This story has been updated from 12:35 P.M. with new information and closing stock prices.
NEW YORK (
) -- Retail stocks ended Thursday on a mixed note, after two more specialty retailers reported disappointing earnings, and a handful of retailers issued generally positive May same-store sales numbers.
(VRA - Get Report)
shares plunged 7.8% to $20.70 following news that its longtime CEO was resigning as well as slow same-store sales in the first quarter.
Vera Bradley announced late Wednesday that CEO Michael Ray informed the board hat he plans to retire from his position. Ray will continue as CEO until a successor is in place, the company said.
The handbag and accessories company said first-quarter 2014 earnings fell 26% from the year-earlier quarter to 23 cents a share, yet still beat Wall Street's expectations of 21 cents a share. Net income for the quarter was $9.2 million compared with $12.6 million the year before.
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Net revenue rose 5% to $123 million. Vera Bradley said that while store sales rose 34% in the quarter, the growth was from new stores opened. Comparable-store sales merely inched 0.9% higher, while online sales jumped 23% in the quarter.
On the other hand, total SG&A expenses were $55.2 million for the first quarter, roughly 45% of net revenue, up 460 basis points from the prior year, primarily due to "lower revenues in the indirect segment and full-price stores and annualization of employee-related expenses," the company said.
Vera Bradley's cash flow also declined by more than half from a year earlier to $14.9 million, related to increased inventory, it said.
The company narrowed its revenue and earnings forecast for the second quarter to a range of $123 million to $126 million, which essentially means little if any growth from the first quarter. Diluted earnings per share are expected to be in a range of 31 cents to 33 cents.
At least three analysts downgraded the stock following the earnings release and news of Ray's departure.
"In the near term, VRA's growth rate will likely be pressured as the company manages through challenges in the merchandise assortment and uncertainty at the executive level," Wells Fargo Securities analyst Evren Kopelman wrote in a note downgrading the stock to market perform.