VRA - Vera Bradley: Stitching Together An Opportunity

2024-03-20 02:48:11 ET

Summary

• Vera Bradley is a handbag and accessories brand that has seen a decline in sales.
• VRA has fixed its inventory supply to a more appropriate level for its sales, and gross margins have improved as inventory levels improved.
• Growth will be limited, but the valuation is inexpensive, there is no debt, and a sizable share repurchase program all help tilt the risk/reward toward reward, with minimal downside risks.

I have not looked in on the softline retail name Vera Bradley ( VRA ) since last February (2023), and as it remains a popular brand in my social circle, I like keeping an eye on how the business is doing. Last year, from an investor standpoint, I considered Vera Bradley a hold on working capital challenges with inventory management and the challenge of sustaining margins. While the shares have appreciated in value overall since then, they did take a dive on the release of fiscal year 2024 results a few days ago....

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