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TheStreet Open House

Why Vera Bradley (VRA) Is Climbing on Wednesday

NEW YORK (TheStreet) -- Vera Bradley (VRA) is spiking on Wednesday after fourth-quarter sales and earnings exceeded analysts' estimates.

By early afternoon, shares had added 8% to $28.34.

The women's accessories maker recorded $157.5 million in revenue for the three months to Feb. 1, a 3.1% year-over-year decrease. However, in the direct segment revenues increased 5.2% to $108.7 million and net revenues in stores climbed 14.5%.

Comparable-store sales declined 10.2% and e-commerce revenue dropped 7.2%, reflecting a decrease in traffic, lower average transaction size and the negative impact of severe winter weather.

The Fort Wayne, Ind.-based business reported adjusted net income of 55 cents a share.

Analysts surveyed by Thomson Reuters had forecast net income of 46 cents a share and total sales of $146.86 million.

However, guidance for the year ahead came in below forecasts. For its first quarter, management guides for revenue in the range of $116 million to $120 million, less than analysts' estimates of $123.1 million. Earnings per share are expected between 11 cents and 13 cents a share, well below expectations of 22 cents a share.

Over fiscal 2015, sales are expected between $545 million and $565 million, with earnings of $1.20 to $1.30 a share. Analysts expected sales of $544.9 million and earnings of $1.50 a share.

"We continue to face external headwinds and certain challenges within the business, and fiscal 2015 will be a year of transition for Vera Bradley," said CEO Robert Wallstrom in a statement. "Even though fiscal 2015 will be challenging and a year of enormous change, our entire team is aligned and very excited about the future of our brand."

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TheStreet Ratings team rates VERA BRADLEY INC as a Buy with a ratings score of B. The team has this to say about their recommendation:

"We rate VERA BRADLEY INC (VRA) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations, increase in stock price during the past year, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

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