Tags: Vera | Bradley | growth | VRA

Vera Bradley: Retail Growth Prospect

By Tim Plaehn   |   Thursday, 27 Oct 2011 01:13 PM

Handbag and accessory producer Vera Bradley (VRA) is a year-old IPO with aggressive growth plans. So far in its short public company history the results have been positive for investors. Those looking for a growth prospect in the retail and fashion markets may want to take a look at this just over $1 billion market-cap company.

Vera Bradley designs, produces, markets and retails a line of handbags, accessories and travel items. Vera Bradley products are sold through independent and national retailers plus online retailers. The company is growing its own chain of retail stores and outlet centers as well as selling products through the VeraBradley.com website.

The company's initial public offering was in October 2010, with an IPO price of $16 per share and initial trading price of $24.

Vera Bradley reported fiscal 2012 results for the second quarter ending July 30, 2011. For the first half of the company's fiscal year, revenues increased 24 percent to $205 million from $165 million.

Net income for the six months was 61 cents per share, up from an adjusted 48 cents per share. The full year consensus estimate is earnings of $1.36 per share and the company is forecast to earn $1.62 in fiscal 2013.

Shifting emphasis

Business was good in the second quarter through all selling channels. What the company calls “indirect” revenues grew 18 percent year-over-year, while direct sales — from the company's own stores — grew by 46 percent.

The number of full-price and outlet stores increased by 16, almost doubling the number of retail outlets. Same-store sales results were up by 10 percent. Vera Bradley management plans to add up to 20 new stores per year with a long term goal of more than 300 retail outlets.

Recently, Piper Jaffray analysts reiterated their buy or overweight rating on VRA. A few weeks earlier, the analysts from Jefferies and Company initiated coverage, also with a buy rating. Both groups of analysts had target share prices 25 percent above the current share price.

The company reports next on Dec. 7.

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Handbag and accessory producer Vera Bradley (VRA) is a year-old IPO with aggressive growth plans. So far in its short public company history the results have been positive for investors. Those looking for a growth prospect in the retail and fashion markets may want to take...
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