A bright spot was the November transformation of our online outlet from a flash-sale model to an everyday extension of our outlet stores. This brought new customers to the brand and helped offset weakness in the outlet store channel. On the Indirect side, our wholesale partners were cautious with inventory buys in the fourth quarter. Pura Vida year-over-year fourth quarter sales declined 21.6%, primarily due to decreases in ecommerce and wholesale revenues, as external marketing costs continued to rise and marketing effectiveness remained challenging. Our holiday gifts, like our annual Advent Box, and engraving categories performed best for the quarter. While we are actively addressing revenue stabilization and marketing effectiveness at Pura Vida, our key focus is managing the business for profitability.

As a result, we drove meaningful year-over-year operating margin improvement for the fourth quarter and full year. As I'm sure everyone listening understands, a strong balance sheet is incredibly important in retail and especially for Vera Bradley as Project Restoration enters an implementation stage. We continued to strengthen our already strong balance sheet, adding to our year-over-year cash position while strategically reducing our inventory levels. We ended the fiscal year with consolidated revenues of approximately $471 million. We generated GAAP net income of $7.8 million or $0.25 per diluted share, a return to profitability from a sizable loss last year. Excluding charges on a non-GAAP basis, net income for the fiscal year totaled $17.2 million or $0.55 per diluted share.

This improved profitability was primarily driven by gross margin performance and disciplined expense control. Now let me turn to Project Restoration. A little over a year ago, we began a comprehensive review of the consumer, brand, product, and channel components for both of our brands. This work culminated in our long-term strategic plan, Project Restoration, which addresses each of these four pillars. Through Project Restoration, we are taking targeted and prudent actions to stabilize revenues, while remaining focused on strong financial discipline. We believe execution of this companywide comprehensive initiative will drive long-term profitable growth and deliver value to our shareholders. At Vera Bradley, Project New Day launches in mid-July, and is the first manifestation of our Project Restoration work and a full pivot from where we are today.

It includes, among other things, the reveal of our new and elevated full-line branding and marketing, product, store design, and website. Our work on this initiative was informed by consumer research and current perceptions of the brand from both buyers and non-buyers. We believe we have the ability to attract new customers while keeping our current fans through product innovations and new marketing campaigns designed to inspire joy and connection. Our new assortment has broad appeal and uses new, higher quality, and softer fabrics and styles designed to not only look great, but feel great. I’d like to give you some more details on the progress within each pillar. For the consumer, we are focusing on restoring brand relevance, targeting casual and feminine 35 to 54-year-old women who value both fashion and function.

Our focus on the 35 to 54-year-old led us in search of data to understand where and how she shops. We are using this data to inform product design development and will continue to use this data to target new customers and embark on new partnerships, licensing deals, and collaborations to extend our reach. We've created a multiyear customer product growth plan with a focus on this core consumer target along with an appropriate level of marketing investment to acquire new customers as we launch new product and our refreshed brand vision midyear. For the brand, we are strategically marketing our distinctive and unique position as a feminine fashionable brand that connects with consumers on a deep, emotional level. Vera Bradley is a strong brand with tremendous brand recognition and we're going to make it even stronger by telling a new story about it.

We are refocusing our marketing efforts and shifting more marketing dollars to increase reach in a more precise way through the right media mix. Our initiatives will include more creative campaigns, enhanced digital reach, increased public relations and innovative store efforts to drive interest and gain new customers. We're also very excited about our new celebrity partner or Chief Joy Officer, who we will announce this summer and we are continuing to shift our focus from channel-specific customer acquisition to an omnichannel perspective for increased media effectiveness. For product, we're refocusing our core categories and items we are best at by innovating and expanding within our core products. We are elevating our colorful feminine heritage, keeping it distinctive, but more trend-right and modern through updated prints, colors, styles and designs.

