Changes in general economic conditions, and their impact on consumer confidence and consumer spending, could adversely impact our results of operations.
If we are unsuccessful in implementing some or all of our strategies or initiatives, our future operating results could be adversely impacted.
The United States and the countries in which our products are produced have imposed and may impose additional quotas, duties, tariffs, or other restrictions or regulations or may adversely adjust prevailing quotas, duties, or tariffs.
A significant majority of our Vera Bradley and Pura Vida products are currently manufactured for us in Asia and Central America, respectively. The United States and the countries in which our products are produced have imposed and may impose additional quotas, duties, tariffs, or other restrictions or regulations or may adversely adjust prevailing quotas, duties, or tariffs.
Our ability to source our products at favorable prices, or at all, could be harmed, with adverse effects on our results of operations, if new trade restrictions are imposed or if existing trade restrictions become more burdensome. A significant majority of our Vera Bradley and Pura Vida products are currently manufactured for us in Asia and Central America, respectively.
Our ability to source our products at favorable prices, or at all, could be harmed, with adverse effects on our results of operations, if new trade restrictions are imposed,, existing trade restrictions become more burdensome, or increased tariffs are implemented.
In addition, this significant concentration of stock ownership may adversely affect the trading price of our common stock should investors perceive disadvantages in owning shares of common stock in a company that has such concentrated ownership. Our actual operating results may differ significantly from our guidance, which could cause incongruous fluctuation in our stock price.
In addition, this significant concentration of stock ownership may adversely affect the trading price of our common stock should investors perceive disadvantages in owning shares of common stock in a company that has such concentrated ownership. Our business could be negatively affected as a result of the actions of activist shareholders.
If we experience significant delays in our receipt of product, we may experience an increase in freight costs, unanticipated inventory shortages, and missed sales opportunities which could adversely affect our financial condition, results of operations, and cash flows.
If we experience significant delays in our receipt of product, we may experience an increase in freight costs, unanticipated inventory shortages, and missed sales opportunities which could adversely affect our financial condition, results of operations, and cash flows. 20 Table of Contents Risks Related to Information Technology and Security A data security or privacy breach could damage our reputation and our relationships with our customers, expose us to litigation risk and adversely affect our business.
Under specified circumstances, certain provisions of the IBCL related to control share acquisitions, business combinations, and constituent interests may delay, prevent, or make more difficult unsolicited acquisitions or changes of control of us. These provisions also may have the effect of preventing changes in our management.
As an Indiana corporation, we are governed by the Indiana Business Corporation Law (as amended from time to time, the “IBCL”). Under specified circumstances, certain provisions of the IBCL related to control share acquisitions, business combinations, and constituent interests may delay, prevent, or make more difficult unsolicited acquisitions or changes of control of us.
We may not be able to regain the levels of comparable sales that we have experienced in the past, and comparable sales may also further deteriorate. If our future comparable sales fail to meet market expectations, then the price of our common stock could decline.
If our future comparable sales fail to meet market expectations, then the price of our common stock could decline. Also, the aggregate results of operations of our stores have fluctuated in the past and will fluctuate in the future.
Consumer purchases of discretionary items, including our merchandise, generally decline during periods when disposable income is adversely affected or there is economic uncertainty, and these occurrences could adversely impact our results of operations.
Consumer purchases of discretionary items, including our merchandise, generally decline during periods when disposable income is adversely affected or there is economic or political uncertainty. This includes rising geopolitical tensions and U.S. policies related to global trade and tariffs.
Over the last few years, proxy contests and other forms of shareholder activism have been directed against numerous public companies in retail businesses. We could become engaged in a consent solicitation, or proxy contest, or experience other shareholder activism, in the future. Activist shareholders may advocate for certain governance and strategic changes at our company.
For example, on December 30, 2024, Fund 1 Investments, LLC delivered a letter to our Board calling for a the commencement of a strategic alternatives process. In the future, we could become engaged in a consent solicitation, or proxy contest, or experience other shareholder activism. Activist shareholders may advocate for certain governance and strategic changes at our company.
Merchandise misjudgments could adversely impact our net revenues and results of operations. We may experience declines in comparable sales and strategic initiatives we are implementing to improve our results, such as Project Restoration, may not be successful.
Merchandise misjudgments could adversely impact our net revenues and results of operations. We may experience declines in comparable sales which could negatively affect the price of our common stock. We may not be able to regain the levels of comparable sales that we have experienced in the past, and comparable sales may also further deteriorate.
We currently rely on independent transportation service providers for substantially all of our product shipments.
As a result, we may suffer margin erosion or be required to raise our prices, which may result in the loss of customers and negatively impact our results of operations. We rely on independent transportation providers for substantially all of our product shipments. We currently rely on independent transportation service providers for substantially all of our product shipments.
Removed
Also, the aggregate results of operations of our stores have fluctuated in the past and will fluctuate in the future.
Added
Changes in general economic conditions and political uncertainty, including policies related to global trade and tariffs, and their impact on consumer confidence and consumer spending, could negatively impact our profitability and net revenues, which could force us to delay or slow the implementation of our growth strategies and adversely impact our results of operations.
Removed
Risks Related to Pura Vida We have taken material impairment charges related to goodwill and other indefinite-lived intangible assets associated with the Pura Vida acquisition in the past and may be required to take additional impairment charges in the future , which may adversely affect the company’s financial condition and results of operations.
Added
The deterioration of economic relations between countries, such as changes in or terminations of existing trade agreements, or the imposition of tariffs (including recent U.S. tariffs imposed or threatened to be imposed on Canada, Mexico, China, and other countries, and any retaliatory actions taken by such countries) or otherwise, could impact our profitability or otherwise have an adverse effect on our business.
Removed
We used the purchase method of accounting to account for the acquisition of a majority interest in Pura Vida, which was consummated on July 16, 2019. A portion of the purchase price for this business is allocated to identifiable tangible and intangible assets and assumed liabilities based on estimated fair values at the date of acquisition.
Added
In addition, the current U.S. presidential administration has implemented tariffs and has signaled that it may implement additional or increased tariffs, other trade restrictions, or may alter trade agreements between the U.S. and Canada, China, the European Union and Mexico, among others. Such actions include limiting trade and/or imposing tariffs on imports from such countries.
Removed
Goodwill is measured indirectly as the excess of the sum of (i) the consideration transferred (including contingent consideration, if any) and (ii) the fair value of any noncontrolling interest in the acquiree over the net assets acquired and liabilities assumed.
Added
Tariffs have the potential to significantly raise the cost of our merchandise. In such a case, there can be no assurance that we will be able to shift manufacturing and supply agreements to non-impacted countries to reduce the effects of tariffs.
Removed
The purchase price allocation resulted in a goodwill value of $44.3 million and a value of $61.7 million related to other intangible assets. During fiscal 2024, we recorded an impairment to the Pura Vida brand indefinite-lived intangible asset of $5.4 million.
Added
The rapid evolution and increased adoption of artificial intelligence technologies by attackers may intensify our cybersecurity risks.
Removed
The carrying value of all Pura Vida intangible assets, including the Pura Vida brand intangible asset, was $7.6 million as of February 3, 2024.
Added
Fund 1 Investments, LLC beneficially owns and has the ability to exercise voting control over, in the aggregate, 10% of our outstanding shares of common stock as of February 1, 2025.
Removed
During fiscal 2023, we recorded a full impairment of goodwill totaling $44.3 million and an impairment charge for the Pura Vida brand intangible asset of $25.0 million. 21 Table of Contents When the Company performs future impairment tests, it is possible that the carrying value of the remaining intangible assets could exceed their implied fair value and therefore would require adjustment.
Added
We have been subject to shareholder activism and may be subject to such activism in the future, which could result in substantial costs and divert management’s and our Board of Directors’ (“Board”) attention and resources from our business.
Removed
Such adjustment would result in a charge to operating income in that period. Once adjusted, there can be no assurance that there will not be further adjustments for impairment in future periods.
Added
In light of the foregoing, if investors, analysts, and others fail to review our guidance within the proper context or place undue reliance on our guidance, deviations from such guidance may result in incongruous fluctuation in our stock price.
