The Coresight Research team was at the Vera Bradley 2019 investor day on October 3, in New York City. In this report, we discuss key insights from the day.

The company expects $490-505 million sales in FY20, a 17.8-21.4% increase compared to FY19, and to accelerate brand growth through a three-year plan.

Rob Wallstrom, Vera Bradley CEO, kicked off the presentation with a discussion of Vera Bradley’s solid balance sheet, brand position and its three-year plan.

• The company expects $490-505 million in sales in FY20, a 17.8-21.4% increase compared to FY19, and earnings per share (EPS) of $0.86-0.93, a 45.8-57.6% increase compared to FY19.
• The company’s newly created three-year plan contains a vision of restoring brand and business health, and building a platform for growth. Management stressed product innovation, operational excellence and customer acquisition as the key drivers for future growth.

The company’s acquisition of Pura Vida is designed to bring expertise in digital marketing and social customer engagement in house. Management offered a deeper discussion of Pura Vida’s existing marketing efforts and future development:

• On June 20, Vera Bradley completed the acquisition of a majority stake in Pura Vida, a fast-growing, digitally native lifestyle brand that offers bracelets, jewelry and other accessories. The brand has 1.9 million followers on Instagram, which is growing 40,000-50,000 per month.
• Pura Vida distribution channels include online and wholesale. The brand is also expanding subscription services.
• Pura Vida is adding charity collection within seasonal assortment and allowing customized jewelry.
• Pura Vida projects 2023 revenues of $240 million, a CAGR of 20% from 2018.

[caption id="attachment_97743" align="aligncenter" width="700"] Pura Vida’s charity collection
Source: Pura Vida[/caption]

Collaboration with a variety of brands is fueling growth.

[caption id="attachment_97744" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]

The company expects a low- to mid-single digit revenue growth for the core Vera Bradley business and hopes to double the revenue in five years. The company will take a disciplined approach to managing gross margin, expenses and capital development.