And we will continue to enter into strategic adjacent lifestyle item introductions that make sense for our customers. We have the benefit of a strong brand with high brand recognition and will be offering something new in the full line accessory space under a good, better, best Halo [ph] model. These changes were derived carefully after extensive customer data analysis. There is more attention to key items like travel bags and these smaller items that fit inside bags like wallets and pouches that allow her to customize her look and personalize her organization. Products are curated to meet the needs of our customers, offering superior quality in fabrication, components and overall craftsmanship. We've improved the quality of most of our fabrics while keeping our commitment to increased use of preferred fibers and our retail price structure is unchanged.

Although the assortment will look new, it is unmistakably Vera Bradley and our existing customers will still recognize their favorite styles and our distinctive colors, patterns and quilting. The reception from our wholesale customers who have seen our new products at the Dallas, Atlanta and New York markets has been extremely positive. I just mentioned leather. Our revamped leather collection of bags, wallets and wristlets and other accessories debuted last fall. Leather performed well and the initial collection mostly sold out. We've built on this success and developed a major expansion as part of New Day. Our outlet stores and outlet website will get new made for outlet styles, prints and collaborations, as well as the benefit of select merchandise transferred from full-line stores throughout the third quarter.

Product collaborations will always be an important part of our brand expression. We continue to see strong response from partnerships with Disney, Hello Kitty and Peanuts, and those will continue in all channels. And then finally for the channel, we're building a balanced footprint that more clearly differentiates our full-line and outlet assortments and experience. We will accelerate our digital-first focus and online reach while maintaining brand-right wholesale relationships and exploring partnerships that will help us acquire new customers. Delivering growth in our ecommerce channels is a key priority. We will accelerate this digital-first focus and elevate our online presence to include more consumer focused features, storytelling and personalized experiences.

We are improving our online shopping experience and elevating creative, while offering our outlet assortment online on verabradleyoutlet.com. for the first time ever. We are doing a deep dive into our real estate strategy. Our full-line fleet is 80% in malls and not all of them are A malls. Traffic is declining in some locations and we need to adjust our strategy to optimize the fleet of both full-line and outlet stores. We will explore opening new formats, entering new markets, relocating stores where needed and increasing penetration in existing markets. We have already taken several expense disciplined steps to improve the profitability of our full-line stores. We will update our entire existing full-line store fleet with new branding and an improved shopping experience.

The stores will reflect a more modern, less cluttered and easier to shop experience with new fixturing and lighting, allowing the product to shine. Our current year capital budget of $12 million to $14 million is triple of last year's spending, and much of this is attributable to these remodels. In addition, we plan to open two full-line stores this year and are in the process of identifying prudent, modest store expansion plans for the future. We are also exploring new full-line formats with a focus on lifestyle centers. We're also taking a comprehensive approach to addressing the trends in Vera Bradley's outlet channel. We are reviewing all aspects of the outlet operating model for changes and improvements. Keep in mind that the outlet channel remains highly profitable and we will open one new outlet store this year.

Maintaining brand-right wholesale relationships are important and we are actively working with new specialty retailers where we know our customer is shopping. As you can see, there's a lot going on at Vera Bradley. Now let me turn to Pura Vida where we are shifting our focus to delivering profitability and balancing the ecommerce business with wholesale and retail stores. Pura Vida's revenues have declined the last two quarters, largely as a result of increased digital media costs that led to new to lower customer acquisition. We diversified our marketing spend and are making additional efforts to retain customers while continuing to work on each pillar of Project Restoration. For the consumer we're sharpening our focus on the 18 to 24-year-old collegiate girl.

We will shift our marketing strategy to increased appeal to Gen Z based on our most recent research. For the brand we are recentering our brand ethos on living life to the fullest, sharing real moments, places and faces in our marketing campaigns and sharpening our focus on Gen Z. We are more analytical, using our newly implemented comprehensive customer data platform to more strategically target customers and potential customers with a focus on acquisition, but especially on repeat purchases and retention. This significantly enhanced customer reporting and increased analytics have made us smarter in analyzing challenges and we are investing in new tools to AB test and improve the site experience and conversion. For product we are focused on delivering unique, fun, playful designs that are affordable and accessible with a dominant emphasis on bracelets and jewelry as well as other strategic adjacent categories.

