NEW YORK (
(VRA - Get Report)
shares tanked in post-markets trading as the company tempered investor expectations for the remainder of the year despite beating Wall Street expectations in the second quarter.
Shares were falling 10% to $17.47 as investors shunned the handbag and luggage maker's stock. The Fort Wayne, Ind.-based company said profit rose 12% to $15 million, or earnings of 37 cents a share. Net revenue rose 1.9% to $125.4 million.
Analysts were expecting the company to earn 32 cents in the quarter, down 4% from the year-earlier period. Revenue was expected to rise 1% to $125 million, compared to 2012.
"We managed through considerable headwinds in the second quarter, yet delivered results in line with our expectations," CEO Michael Ray said in a statement. "Nonetheless, our product offering under-performed in the midst of an uncertain consumer environment, which affected traffic in our retail stores. While we are encouraged by our strategic progress and remain optimistic about our long-term prospects, we continue to have a cautious outlook for the remainder of the year."
Vera Bradley lowered its third-quarter revenue guidance to a range of $128 million to $130 million, compared to revenue of $138 million in last year's third quarter, it said.
The company expects gross margin in the third quarter to decline by 280 to 300 basis points over the prior year "primarily due to a shift in sales mix between the full-price and discount channels and increased promotional activity," it said.
It expects third-quarter earnings in a range of 33 cents to 35 cents a share. Wall Street was expecting earnings of 48 cents a share, on average, for the third quarter.
For the full year, it expects earnings of $1.47 to $1.52 a share compared to the consensus estimate of $1.71 a share.
-- Written by Laurie Kulikowski in New York.
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