Removed
Risks Related to Information Technology and Security A data security or privacy breach could damage our reputation and our relationships with our customers, expose us to litigation risk and adversely affect our business.
Removed
The adoption of a poison pill, or the Board’s ability to do so, can have negative effects such as those described above. As an Indiana corporation, we are governed by the Indiana Business Corporation Law (as amended from time to time, the “IBCL”).

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe also conduct phishing exercises and correlated education with our employees. Governance Related to Cybersecurity Risks Our Vice President of Enterprise Technology Solutions is responsible for the strategic leadership and direction of the Company's information technology organization and possesses 25 years of tenure and experience with the Company in matters of privacy assurance, cyber, digital, and data security.
Biggest changeWe also conduct phishing exercises and correlated education with our employees. Governance Related to Cybersecurity Risks Our Vice President of Enterprise Technology Solutions is responsible for the strategic leadership and direction of the Company's information technology organization and possesses over 25 years of tenure and experience with the Company in matters of privacy assurance, cyber, digital, and data security.
The Audit Committee receives regular reporting from our Vice President of Enterprise Technology Solutions on our technology and cyber risk profile, enterprise cybersecurity program and key enterprise cybersecurity activities. We experienced no material cybersecurity incidents in fiscal 2024.
The Audit Committee receives regular reporting from our Vice President of Enterprise Technology Solutions on our technology and cyber risk profile, enterprise cybersecurity program and key enterprise cybersecurity activities. We experienced no material cybersecurity incidents in fiscal 2025.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of February 3, 2024, Pura Vida had five retail store locations. Of th e five lo cations, three were in California, one was in South Carolina, and one was in Arizona. We lease all of our stores. Lease terms for our retail s tores are generally ten y ears with options to renew for varying terms.
Biggest changeAs of February 1, 2025, Pura Vida had seven retail store locations. Of th e seven lo cations, three are in California, two are in Florida, one is in South Carolina, and one is in Arizona. We lease all of our stores.
The Vera Bradley properties in the above table are used by 28 Table of Contents both the Vera Bradley Direct segment and Vera Bradley Indirect segment, excluding the two standalone showrooms which are used exclusively by the Vera Bradley Indirect segment. The Pura Vida headquarters is used by the Pura Vida segment. Store Locations Vera Bradley .
The Vera Bradley properties in the above table are used by 27 Table of Contents both the Vera Bradley Direct segment and Vera Bradley Indirect segment, excluding the two standalone showrooms which are used exclusively by the Vera Bradley Indirect segment. The Pura Vida headquarters is used by the Pura Vida segment. Store Locations Vera Bradley .
Location Primary Use Approximate Square Footage Leased/Owned Roanoke, Indiana Vera Bradley corporate headquarters, design center, and showroom 188,000 Owned Roanoke, Indiana Vera Bradley warehouse and distribution 428,500 Owned New York, New York Vera Bradley office and showroom 3,700 Leased Hong Kong Vera Bradley Asia sourcing office 5,100 Leased Atlanta, Georgia Vera Bradley showroom 5,600 Leased Dallas, Texas Vera Bradley showroom 1,800 Leased La Jolla, California Pura Vida corporate headquarters 7,400 Leased As of February 3, 2024, we also leased 126 Vera Bradley store locations, including a former location, and five Pura Vida store locations in the United States.
Location Primary Use Approximate Square Footage Leased/Owned Roanoke, Indiana Vera Bradley corporate headquarters, design center, and showroom 188,000 Owned Roanoke, Indiana Vera Bradley warehouse and distribution 428,500 Owned New York, New York Vera Bradley office and showroom 3,700 Leased Hong Kong Vera Bradley Asia sourcing office 5,100 Leased Atlanta, Georgia Vera Bradley showroom 5,600 Leased Dallas, Texas Vera Bradley showroom 1,800 Leased La Jolla, California Pura Vida corporate headquarters 7,400 Leased As of February 1, 2025, we also leased 127 Vera Bradley store locations, including a former location, and seven Pura Vida store locations in the United States.
See below for more information regarding the locations of our open stores as of February 3, 2024. We consider these properties to be in good condition generally and believe that our facilities are adequate for our operations and provide sufficient capacity to meet our anticipated requirements.
See below for more information regarding the locations of our open stores as of February 1, 2025. We consider these properties to be in good condition generally and believe that our facilities are adequate for our operations and provide sufficient capacity to meet our anticipated requirements.
The following table shows the number of Vera Bradley full-line and outlet stores we operated in each state as of February 3, 2024: State Total Number of Vera Bradley Full-Line Stores Total Number of Vera Bradley Outlet Stores State Total Number of Vera Bradley Full-Line Stores Total Number of Vera Bradley Outlet Stores Alabama 1 1 Minnesota 1 1 Arizona — 1 Mississippi — 2 Colorado 1 1 Missouri — 2 Connecticut 1 1 Nebraska — 1 Delaware 1 1 Nevada — 1 Florida 2 9 New Hampshire — 1 Georgia 1 4 New Jersey 2 3 Hawaii 1 1 New York 3 5 Illinois 3 2 North Carolina — 6 Indiana 2 2 Ohio 2 2 Iowa 1 1 Oklahoma — 1 Kansas 1 1 Pennsylvania 3 6 Kentucky 1 1 South Carolina — 4 Louisiana 1 1 Tennessee 1 3 Maryland 2 1 Texas 7 7 Massachusetts — 1 Virginia 1 3 Michigan 3 2 Wisconsin 1 2 Totals 43 81 Pura Vida.
The following table shows the number of Vera Bradley full-line and outlet stores we operated in each state as of February 1, 2025: State Total Number of Vera Bradley Full-Line Stores Total Number of Vera Bradley Outlet Stores State Total Number of Vera Bradley Full-Line Stores Total Number of Vera Bradley Outlet Stores Alabama 1 1 Minnesota 1 1 Arizona 0 1 Mississippi 0 2 Colorado 1 1 Missouri 0 2 Connecticut 1 1 Nebraska 0 1 Delaware 1 1 Nevada 0 1 Florida 2 8 New Hampshire 0 2 Georgia 1 4 New Jersey 2 3 Hawaii 1 1 New York 3 5 Illinois 3 2 North Carolina 0 6 Indiana 2 2 Ohio 1 3 Iowa 1 1 Oklahoma 0 2 Kansas 1 1 Pennsylvania 3 6 Kentucky 1 1 South Carolina 0 4 Louisiana 1 1 Tennessee 1 3 Maryland 1 2 Texas 4 10 Massachusetts 1 1 Virginia 1 3 Michigan 3 2 Wisconsin 1 2 Totals 39 87 Pura Vida.
Item 2. Properties The following table sets forth the location, use, and size of our distribution, corporate facilities, and showrooms as of February 3, 2024. The leases on the leased properties expire at various times through 2033, subject to renewal options.
Item 2. Properties The following table sets forth the location, use, and size of our distribution, corporate facilities, and showrooms as of February 1, 2025. The leases on the leased properties expire at various times through 2035, subject to renewal options.
The leases generally provide for a fixed minimum rental plus contingent rent, which is determined as a percentage of sales in excess of specified levels.
Lease terms for our retail s tores are generally ten y ears with options to renew for varying terms. The leases generally provide for a fixed minimum rental plus contingent rent, which is determined as a percentage of sales in excess of specified levels.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+1 added−5 removed2 unchanged
Biggest changeThe 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 4. Mine Safety Disclosure Not Applicable 30 Table of Contents PART II
Biggest changeDefendants sometimes raise as affirmative defenses, or as counterclaims, the purported invalidity or unenforceability of our proprietary rights. 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 4.
Removed
Defendants sometimes raise as affirmative defenses, or as counterclaims, the purported invalidity or unenforceability of our proprietary rights. In August of 2019, Vesi Incorporated (“Vesi”) filed suit against the Company in the U.S.
Added
Mine Safety Disclosure Not Applicable 28 Table of Contents PART II
Removed
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 seeks damages in an amount not less than $10.0 million for punitive damages, attorney fees, prejudgment interest, and any other additional relief.
Removed
The Company has denied any liability and intends to vigorously defend itself in the case. In November 2019, the Company filed a counterclaim against the principals of Vesi as personal guarantors for monies owed to the Company by Vesi.