We will continue to innovate around string bracelets and our other jewelry and accessory categories. Our custom bracelets, from Harper Charms to engravable items to building your own bracelets, are popular and continue to be a big growth opportunity. We will continue to pursue high profile collaborations like Hello Kitty, Shark Week and Harry Potter, which are always fan favorites and bring new customers to the brand. Social responsibility is important to the Pura Vida customer and we back this through our charity program which supports dozens of causes. And finally, for channel we continue to have strong focus on restoring ecommerce growth with a greater focus on repeat purchases as well as strategic growth of wholesale. Additionally, our success in retail stores has driven us to find new store locations for this year and beyond.

We expect to open at least two new additional stores this year. Now let me turn the call over to CFO, Michael Schwindle to review the financial results. Michael?

Michael Schwindle: Thank you Jackie and good morning everyone and thank you for joining us. Before we open for questions, I have a few highlights for the fourth quarter and the full year to cover. For the sake of clarity, the numbers I am discussing today are all non-GAAP in nature and exclude the charges outlined in today's press release. A complete detail of items excluded from the non-GAAP numbers, as well as a reconciliation of GAAP to non-GAAP can also be found in the release. Beginning with our fourth quarter, consolidated net revenues totaled $133.3 million compared to $147.1 million in the prior year. Consolidated net income totaled $3.5 million, or $0.11 per diluted share, compared to a net loss of $1 million, or $0.03 per diluted share last year.

The current year fourth quarter consisted of 14 weeks compared to 13 weeks in the prior year fourth quarter. The full year fiscal 2024 consisted of 53 weeks compared to 52 weeks in the prior fiscal year. Comparable sales discussed by Jackie and myself during this call were calculated based on 13 weeks in each of the fourth quarters and 52 weeks in each of the fiscal years. The additional week contributed approximately $6 million in net revenues and increased earnings per share by approximately one penny for both, the current year fourth quarter and the fiscal 2024 year. Current year fourth quarter Vera Bradley direct segment revenues totaled $93 million, a 6.6% decrease from $99.5 million in the prior year fourth quarter. Comparable sales decreased 10% from the prior year, largely driven by weakness in the outlet and full-line channels.

Total revenues were also impacted by store closures over the last twelve months, including eight full-line stores and one outlet store, while we also opened three outlet stores over the last twelve months. Vera Bradley Indirect segment revenues totaled $16.1 million, a 3.7% decrease over $16.7 million in the prior year fourth quarter. The decrease was primarily related to lower sales to certain specialty partners and key accounts. Pura Vida segment revenues totaled $24.2 million, a 21.6% decrease from $30.9 million in the prior year fourth quarter, primarily a result of declines in ecommerce and wholesale sales. Fourth quarter gross margin totaled $69.6 million or 52.3% of net revenues compared to $60.7 million or 41.3% of net revenues. The current year gross margin rate compared to the prior year rate was favorably impacted by lower year-over-year inventory reserve charges, lower inbound and outbound freight expense, lower supply chain costs and sell-through of previously reserved inventory, partially offset by increased promotional activity.

Prior year gross margin was materially impacted by inventory reserve charges and high inbound and outbound freight expense as well as overhead costs. SG&A expenses in the fourth quarter totaled $65.7 million, or 49.3% of net revenues compared to $64.4 million or 43.8% of net revenues in the prior year fourth quarter. Vera Bradley's current year non-GAAP SG&A expenses were higher than the prior year quarter, primarily due to incremental marketing expenses in the quarter, partially offset by savings from companywide cost reduction initiatives. Fourth quarter consolidated operating income totaled $4.1 million or 3.1% of net revenues, compared to a consolidated net operating loss of $3.5 million or 2.4% of net revenues in the prior year. Now, turning to the full year results, our consolidated net revenues for the year totaled $470.8 million compared to $500 million last year.

