OXM - Vera Bradley: A Risky Turnaround Play

2024-06-10 23:17:18 ET

Summary

• Vera Bradley's shares have dropped 17.4% since December 2021, despite positive financial performance in the first half of fiscal year 2022.
• The company's revenue has been declining, but profitability has improved due to cost reductions and inventory management.
• Analysts expect a decline in revenue for the first quarter of fiscal year 2025, but an increase in profits. The stock is considered cheap but risky.

Times have not been good for lifestyle brand owner Vera Bradley ( VRA ). Back in December of 2021, I wrote an article that took a bullish stance on the company. Even though I acknowledged that the company had a mixed operating history, financial performance that was available for the first half of the 2022 fiscal year was encouraging. Revenue, profits, and cash flows were all higher year over year. Add on top of this how cheap shares were, not only on an absolute basis, but also compared to similar companies, and I could not help but to rate the company a ‘buy.’....

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