Removed
The Company filed a motion for summary judgement asking the Court to dismiss all claims with prejudice and grant judgment 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 appealed this decision.
Removed
On November 9, 2023 the United States Court of Appeals for the Sixth Circuit issued an opinion 29 Table of Contents affirming the District Court’s judgment in favor of the Company dismissing Vesi’s claims and granting the Company’s counterclaims.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosure 30 PART II. 31 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 33 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 45 Item 8. Financial Statements and Supplementary Data 46
Biggest changeItem 4. Mine Safety Disclosure 28 PART II. 29 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 29 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 31 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 41 Item 8. Financial Statements and Supplementary Data 42

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDetails regarding the activity under the 2021 Share Repurchase Program during the fourteen weeks ended February 3, 2024 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 Programs October 29, 2023 - November 25, 2023 11,427 $ 7.38 11,427 $ 25,745,349 November 26, 2023 - December 30, 2023 14,300 7.40 14,300 25,639,477 December 31, 2023 - February 3, 2024 13,700 7.39 13,700 25,538,298 39,427 $ 7.39 39,427 Dividends Our common stock began trading on October 21, 2010, following our initial public offering.
Biggest changeDetails regarding the activity under the 2021 Share Repurchase Program during the thirteen weeks ended February 1, 2025 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 Programs November 3, 2024 - November 30, 2024 69,082 $ 5.30 69,082 $ 3,993,007 December 1, 2024 - January 4, 2025 44,332 4.94 44,332 3,774,179 January 5, 2025 - February 1, 2025 — — — 3,774,179 113,414 $ 5.16 113,414 Dividends Our common stock began trading on October 21, 2010, following our initial public offering.
This graph assumes an initial investment of $100 on February 2, 2019, in our common stock, the S&P 500 Index, and the S&P 500 Apparel, Accessories, and Luxury Goods Index and assumes the reinvestment of dividends, if any. The comparisons shown in the graph below are based on historical data.
This graph assumes an initial investment of $100 on February 1, 2020, in our common stock, the S&P 500 Index, and the S&P 500 Apparel, Accessories, and Luxury Goods Index and assumes the reinvestment of dividends, if any. The comparisons shown in the graph below are based on historical data.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on the NASDAQ Global Select M arket under the symbol “VRA”. As of March 29, 2024, we had ap proximately 27 registered sh areholders of record.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on the NASDAQ Global Select M arket under the symbol “VRA”. As of March 28, 2025, we had ap proximately 26 registered sh areholders of record.
The payment of dividends is evaluated on a periodic basis. 31 Table of Contents Stock Performance Graph The graph set forth below com pares the cumulative shareholder return on our common stock between February 2, 2019, and February 3, 2024, to the cumulative return of (i) the S&P 500 Index and (ii) the S&P 500 Apparel, Accessories, and Luxury Goods Index over the same period.
The payment of dividends is evaluated on a periodic basis. 29 Table of Contents Stock Performance Graph The graph set forth below com pares the cumulative shareholder return on our common stock between February 1, 2020, and February 1, 2025, to the cumulative return of (i) the S&P 500 Index and (ii) the S&P 500 Apparel, Accessories, and Luxury Goods Index over the same period.
Unregistered Sales of Equity Securities and Use of Proceeds The following table details activity under the 2021 Share Repurchase Program during the fourteen weeks ended February 3, 2024.
Unregistered Sales of Equity Securities and Use of Proceeds The following table details activity under the 2021 Share Repurchase Program during the thirteen weeks ended February 1, 2025. The 2021 Share Repurchase Program expired in December 2024.
Company/Market/Peer Group 2/2/2019 2/1/2020 1/30/2021 1/29/2022 1/28/2023 2/3/2024 Vera Bradley, Inc. $ 100.00 $ 108.13 $ 95.37 $ 89.28 $ 62.63 $ 88.47 S&P 500 Index $ 100.00 $ 121.56 $ 142.53 $ 172.46 $ 161.03 $ 199.42 S&P 500 Apparel, Accessories, and Luxury Goods Index $ 100.00 $ 92.13 $ 90.11 $ 88.75 $ 64.72 $ 52.88 32 Table of Contents
Company/Market/Peer Group 2/1/2020 1/30/2021 1/29/2022 1/28/2023 2/3/2024 2/1/2025 Vera Bradley, Inc. $ 100.00 $ 88.20 $ 82.57 $ 57.93 $ 81.82 $ 39.02 S&P 500 Index $ 100.00 $ 117.25 $ 141.87 $ 132.47 $ 164.06 $ 202.59 S&P 500 Apparel, Accessories, and Luxury Goods Index $ 100.00 $ 97.80 $ 96.33 $ 70.25 $ 57.39 $ 62.76 30 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

67 edited+9 added−30 removed37 unchanged
Biggest changeFiscal Year Ended (1) ($ in thousands) February 3, 2024 January 28, 2023 January 29, 2022 Statement of Income (Loss) Data: Net revenues $ 470,786 $ 499,961 $ 540,453 Cost of sales 214,373 261,017 252,510 Gross profit 256,413 238,944 287,943 Selling, general, and administrative expenses (2) 241,457 265,016 261,993 Impairment of goodwill and intangible assets 5,429 69,256 — Other income, net 915 457 961 Operating income (loss) 10,442 (94,871) 26,911 Interest income (expense), net 890 (153) (263) Income (loss) before income taxes 11,332 (95,024) 26,648 Income tax expense (benefit) 3,494 (15,640) 6,430 Net income (loss) 7,838 (79,384) 20,218 Less: Net (loss) income attributable to redeemable noncontrolling interest — (19,649) 2,380 Net income (loss) attributable to Vera Bradley, Inc. $ 7,838 $ (59,735) $ 17,838 Percentage of Net Revenues: Net revenues 100.0 % 100.0 % 100.0 % Cost of sales 45.5 % 52.2 % 46.7 % Gross profit 54.5 % 47.8 % 53.3 % Selling, general, and administrative expenses 51.3 % 53.0 % 48.5 % Impairment of goodwill and intangible assets 1.2 % 13.9 % — % Other income, net 0.2 % 0.1 % 0.2 % Operating income (loss) 2.2 % (19.0) % 5.0 % Interest income (expense), net 0.2 % — % — % Income (loss) before income taxes 2.4 % (19.0) % 4.9 % Income tax expense (benefit) 0.7 % (3.1) % 1.2 % Net income (loss) 1.7 % (15.9) % 3.7 % Less: Net (loss) income attributable to redeemable noncontrolling interest — % (3.9) % 0.4 % Net income (loss) attributable to Vera Bradley, Inc. 1.7 % (11.9) % 3.3 % 37 Table of Contents The following tables present net revenues by operating segment, both in dollars and as a percentage of our net revenues, and Vera Bradley full-line and outlet store data for the last three fiscal years: Fiscal Year Ended (1) ($ in thousands, except as otherwise indicated) February 3, 2024 January 28, 2023 January 29, 2022 Net Revenues by Segment: VB Direct $ 309,910 $ 328,231 $ 354,875 VB Indirect 73,803 73,316 66,001 Pura Vida 87,073 98,414 119,577 Total $ 470,786 $ 499,961 $ 540,453 Percentage of Net Revenues by Segment: VB Direct 65.8 % 65.6 % 65.7 % VB Indirect 15.7 % 14.7 % 12.2 % Pura Vida 18.5 % 19.7 % 22.1 % Total 100.0 % 100.0 % 100.0 % Fiscal Year Ended February 3, 2024 January 28, 2023 January 29, 2022 Vera Bradley Store Data (3) : Total stores opened during period 3 5 6 Total stores closed during period (9) (20) (5) Total stores open at end of period 124 130 145 Comparable sales (including e-commerce) decrease (4) (7.1) % (9.5) % NM Total gross square footage at end of period 375,198 381,664 397,037 Average net revenues per gross square foot (5) $ 518 $ 555 $ 633 (1) The Company utilizes a 52-53 week fiscal year ending on the Saturday closest to January 31.
