Vera Bradley, Inc.

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Vera Bradley Second Quarter Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for questions. As a reminder, today's conference call is being recorded. I would now like to turn the call over to Mr. Mark Deli, Vera Bradley's Chief Administrative Officer. Please go ahead.

Good morning and welcome, everyone. We'd like to thank you for joining us for Vera Bradley's earnings call. Some of the statements made during our prepared remarks and in response to your questions may constitute forward-looking statements made pursuant to and within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 as amended. Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from those that we expect. Please refer to today's press release and the company's most recent form, 10-K, filed with the SEC for a discussion of known risks and uncertainties. Investors should not assume that the statements made during the call will remain operative at a later time. We undertake no obligation to update any information discussed on today's call. I will now turn the call over to Vera Bradley's CEO, Rob Wallstrom. Rob?

Thank you, Mark. Good morning, everyone, and thank you for joining us on today's call. John Enright, our CFO, also joins me today. We posted a consolidated year-over-year second quarter revenue increase of nearly 12%. On a comp basis, Vera Bradley was essentially back to its pre-pandemic fiscal 2020 second quarter revenue level, and Pura Vida was up nearly 7% over the second quarter of fiscal 2020. Second quarter Vera Bradley brand revenues continued to improve as customers responded to product innovation, stores were fully operational, and sales of travel-related products rebounded, despite anniversary and exceptionally strong mass sales from the prior year. However, we experienced two major factors that negatively impacted our results. First, the Apple iOS 14.5 update negatively affected Pura Vida's revenues, primarily due to the impact it had on the effectiveness of Facebook and Instagram advertising. The Facebook and Instagram platforms have been our primary marketing vehicles to drive sales, and Pura Vida has maintained a market-leading position, consistently ranking as the number one engaged brand in the jewelry category on Instagram. Our team is working diligently to quickly diversify a portion of our marketing resources to other platforms, and consequently, we began to see Pura Vida DTC sales volume build momentum throughout the balance of the second quarter and into the beginning of the third. We expect Pura Vida revenues will return to a 15% to 20% growth rate in the second half of the year. Second, Like much of the industry, Vera Bradley continued to experience supply chain challenges and significantly increased freight and tariff expenses that put meaningful pressure on gross margin in the quarter. We expect these pressures to continue for the moderate term. We were able to continue to diligently manage our SG&A expenses and our balance sheet, and cash flow remains strong. With our strong first quarter performance, fiscal 2022 is off to a solid start with year-to-date earnings well ahead of last year and ahead of where we were in fiscal 2020 pre-pandemic. We realize we will continue to face certain headwinds and uncertainties for the balance of the year, but we also know that both our lifestyle brands have significant long-term growth opportunities, well beyond their core product categories. We are on track and remain committed to our vision to be a purpose-driven, multi-lifestyle brand, high-growth company. Now let me turn the call over to John to discuss the financials. Thanks, Rob, and good morning.