Consolidated net income totaled $17.2 million, or $0.55 per diluted share, compared to a net loss of $3.2 million, or $0.10 per diluted share last year. Vera Bradley Direct segment revenues for the current fiscal year totaled $309.9 million, a 5.6% decrease from $328.2 million in the prior year. Comparable sales for the year declined by 7.1%. Vera Bradley Indirect segment revenues for the fiscal year totaled $73.8 million, a 0.7% increase over 73.3 million in the prior year, primarily reflecting an increase in certain key account orders partially offset by a decline in certain specialty department revenues. Current year Pura Vida segment revenues totaled $87.1 million, an 11.5% decrease from $98.4 million in the prior year, reflecting declines in ecommerce and wholesale sales, partially offset by growth in retail store sales.

Gross margin for the current fiscal year totaled $256.4 million, or 54.5% of net revenues compared to $240.5 million, or 48.1% of net revenues last year. The current year gross profit rate compared to the prior year was favorably impacted again by year-over-year inventory reserve charges, lower year-over-year inbound and outbound freight expense, lower supply chain costs and sell-through of previously reserved inventory, partially offset by increase in promotional activity. For the fiscal year, SG&A expense totaled $234.7 million, or 49.9% of net revenues compared to $245.3 million or 49.1% of net revenues in the prior year. The decline in the current year expenses was driven by companywide cost reduction initiatives. For the fiscal year, the company's consolidated operating income totaled $22.6 million, or 4.8% of net revenues compared to consolidated operating loss of $4.4 million, or 0.9% of net revenues in the prior year.

Now, turning to the balance sheet, our fiscal year end cash and cash equivalents totaled $77.3 million compared to $46.6 million at the end of the last fiscal year. We continued to have no borrowings on our $75 million ABL facility at year end. Total fiscal yearend inventory was $118.3 million compared to 142.3 million last year. We have taken strategic actions to reduce our inventory levels and believe we are appropriately positioned as we head into spring and prepare for our new product launches in July. In fiscal 2024, we purchased approximately 360,000 shares of common stock at an average price of $6.10 per share for an aggregate of approximately $2.2 million. $25.5 million remains under our $50 million repurchase authorization and that expires in December of 2024.

Now looking forward to our guidance for fiscal 2025, our estimates for fiscal 2025 are based on current macroeconomic trends and expectations as we begin to unveil the results of Project Restoration and the launch of New Day midyear. As a result of this timing, we expect to continue to experience some revenue challenges in the first half of the fiscal year and see improving sales and profitability trends in the second half of the year. We expect to continue to take advantage of gross margin improvement opportunities and will manage our expense structure diligently. As a reminder, all forward looking guidance numbers are on a non-GAAP basis. For the full year fiscal 2025, we expect consolidated net revenues of $460 million to $480 million. As a reminder, net revenues totaled $470.8 million in fiscal 2024.

We expect Vera Bradley brand sales to grow by low single digits for the year, with accelerating sales in the second half as we launch new products, branding and marketing. We anticipate Pura Vida brand sales will decline in the mid-teen range as we continue to manage the business for profitability by addressing marketing efficiencies impacting ecommerce sales, which will be partially offset by increased retail sales. We also expect consolidated gross margin of 54% to 55% compared to 54.5% in fiscal 2024. The fiscal 2025 gross profit rate is expected to be relatively flat to last year due to product margin improvements and lower supply chain costs offset by increased shipping costs. Consolidated SG&A expense is expected to range from $229 million to $239 million compared to $234.7 million last year.

Year-over-year SG&A expenses are expected to be relatively flat to last year, driven by incremental marketing investments associated with the New Day launch offset by companywide expense reductions and lower Pura Vida expenses. This results in anticipated consolidated operating income of $21 million to $24.5 million compared to $22.6 million in fiscal 2024 along with diluted earnings per share of $0.54 to $0.62 compared to $0.55 last year. We also expect a net capital spending of approximately $12 million to $14 million versus $3.8 million last year. This spend reflects investments associated with new and remodeled stores as well as technology and logistics enhancements. As a result, our free cash flow is anticipated to be approximately $10 million in fiscal 2025 compared to $44.2 million in fiscal 2024.

And that concludes our formal remarks. So Sherry, we'd like to open up the call for questions.

See also 25 Countries With Highest Abortion Rates and Best and Worst Dating Apps in 2024 Ranked By Reviews.

To continue reading the Q&A session, please click here.