Biggest change(16.7) % 1.7 % (11.9) % 34 Table of Contents The following tables present net revenues by operating segment, both in dollars and as a percentage of our net revenues, and Vera Bradley full-line and outlet store data for the last three fiscal years: Fiscal Year Ended (1) ($ in thousands, except as otherwise indicated) February 1, 2025 February 3, 2024 January 28, 2023 Net Revenues by Segment: VB Direct $ 257,609 $ 309,910 $ 328,231 VB Indirect 61,186 73,803 73,316 Pura Vida 53,172 87,073 98,414 Total $ 371,967 $ 470,786 $ 499,961 Percentage of Net Revenues by Segment: VB Direct 69.3 % 65.8 % 65.6 % VB Indirect 16.4 % 15.7 % 14.7 % Pura Vida 14.3 % 18.5 % 19.7 % Total 100.0 % 100.0 % 100.0 % Fiscal Year Ended February 1, 2025 February 3, 2024 January 28, 2023 Vera Bradley Store Data (3) : Total stores opened during period 8 3 5 Total stores closed during period (6) (9) (20) Total stores open at end of period 126 124 130 Comparable sales (including e-commerce) decrease (4) (16.6) % (7.1) % (9.5) % Total gross square footage at end of period 387,510 375,198 381,664 Average net revenues per gross square foot (5) $ 403 $ 518 $ 555 (1) The Company utilizes a 52-53 week fiscal year ending on the Saturday closest to January 31.
Ongoing macroeconomic pressures could have a material adverse effect on our liquidity, operating results, and financial condition. 36 Table of Contents Results of Operations The following tables summarize key components of our consolidated results of operations for the last three fiscal years, both in dollars and as a percentage of our net revenues.
Ongoing macroeconomic pressures could have a material adverse effect on our liquidity, operating results, and financial condition. 33 Table of Contents Results of Operations The following tables summarize key components of our consolidated results of operations for the last three fiscal years, both in dollars and as a percentage of our net revenues.
Fiscal year 2024 consisted of 53 weeks. Fiscal years 2023 and 2022 consisted of 52 weeks. The extra week in fiscal 2024 contributed approximately $6.0 million in net revenues and added an estimated $0.01 to diluted net income per share in fiscal 2024.
Fiscal years 2025 and 2023 consisted of 52 weeks. Fiscal year 2024 consisted of 53 weeks. The extra week in fiscal 2024 contributed approximately $6.0 million in net revenues and added an estimated $0.01 to diluted net income per share in fiscal 2024.
Gross profit can be impacted by changes in volume; fluctuations in sales price; 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.
Gross profit can be impacted by changes in volume; fluctuations in sales price; operational efficiencies, such as leveraging of fixed costs; promotional activities, including free shipping; commodity prices, such as for cotton; tariffs; and labor costs. 32 Table of Contents Selling, General, and Administrative Expenses (“SG&A”) SG&A expenses include selling; advertising, marketing, and product development; and administrative expenses.
In addition, in fiscal 2023 and 2024, we implemented targeted cost reductions 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 in future years for additional cost reduction opportunities.
In addition, in fiscal 2023 through fiscal 2025, we implemented targeted cost reductions 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 in future years for additional cost reduction opportunities.
Revenues for the VB Direct segment reflect sales through Vera Bradley full-line and outlet stores and the Vera Bradley websites (verabradley.com, international.verabradley.com, and outlet.verabradley.com). There were no sales from our Vera Bradley annual outlet sale in Fort Wayne, Indiana for fiscal years 2022 and 2023 as it was cancelled due to the COVID-19 pandemic.
Revenues for the VB Direct segment reflect sales through Vera Bradley full-line and outlet stores and the Vera Bradley websites (verabradley.com, international.verabradley.com, and outlet.verabradley.com). There were no sales from our Vera Bradley annual outlet sale in Fort Wayne, Indiana for fiscal year 2023 as it was cancelled due to the COVID-19 pandemic.
The Company performed a quantitative analysis of the Pura Vida brand for the annual impairment test in the second quarter of fiscal 2024, at which time no impairment was recorded.
The Company performed a quantitative analysis of the Pura Vida brand for the annual impairment test in the second quarter of fiscal 2025, at which time no impairment was recorded.
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.
How We Assess the Performance of Our Business 31 Table of Contents 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.
Material Cash Requirements Our material cash requirements from known contractual and other obligations include the following: • Operating lease obligations as disclosed further in Note 4 to the Notes to the Consolidated Financial Statements in Part II, Item 8 of this report; • Purchase order commitments primarily related to inventory purchases; • Salaries, cash incentives, benefits, and other employee-related costs; • Commitments for capital expenditures; • Income tax payments; and • Other supply and service agreements entered into as part of our normal operations.
Financial Statements and Supplementary Data,” of this report. 38 Table of Contents Material Cash Requirements Our material cash requirements from known contractual and other obligations include the following: • Operating lease obligations as disclosed further in Note 4 to the Notes to the Consolidated Financial Statements in Part II, Item 8 of this report; • Purchase order commitments primarily related to inventory purchases; • Salaries, cash incentives, benefits, and other employee-related costs; • Commitments for capital expenditures; • Income tax payments; and • Other supply and service agreements entered into as part of our normal 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 under the Credit Agreement as of February 3, 2024.
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 under the Credit Agreement as of February 1, 2025.
The Credit Agreement also contains an option for VBD to arrange with lenders to increase the aggregate principal amount by up to $50.0 million. For further information regarding the Credit Agreement, please see Note 6 of the Notes to Consolidated Financial Statements set forth in Part II, “Item 8. Financial Statements and Supplementary Data,” of this report.
The Credit Agreement also contains an option for VBD to arrange with lenders to increase the aggregate principal amount by up to $50.0 million. For further information regarding the Credit Agreement, please see Note 6 of the Notes to Consolidated Financial Statements set forth in Part II, “Item 8.
By segment, the extra week contributed net revenues of approximately $2.8 million to Direct, $2.1 million to Indirect, and $1.1 million to Pura Vida in fiscal 2024. (2) Impairment charges, related primarily to underperforming stores, tot aled $1.4 million, and $0.1 million duri ng the fiscal years ended January 28, 2023, and January 29, 2022, respectively.
By segment, the extra week contributed net revenues of approximately $2.8 million to Direct, $2.1 million to Indirect, and $1.1 million to Pura Vida in fiscal 2024. (2) Impairment charges, related primarily to underperforming stores, tot aled $2.6 million , and $1.4 million duri ng the fiscal years ended February 1, 2025, and January 28, 2023, respectively.
Fiscal 2023 Compared to Fiscal 2022 Refer to the Company's Annual Report on Form 10-K filed wit h the SEC on March 28, 2023, for a comparison of fiscal 2023 to fiscal 2022 operating results. Liquidity and Capital Resources General Our primary sources of liquidity are cash and cash equivalents and cash flow from operations.
Fiscal 2024 Compared to Fiscal 2023 Refer to the Company's Annual Report on Form 10-K filed wit h the SEC o n March 29, 2024, for a comparison of fiscal 2024 to fiscal 2023 operating results. Liquidity and Capital Resources General Our primary sources of liquidity are cash and cash equivalents and cash flow from operations.
Impairment charges are classified in SG&A expenses and were $1.4 million, and $0.1 million for the periods ended January 28, 2023, and January 29, 2022, respectively. No impairment charges were recorded in fiscal 2024. The discounted cash flow models used to estimate the applicable fair values involve numerous estimates and assumptions that are highly subjective.
Impairment charges are classified in SG&A expenses and were $2.6 million, and $1.4 million for the periods ended February 1, 2025, and January 28, 2023, respectively. No impairment charges were recorded in fiscal 2024. The discounted cash flow models used to estimate the applicable fair values involve numerous estimates and assumptions that are highly subjective.
Revenues for the Pura Vida segment reflect revenues generated through the Pura Vida websites (www.puravidabracelets.com, www.puravidabracelets.eu, and www.puravidabracelets.ca), through the distribution of Pura Vida-branded products to wholesale retailers, and through Pura Vida retail stores.
Revenues for the Pura Vida segment reflect revenues generated through the Pura Vida website (www.puravidabracelets.com ), through the distribution of Pura Vida-branded products to wholesale retailers, and through Pura Vida retail stores.
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; • The timing of holidays; • Changes in our product mix; • Pricing 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. 34 Table of Contents Gross Profit Gross profit is equal to our net revenues less our cost of sales.
