Wall Street rained on Vera VRA Bradley’s paisley march Wednesday, pulling shares of the purse and conform accessories tradesman down 16% to $15.14.
Behind the drop: fourth-quarter income fell 3% to $152.6 million from the year-ago entertain and net income fell 13% to $17.3 million. Vera Bradley additionally lowered full 2016 mercantile year revenue and gain superintendence as CEO Robert Wallstrom pronounced “overall commercial operation trends sojourn difficult.”
“By this time, we had approaching to recover movement in the business, but which has not happened,” Wallstrom said. “Our core business have been stability to buy the products. However, the first emanate is which we have not captivated sufficient code new business to the brand, and therefore, both trade and sales sojourn intensely challenging.”
In a cost-cutting move, the Fort Wayne, Ind., -based association pronounced it was shutting the six-year old production plant in circuitously New Haven – which employs 250 – in May. Instead, it will spin to cheaper abroad production
“It costs we estimate 90% some-more to make products domestically than in abroad factories, and the made at home production costs have one after another to climb year over year,” Wallstrom said. “We have been operative tough to figure out how to run the operations some-more efficiently. After clever investigate and consideration, we resolved which shutting this trickery is the right long-term monetary decision.”
Vera Bradley sandbagged a little on Wall Street as well.
Tuesday, Wunderlich Securities Eric Beder reiterated a buy rating on Vera Bradley and set a $27 cost target. By Wednesday, Beder recanted, slicing his letter of reference to a reason and environment a $15 cost target.
“While we determine with probably all government is you do to dilate the strech and pricing of the code and to register aloft returns, it is viewable which until Vera can materially dilate their patron base, formula will sojourn underneath element pressure; we see no reason to be overly assertive (again) until the patron bottom starts to turn,” Beder pronounced in a investigate note.
Vera Bradley, proposed in 1982 by friends Barbara Bradley Baekgaard and Patricia Miller, went open at $16 a share in 2010, peaking at scarcely $50 in 2011.
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