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; • The timing of holidays; • Changes in our product mix; • Pricing 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.
Cost Savings Initiatives and Other Charges During fiscal 2024, the Company continued the implementation of 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, inf ormation technology contracts, professional services, logistics and operational costs, and corporate payroll.
Cost Savings Initiatives and Other Charges During fiscal 2025, the Company continued the implementation of targeted cost reductions. Expense savings are being derived across various areas of the Company, including retail store efficiencies, marketing expenses, inf ormation technology contracts, professional services, logistics and operational costs, and corporate payroll.
We perform physical inventory counts throughout the year and adjust the shrinkage provision accordingly. The balance of inventory adjustments wa s $8.1 million an d $16.5 million for these matters as of the fiscal years ended February 3, 2024, and January 28, 2023, respectively.
We perform physical inventory counts throughout the year and adjust the shrinkage provision accordingly. The balance of inventory adjustments wa s $7.7 million an d $8.1 million for these matters as of the fiscal years ended February 1, 2025, and February 3, 2024, respectively.
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.
(“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.
To mitigate some of these inflationary and supply chain pressures, we implemented strategic price increases across both of our brands in late fiscal 2022 through fiscal 2024. We will continue to monitor our pricing as it relates to the current macroeconomic trends.
We have also seen a trend of steeply increasing digital media costs. To mitigate some of these inflationary and supply chain pressures, we implemented strategic price increases across both of our brands in late fiscal 2022 through fiscal 2024. We will continue to monitor our pricing as it relates to the current macroeconomic trends.
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.
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. Calculation excludes sales for the fifty-third week in fiscal 2024. (5) Dollars not in thousands.
Subsequent to the annual impairment test, due to triggering events, the Company performed an additional quantitative analysis and recorded an impairment charge of $5.4 million in the fourth quarter of fiscal 2024, further described in Note 15 herein.
Subsequent to the annual impairment test, due to triggering events, the Company performed an additional quantitative analysis and recorded an impairment charge of $6.2 million in the fourth quarter of fiscal 2025, further described in Note 15 of the Consolidated Financial Statements herein.
Net cash provided by operating activities was $48.0 million during fiscal 2024, as compared to net cash used in operating activities of $13.4 million during fiscal 2023 .
Net cash used in operating activities was $14.1 million during fiscal 2025, as compared to net cash provided by operating activities of $48.0 million during fiscal 2024.
Goodwill was fully impaired during fiscal 2023, leavi ng no balance. Our Pura Vida brand, an indefinite-lived asset, is not amortized but assessed for impairment at least annually or whenever events or circumstances indicate that the brand may be impaired .
Prior to fiscal 2024, the Company performed an annual impairment test for its goodwill. Goodwill was fully impaired during fiscal 2023, leaving no balance. The Pura Vida brand, an indefinite-lived asset, is not amortized but assessed for impairment at least annually or whenever events or circumstances indicate that the brand may be impaired.
We evaluate our accounting policies, estimates, and judgments on an on-going basis. We base our estimates and judgments on historical experience and various other factors that we believe to be reasonable under the circumstances.
We evaluate our accounting policies, estimates, and judgments on an on-going basis. We base our estimates and judgments on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions and conditions.
Actual results may differ from these estimates under different assumptions and conditions. 42 Table of Contents We evaluate the development and selection of our critical accounting policies and estimates and believe that the following policies and estimates involve a higher degree of judgment or complexity and are most significant to reporting our results of operations and financial position, and are therefore discussed as critical.
We evaluate the development and selection of our critical accounting policies and estimates and believe that the following policies and estimates involve a higher degree of judgment or complexity and are most significant to reporting our results of operations and financial position, and are therefore discussed as critical.
Net cash used in investing activities was $13.8 million in fiscal 2024, compared to $8.2 million in fiscal 2023.
Net cash used in investing activities was $10.4 million in fiscal 2025, compared to $13.8 million in fiscal 2024.
Due to subsequent triggering events, the Company performed a second quantitative analysis of the carrying value of the Pura Vida brand in the fourth quarter of fiscal 2024 and recorded an impairment charge of $5.4 million, further described in Note 15 to the Notes to the Consolidated Financial Statements herein.
For the annual impairment analysis performed during fiscal 2024, the Company performed a quantitative analysis, as well as subsequent analyses due to triggering events, further described in Note 15 of the Notes to the Consolidated Financial Statements herein. An impairment charge of $5.4 million was recorded during fiscal 2024 for the Pura Vida brand.
We also continued to make investments in customer data science, business analytics, and pricing optimization, allowing us to collect and analyze data and make fact-based decisions to more efficiently run our business.
We also continued to make investments in customer data science, business analytics, and pricing optimization, allowing us to collect and analyze data and make fact-based decisions to more efficiently run our business. While we remain confident in our strategic direction, we continue to make refinements based on selling data and customer feedback.
SG&A expenses related to Vera Bradley and corporate unallocated w ere $192.1 million compared to $211.6 million i n the comparable prior-year period. SG&A expenses related to Pura Vida were $49.4 million compared to $53.4 million in the comparable prior-year period.
SG&A expenses related to Vera Bradley and corporate unallocated were $186.9 million compared to $192.1 million in the comparable prior-year period. SG&A expenses related to Pura Vida were $36.9 million compared to $49.4 million in the comparable prior-year period.
The estimates and assumptions used in the determination of the fair value of the Pura Vida brand include the projected revenue growth, long-term growth rate, the royalty rate, and discount rate. As of February 3, 2024, the carrying value of the Pura Vida brand was $6.2 million.
The estimates and assumptions used in the determination of the fair value of the Pura Vida brand include the projected revenue growth, long-term growth rate, the royalty rate, and discount rate.
Remodeled stores are included in average net revenues per gross square foot unless the store was closed for a portion of the period. Calculation excludes sales for the fifty-third week in fiscal 2024.
Remodeled stores are included in average net revenues per gross square foot unless the store was closed for a portion of the period. Calculation excludes sales for the fifty-third week in fiscal 2024. Fiscal 2025 Compared to Fiscal 2024 Net Revenues For fiscal 2025, net revenues decreased $98.8 million, or 21.0%, to $372.0 million, from $470.8 million for fiscal 2024.
For the annual impairment analysis performed during fiscal 2023, the Company performed a quantitative analysis, as well as subsequent analyses due to triggering events, further described in Note 15 to the Notes to the Consolidated Financial Statements herein. Impairment charges of $44.3 million and $25.0 million were recorded during fiscal 2023 for goodwill and the Pura Vida brand, respectively.
For the annual impairment analysis performed during fiscal 2023, the Company performed a quantitative analysis, as well as subsequent analyses due to triggering events, further described in Note 15 of the Notes to the Consolidated Financial Statements herein.
For fiscal 2024, operating inc ome increased $10.8 million, or 21.1%. As a percentage of VB Direct segment net revenues, operating income in the VB Direct segment was 20.0% and 15.6% for fiscals 2024 and 2023, respectively.
For fiscal 2025, operating income decreased $36.6 million, or 59.2%. As a percentage of VB Direct segment net revenues, operating income in the VB Direct segment was 9.8% and 20.0% for fiscals 2025 and 2024, respectively.
Cost of sales includes the direct cost of purchased merchandise, distribution center costs, operations overhead, duty, all inbound freight costs incurred, and inventory adjustments including adjustments described in Note 16 to the Notes to the Consolidated Financial Statements herein. The components of our reported cost of sales may not be comparable to those of other retail and wholesale companies.
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 including adjustments described in Note 16 to the Notes to the Consolidated Financial Statements herein.
As a percentage of Pura Vida segment net revenues, operating loss in the Pura Vida segment was (2.7)% and (79.9)% for fiscals 2024 and 2023, respectively.
As a percentage of VB Indirect segment net revenues, operating income in the VB Indirect segment was 25.2% and 32.9% for fiscals 2025 and 2024, respectively.
Selling, G eneral, and Administrative Expenses (“SG&A”) For fiscal 2024, SG&A expenses decreased $23.5 million, or 8.9%, to $241.5 million, from $265.0 million for fi scal 2023. As a percentage of net revenues, SG&A expenses were 51.3% and 53.0% for fiscal 2024 an d fiscal 2023, respectively.
Selling, General, and Administrative Expenses (“SG&A”) For fiscal 2025, SG&A expenses decreased $17.7 million, or 7.3%, to $223.8 million, from $241.5 million for fiscal 2024. As a percentage of net revenues, SG&A expenses were 60.2% and 51.3% for fiscal 2025 and fiscal 2024, respectively.
Th e increase in cash used in investing activities was primarily a result of the 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 store relocations in the prior year that did not recur.
The decrease in cash used in investing activities was primarily a result of the purchase of the remaining 25% interest in Pura Vida for $10.0 million in the prior year, partially offset by an increase in property, plant, and equipment spending of $6.6 million primarily as a result of 8 store openings and Project Restoration initiatives in the current year, compared to 3 store openings in the prior year.
Macroeconomic Environment Our business is impacted by broader macroeconomic issues in the U.S. marketplace – and can be affected both positively and negatively over time.
Macroeconomic Environment Our business is impacted by broader macroeconomic issues in the U.S. marketplace – and can be affected both positively and negatively over time. The macroeconomic environment has been challenged by inflationary pressures, including high gas prices, interest rates, and other related factors that have impacted consumer discretionary spending.
For fiscal 2024, net revenues decreased $11.3 million, or 11.5%, to $87.1 million, from $98.4 million for fiscal 2023. The decrease was primarily due to a decline of $10.4 million in e-commerce sales due to a continued decline in social and digital media effectiveness, as well as a decline of $3.5 million in wholesale sales.
Pura Vida . For fiscal 2025, net revenu es decreased $33.9 million, or 38.9%, to $53.2 million, from $87.1 million for fiscal 2024. The decrease was primarily due to a decrease in e-commerce sales due to a continued decline in social and digital media effectiveness, as well as decreased wholesale sales, partially offset by an increase in retail store sales.
Cash Flow Analysis A summary of operating, investing, and financing activities is shown in the following table (in thousands): Fiscal Year Ended February 3, 2024 January 28, 2023 January 29, 2022 Net cash provided by (used in) operating activities $ 47,993 $ (13,421) $ 39,861 Net cash used in investing activities (13,770) (8,239) (4,154) Net cash used in financing activities (3,548) (20,105) (11,413) Net Ca sh Provided by (Used in) Opera ting Activities Net cash provided by (used in) operating activities consists primarily of net income (loss) adjusted for non-cash ite ms, including depreciation, amortization, impairment charges, deferred taxes, and stock-based compensation; and the effect of changes in assets and liabilities.
We believe that cash 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. 37 Table of Contents Cash Flow Analysis A summary of operating, investing, and financing activities is shown in the following table (in thousands): Fiscal Year Ended February 1, 2025 February 3, 2024 January 28, 2023 Net cash (used in) provided by operating activities $ (14,102) $ 47,993 $ (13,421) Net cash used in investing activities (10,373) (13,770) (8,239) Net cash used in financing activities (22,515) (3,548) (20,105) Net Ca sh (Used in) Provided by Operating Activities Net cash (used in) provided by operating activities consists primarily of net (loss) income 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.
Income Tax Expense (Benefit) For fiscal 2024, we recorded income tax expense of $3.5 million at an effective tax rate of 30.8%, compared to income tax benefit of $15.6 million at an effective tax rate of 16.5% for fiscal 2023.
Interest Income, Net For fiscal 2025, net interest income increased $0.2 million to $1.1 million from $0.9 million in fiscal 2024. Income Tax Expense For fiscal 2025, we recorded income tax expense of $21.0 million at an effective tax rate of (50.8)%, compared to income tax expense of $3.5 million at an effective tax rate of 30.8% for fiscal 2024.
Corporate Unallocated . For fiscal 2024, corporate unallocated expens es decreased $17.0 million, or 18.8% to $73.4 million from $90.3 million in the prior-year period.
Corporate Unallocated . For fiscal 2025, corporate unallocated expenses decreased $5.5 million, or 7.5% to $67.9 million from $73.4 million in the prior-year period.
We believe we have the ability to sell some of our retired finished goods through a number of channels, including our Vera Bradley and Pura Vida websites, the Vera Bradley online outlet site, Vera Bradley outlet stores, the Vera Bradley Annual Outlet Sale, and through third-party liquidators as needed.
We believe we have the ability to sell some of our retired finished goods through a number of channels, including our Vera Bradley and Pura Vida websites, the Vera Bradley online outlet site, Vera Bradley outlet stores, the Vera Bradley Annual Outlet Sale, and through third-party liquidators as needed. 39 Table of Contents Valuation of Long-lived Assets Property, plant, and equipment and operating right-of-use assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable.
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.
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. Goodwill and Other Intangible Assets Prior to February 1, 2025 identifiable intangible assets consisted of the Pura Vida brand and customer relationships.
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, as well as decreased SG&A expenses. Pura Vida. For fiscal 2024, operatin g loss decreased $76.3 million, or 97%.
The decrease in operating income as a percentage of VB Indirect segment net revenues was primarily due to reduced margin for indirect liquidations sales, an increase in wholesale discounting, and SG&A expense deleverage resulting from decreased sales. Pura Vida. For fiscal 2025, operating loss increased $12.8 million, or 551.5%.
A $69.3 million impairment charge of goodwill and intangible assets related to Pura Vida goodwill and the indefinite-lived Pura Vida brand intangible asset was recorded in fiscal 2023 within the Pura Vida segment. For additional information, refer to Goodwill and Other Intangible Assets herein.
A $5.4 million impairment charge of the indefinite-lived Pura Vida brand intangible asset was recorded in fiscal 2024 within the Pura Vida segment. For additional information, refer to Note 15 of the Consolidated Financial Statements herein. Other Income, Net For fiscal 2025, net other inco me totaled $0.9 million, consistent with the prior year.
Vera Bradley comparable sale s decreased $22.8 million, or 7.1%, which includes a 9.6% decrease in comparable store 38 Table of Contents sales as well as a 2.6% decrease in e-commerce sales.
Vera Bradley comparable sales decreased $49.6 million, or 16.6%, which includes a 22.2% decrease in comparable store sales as well as a 7.3% decrease in e-commerce sales. The decrease in comparable sales and comparable store sales was 35 Table of Contents impacted by reduced traffic, conversion, and units sold primarily in the outlet channel as well as the full-line channel.
For fiscal 2024, net income attributable to Vera Bradle y, Inc. increased $67.5 million to $7.8 million from net loss attributable to Vera Bradley, Inc. of $(59.7) million in fiscal 2023 due to the factors described in the captions above.
Net (Loss) Income For fiscal 2025, there was a net loss of $(62.2) million, a $70.0 million decrease, from net income of $7.8 million in fiscal 2024 due to the factors described in the captions above.
The decrease in cash used in financing activities was primarily due to a decrease in repurchases of common stock of $15.9 million. Refer to the Company's Annual Report on Form 10-K filed with the SEC on March 28, 2023, for a comparison of fiscal 2023 to fiscal 2022 cash flow activity.
Refer to the Company's Annual Report on Form 10-K filed with the SEC on March 29, 2024 , for a comparison of fiscal 2024 to fiscal 2023 cash flow activity. Credit Agreement On September 7, 2018, Vera Bradley Designs, Inc.
Impairment of Goodwill and Intangible Assets Fiscal 2024 included a $5.4 million charge for impairment of the indefinite -lived Pura Vida brand intangible asset, which is reflected within the Pura Vida segment.
These decreases were partially offset by an increase of $2.6 million for property, plant, and equipment impairment charges in the current year. Impairment of Intangible Assets Fiscal 2025 included a $6.2 million charge for impairment of the indefinite-lived Pura Vida brand intangible asset, which reflects a full impairment and is recorded within the Pura Vida segment.
The decrease in corporate unallocated expenses was primarily due to a decrease in severance charges of $6.8 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 decrease of $4.3 million a portion of which were associated with cost savings initiatives and other professional fees that did not recur in the current year; a reduction in employee-related expenses of $2.9 million primarily related to lower headcount, partially offset by an increase in incentive compensation; $0.6 million for a lease right-of-use asset charge in the prior year that did not recur in the current year; and $2.4 million in other net corporate expense reductions including a reduction in information technology contracts, corporate advertising expense, and other corporate expenses.
The decrease in corporate unallocated expenses was primarily due to a $6.2 million decrease in employee related expenses including incentive compensation and salaries resulting from headcount reductions and $0.2 million in net other expense reductions, partially offset by an increase of $0.6 million in advertising related to Project Restoration and an increase in professional fees of $0.3 million.
Net working capital changes include an increase in sources of cash from inventories, accounts receivable and accounts payable, partially offset by increases in use of cash from prepaid expenses and other assets and income taxes. 41 Table of Contents Net Cash Used in Investing Activities Investing activities consisted primarily of investments and capital expenditures related to new store openings, buildings, operational equipment, and information technology investments.
Additionally,there was a net use of cash in the current year period in changes in assets and liabilities of $12.9 million, primarily driven by a decrease cash provided by inventories. Net Cash Used in Investing Activities Investing activities consisted primarily of investments and capital expenditures related to new store openings, buildings, operational equipment, and information technology investments.
Operatin g Income (Loss) For fiscal 2024, operating inco me increased $105.3 million, or 111.0%, to $10.4 million from an operating loss of $(94.9) million for fiscal 2023. As a percentage of net revenues, operatin g income (loss) was 2.2% and (19.0)% f or fiscal 2024 and fiscal 2023, respectively.
Operating (Loss) Income For fiscal 2025, there was an operating loss of $(42.4) million, a $52.8 million decrease, or 505.7%, from operating income of $10.4 million for fiscal 2024. As a percentage of net revenues, operating (loss) income was (11.4)% and 2.2% for fiscal 2025 and fiscal 2024, respectively. Operating (loss) income decreased due to the factors described above.
For the annual impairment analysis performed during fiscal 2023, the Company performed a quantitative analysis, as well as subsequent analyses due to triggering events, further described in Note 15 of the Notes to the Consolidated Financial Statements herein. Impairment charges of $44.3 million and $25.0 million were recorded during fiscal 2023 for goodwill and the Pura Vida brand, respectively.
Impairment charges of $44.3 million and $25.0 million were recorded during fiscal 2023 for goodwill and the Pura Vida brand, respectively. 40 Table of Contents
For fiscal 2024, net reven ues increased $0.5 million, or 0.7%, to $73.8 million, from $73.3 million for fiscal 2023, reflecting an increase in certain key account orders, partially offset by a decline in sales to certain specialty partners. Fiscal 2024 net revenues also include approximately $2.1 million attributed to the extra week in fiscal 2024. Pura Vida .
The decrease is primarily driven by decreased specialty and other indirect retailer sales resulting from reduced customer count and order volume, as well as a decrease in liquidation orders. These decreases were partially offset by an increase in certain key account orders. Fiscal 2024 net revenues also include approximately $2.1 million attributed to the extra week in fiscal 2024.
These decreases were partially offset by price increases on certain merchandise in the current-year. Fiscal 2024 net revenues also include approximately $2.8 million attributed to the extra week in fiscal 2024. VB Indirect.
Fiscal 2024 net revenues also include approximately $2.8 million attributed to the extra week in fiscal 2024. VB Indirect. For fiscal 2025, net revenues decreased $12.6 million, or 17.1%, to $61.2 million, from $73.8 million for fiscal 2024.
Operatin g income increased due t o the factors described above. 39 Table of Contents The following table provides additional information about our operat ing income (loss) ( in thousands): Fiscal Year Ended $ Change % Change February 3, 2024 January 28, 2023 Operating Income (Loss): VB Direct $ 61,873 $ 51,097 $ 10,776 21.1 % VB Indirect 24,279 22,965 1,314 5.7 % Pura Vida (2,321) (78,591) 76,270 97.0 % Less: Unallocated corporate expenses (73,389) (90,342) 16,953 18.8 % Operating income (loss) $ 10,442 $ (94,871) $ 105,313 111.0 % VB Direct .
The following table provides additional information about our operating (loss) income (in thousands): Fiscal Year Ended $ Change % Change February 1, 2025 February 3, 2024 Operating (Loss) Income: VB Direct $ 25,240 $ 61,873 $ (36,633) (59.2) % VB Indirect 15,414 24,279 (8,865) (36.5) % Pura Vida (15,121) (2,321) (12,800) (551.5) % Less: Unallocated corporate expenses (67,889) (73,389) 5,500 7.5 % Operating (loss) income $ (42,356) $ 10,442 $ (52,798) 505.6 % 36 Table of Contents VB Direct .
Fiscal 2024 Compared to Fiscal 2023 Net Revenues For fiscal 2024, net reve nues decreased $29.2 million, or 5.8%, to $470.8 million, from $500.0 million for fiscal 2023. VB Direct. For fiscal 2024, net rev enues decreased $18.3 million, o r 5.6%, to $309.9 million, from $328.2 million for fiscal 2023.
Fiscal 2024 net revenues also include approximately $6.0 million attributable to the extra week in fiscal 2024. VB Direct. For fiscal 2025, net rev e nues decreased $52.3 million, or 16.9%, to $257.6 million, from $309.9 million for fiscal 2024.
The increase in cash provided by operating activities was primarily related to an increase in net income of $87.2 million and a non-cash change in deferred income taxes of $19.4 million, partially offset by a change in non-cash impairments of $65.2 million. An additional source of operating cash included changes in net working capital of $19.2 million.
The increase in cash used in operating activities was primarily related to a net loss of $(62.2) million, a $70.0 million decrease, from net income in the comparable prior-year period, $0.3 million in other non-cash items, partially offset by a change in deferred income taxes of $18.6 million and property, plant, and equipment impairment charges of $2.6 million in the current year period.
These decreases were partially offset by an increase in retail store sal es. Fiscal 2024 net revenues also include approximately $1.1 million attributed to the extra week in fiscal 2024. Gross Profit For fiscal 2024, gross prof it increased $17.4 million, or 7.3%, to $256.4 million, from $239.0 million for fi scal 2023.
Fiscal 2024 net revenues also include approximately $1.1 million attributed to the extra week in fiscal 2024. Gross Profit For fiscal 2025, gross prof it decreased $69.6 million, or 27.1%, to $187.8 million, from $256.4 million for fiscal 2024. As a percentage of net revenues, gross profit decreased to 50.2% for fiscal 2025, from 54.5% for fiscal 2024.
At the Vera Bradley brand: • We expanded our robust product innovation pipeline, including launching our Leather Collection, which was highly successful and will expand in fiscal 2025. • We launched our NFL collection and will add more teams this year. • We continued another year of product collaborations with iconic brands such as Disney, Harry Potter, Star Wars, Hello Kitty, and Peanuts, which align with our target customers and expand our customer reach. • We made strides in sustainability by committing that the majority of our cotton products will be Better Cotton TM by fiscal 2025. • In the fourth quarter, we transformed our online outlet from a flash-sale model to an everyday extension of our outlet stores – outlet.verabradley.com.
At the Vera Bradley brand: • We launched the first phase of our renewed vision for Vera Bradley in July fiscal 2025, which included elevated brand product, marketing, store design and website in our Brand stores and on verabradley.com. • We expanded our NFL collection by adding representation for more teams. • We continued another year of product collaborations with iconic brands such as Disney, Wicked, and Peanuts, which align with our target customers and expand our customer reach. • We are a Better Cotton TM member and continue to increase our procurement of cotton from Better Cotton TM supply chain partners. • Our online site – outlet.verabradley.com, has brought new customers to the brand and provided steady performance throughout the year, helping offset weakness in the outlet store channel. • We continued to strengthen and rationalize our store base.
We have taken needed steps, via product, marketing, and expense discipline, to improve the profitability of our full-line stores and closed fewer locations than originally expected. In fiscal 2024, we closed eight underperforming full-line stores and one outlet store, and opened three outlet stores, ending the fiscal year with 43 full-line and 81 outlet locations.
In fiscal 2025, we closed five underperforming full-line stores and one outlet store, and opened one full-line store and seven outlet stores, ending the fiscal year with 39 full-line and 87 outlet locations.
Executive Summary Some of our major achievements for fiscal 2024 are as follows: We launched our long-term strategic plan, Project Restoration, and completed the first year of our turnaround. We thoughtfully outlined our plans in each of the four pillars – Consumer, Brand, Product, and Channel – and began implementation of key initiatives.
Executive Summary Some of our major achievements for fiscal 2025 are as follows: We made continued progress on our long-term strategic plan, Project Restoration, our comprehensive strategic initiative to transform our business model and brand positioning.
The decrease in consolidated SG&A expenses for fiscal 2024 was primarily due to a decrease in employee-related expenses of $6.4 million due to a reduction in headcount, partially offset by an increase in incentive compensation; a decrease in severance charges of $6.3 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 $4.2 million decrease in professional expenses, a portion of which were associated with cost savings initiatives and other professional 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 $5.2 million in other net expense reductions which included spending reductions related to information technology contracts, visual merchandising, and other expenses.
The decrease in consolidated SG&A expenses for fiscal 2025 was primarily due to a decrease in employee-related expenses of $13.4 million due to a reduction in headcount and incentive compensation; a $2.6 million decrease in selling expenses due to decreased sales; decreased advertising of $2.5 million, primarily related to Pura Vida variable advertising due to decreased sales, partially offset by Vera Bradley advertising largely related to Project Restoration; a $1.6 million decrease in intangible asset amortization; and $0.2 million in other net expense reductions.
VB Indirect . For fiscal 2024, operating inc ome increased $1.3 million, or 5.7%. As a percentage of VB Indirect segment net revenues, operating income in the VB Indirect segm ent was 32.9% and 31.3% f or fiscals 2024 and 2023, respectively.
The decrease in operating income as a percentage of VB Direct segment net revenues was primarily due to decreased sales, a decrease in gross margin as a percent of net revenues driven by a change in sales channel mix, and SG&A expense deleverage associated with decreased sales. VB Indirect . For fiscal 2025, operating income decreased $8.9 million, or 36.5%.
The 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. 40 Table of Contents Ne t Income (Loss) For fiscal 2024, net inco me increased $87.2 million to $7.8 million from a net loss of $(79.4) million in fiscal 2023 due to the factors described in the captions above.
The effective tax rate change was primarily attributable to the full valuation allowance recorded against the Company's net deferred tax assets, as well as the relative impact of permanent and discrete items in the current-year period compared to the prior-year period which largely relates to non-deductible executive compensation.
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This brought new customers to the brand and helped offset weakness in the outlet store channel. • We made navigation changes on verabradley.com, which have been successful in reducing bounce rate and driving conversion and sales. • We continued to strengthen and rationalize our store base.
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Most of these shifts are occurring in our product and pricing strategy.
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At the Pura Vida brand: • On the marketing front, our comprehensive customer data platform implemented in fiscal 2024 is allowing us to be more analytical and to more strategically target customers and potential customers, with a keen focus on both customer acquisition and retention. • Our summer and fall “Live Free” and “College Mobile” tours were successes for customer engagement. • In fiscal 2024, we continued collaborations with Disney, Harry Potter, Hello Kitty, and the World Surf League; partnered with key influencers; and offered themed-collections centered around key events such as Shark Week. • We continued to innovate and added a new men’s jewelry collection, which still targets our core customer, who purchases these items for the men in her life. 33 Table of Contents • Based on the success of our existing Pura Vida stores, we identified two new Pura Vida store locations that will open in fiscal 2025. • And, to gain both operational and strategic efficiency, we moved the Pura Vida store operations under the Vera Bradley team.
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We are continuing to look for opportunities to improve the full-line profitability of our full-line store portfolio by re-balancing our existing fleet through select closures along with identifying future market opportunities. We will continue to focus on our highest-potential stores by enhancing the customer experience.
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As a result of the temporary closure of all Vera Bradley stores due to COVID-19 during portions of the first and second quarters of fiscal 2021, the Company's fiscal 2022 comparable store sales and comparable sales calculations are not meaningful and therefore are not provided.
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At the Pura Vida brand: • Pura Vida found positive responses through collegiate football, gymnastics, and sorority activations. • In fiscal 2025, Pura Vida had collaborations with Dutch Brothers Coffee, Kulani Kinis swimwear, and the Varsity Cheer League; partnered with key influencers; and offered themed-collections centered around key events such as Shark Week. • Pura Vida continued to innovate and expand on our personalized offerings through harper charms, which still targets our core customer, and provides her endless options to suit her style. • Two new Pura Vida store locations were opened in fiscal 2025.
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Impairment Charges Goodwill and Other Intangible Assets The Company performs its indefinite-lived asset impairment test annually, or more frequently if facts and circumstances indicate possible impairment. Prior to fiscal 2024, the Company performed an annual impairment test for its goodwil l.
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The components of our reported cost of sales may not be comparable to those of other retail and wholesale companies.
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We have experienced significantly lower sales from our Pura Vida e-commerce channel due to a decline in social and digital media effectiveness, as well as lower wholesale sales. These lower sales volumes had a negative impact on the fair value determination of intangible assets in fiscal years 2024 and 2023.
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Fiscal Year Ended (1) ($ in thousands) February 1, 2025 February 3, 2024 January 28, 2023 Statement of (Loss) Income Data: Net revenues $ 371,967 $ 470,786 $ 499,961 Cost of sales 185,128 214,373 261,017 Gross profit 186,839 256,413 238,944 Selling, general, and administrative expenses (2) 223,808 241,457 265,016 Impairment of goodwill and intangible assets 6,237 5,429 69,256 Other income, net 850 915 457 Operating (loss) income (42,356) 10,442 (94,871) Interest income (expense), net 1,118 890 (153) (Loss) income before income taxes (41,238) 11,332 (95,024) Income tax expense (benefit) 20,950 3,494 (15,640) Net (loss) income (62,188) 7,838 (79,384) Less: Net loss attributable to redeemable noncontrolling interest — — (19,649) Net (loss) income attributable to Vera Bradley, Inc. $ (62,188) $ 7,838 $ (59,735) Percentage of Net Revenues: Net revenues 100.0 % 100.0 % 100.0 % Cost of sales 49.8 % 45.5 % 52.2 % Gross profit 50.2 % 54.5 % 47.8 % Selling, general, and administrative expenses 60.2 % 51.3 % 53.0 % Impairment of goodwill and intangible assets 1.7 % 1.2 % 13.9 % Other income, net 0.2 % 0.2 % 0.1 % Operating (loss) income (11.4) % 2.2 % (19.0) % Interest income (expense), net 0.3 % 0.2 % — % (Loss) income before income taxes (11.1) % 2.4 % (19.0) % Income tax expense (benefit) 5.6 % 0.7 % (3.1) % Net (loss) income (16.7) % 1.7 % (15.9) % Less: Net loss attributable to redeemable noncontrolling interest — % — % (3.9) % Net (loss) income attributable to Vera Bradley, Inc.
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The Company performed its annual impairment test in the second quarter of fiscal 2024 and recorded no impairment charges based on its quantitative analysis at that time.
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The decrease in consolidated gross profit as a percentage of net revenues for the fiscal year was driven by sales channel mix, reduced margins for indirect liquidation sales, and inventory adjustments related to excess inventory in the Pura Vida segment.
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Refer to Note 15 to the Notes to the Consolidated Financial Statements herein for additional information regarding the goodwill and indefinite-lived intangible assets impairment tests.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeForeign Exchange Rate Risk We source a majority of our finished goods from various suppliers primarily in Cambodia, Vietnam, Indonesia, El Salvador, China, and the Philippines. Substantially all purchases and sales involving foreign persons are denominated in U.S. dollars, and therefore we do not hedge using any derivative instruments.
Biggest changeForeign Exchange Rate Risk We source a majority of our finished goods from various suppliers primarily in Cambodia, Vietnam, Indonesia, El Salvador, China, and the Philippines. Substantially all purchases and sales involving foreign persons are denominated in U.S. dollars, and therefore we do not hedge using an y derivative instruments.
Historically, we have not been impacted materially by changes in exchange rates. 45 Table of Contents
Historically, we have not been impacted materially by changes in exchange rates. 41 Table of Contents

Other VRA 10-K year-over-year comparisons