Vera Bradley, Inc.

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Vera Bradley First Quarter Conference Call for Fiscal 2024. 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 Mark DeLike. Vera Bradley's Chief Administrative Officer. Please go ahead.

Good morning and welcome, everyone. We'd like to thank you for joining us for today's call. Some of the statements made during our prepared remarks 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 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 would now like to turn the call over to Vera Bradley's CEO, Jackie Ardrey. Jackie?

Thank you, Mark. Good morning, and thank you for joining us on today's call. Today I'm joined by both John Enright, our departing CFO, and Michael Schwindel, our newly appointed CFO. Before we begin, I want to express my sincere thanks to John for his nine years of service to Vera Bradley and his many contributions to our company, and we wish him all the best in the future. And we welcome Michael Schwindel to our team, who joined the company on May 8th. He is a retail industry veteran with over 30 years of experience, including more than 15 years in CFO roles, delivering strong results through profit improvement and by providing innovative solutions. For the three years prior to joining our company, he served as CFO for accessory and jewelry retailer Claire's. Previously, he held CFO roles at specialty retailers Fleet Farm, Payless Shoe Source, Perry and David, and Musician's Friend, as well as other key financial roles at Home Depot and Limited Brands. You'll hear from both John and Michael later in today's call. Now, let me turn to the quarter. We are very pleased that meaningful growth margin expansion and diligent expense control led to a significant year-over-year improvement in bottom-line performance for the first quarter. On the revenue side, Vera Bradley factory stores experienced challenging traffic trends in March and April that led to weaker than expected performance for the quarter. This was partially offset, however, by several positive highlights in other areas of our business. First, we delivered our first positive quarterly revenue performance in five quarters at Pura Vida, primarily driven by non-comparable retail store sales. We also saw improved year-over-year sales trends in both our Pura Vida wholesale and e-commerce channels. Second, we delivered strong Vera Bradley e-commerce performance and solid Vera Bradley full-line store revenues. Vera Bradley indirect revenues declined as expected due to a non-recurring key account order that took place in last year's first quarter, but the underlying business remains healthy. We are building a collaborative team with the mindset of generating long-term revenue increases, expanding gross margin, and ensuring strong financial discipline and cost control, which we expect will drive long-term profitable growth. The team is working hard and taking strategic, proactive steps to steadily grow Pura Vida's revenues and to reverse the trends in Vera Bradley's factory channel through the expansion of successfully tested, targeted, targeted marketing programs designed to drive traffic and average order size. At Pura Vida, we have a solid organizational structure in place with newly promoted general manager, Sujay Shah, leading the team with heightened discipline and focus on day-to-day execution and driving business results. Sujay was Pura Vida's former VP of Finance and is leading the team to return the e-commerce business to growth through utilization of the newly launched comprehensive customer data platform, diversification of the marketing program, improving site navigation, and focusing on customer retention. On the product front, our custom bracelet program and new friendship packs are a big focus and are working, and we will continue to pursue high-profile collaborations like Sanrio, Harper Charms, and Crumble Cookies that are always fan favorites. The hard work on project restoration began in the first quarter, which is focused on four key pillars of the business for each brand, consumer, brand, product, and channel, to drive the long-term profitable growth we expect. To support project restoration and lay the foundation for our success, we made additional corporate changes and announced incremental cost reductions, including the elimination of approximately 25 corporate positions as part of an overall plan to further right-size the expense structure of the company. Of course, Michael Schwindel's track record of driving profitable growth, along with his passion for retail and operational excellence, will be instrumental as the company executes project restoration. We also made several organizational changes in the marketing, e-commerce, product design, and product development areas that flattened and streamlined the organizational structure to improve execution, make faster decisions, and provide support for the four pillars of project restoration. These most recent organizational changes and non-payroll expense reductions are expected to produce annualized savings of approximately $12 million on top of our fiscal 2023 cost reductions. Let me give you a bit more detail on project restoration's four key pillars and some of the initiatives we currently have underway. At Vera Bradley, For the consumer, we will focus on restoring brand relevancy, targeting casual and feminine 35- to 54-year-old women who value both fashion and function. For the brand, we will strategically market our distinctive and unique position as a feminine, fashionable brand that connects with consumers on a deep emotional level. For product, we will refocus on core categories and items we are best at, by innovating and expanding within our core products like travel and back to campus. We will elevate our colorful, feminine heritage, keeping it distinctive but more trend relevant through updated print and design. We will also innovate into strategic adjacent lifestyle item introductions that make sense for our customers. As part of this, travel and travel accessories perform strongly across all channels in the first quarter. and the travel category will continue to be a key focus of our go-forward assortment. Additionally, our performance fabrics are trending well across all channels, with a core customer being younger with a higher household income. This remains a big opportunity for us. Patterns will always be our signature, but coordinating solids continue to be a key opportunity for us as well. We will expand our solid collection this fall, including our foray back into a small collection of leather goods. Finally, product collaborations are still an important part of our brand expression. Our Winnie the Pooh capsule was a huge success. Our first Hello Kitty collaboration was just launched this month, and our NFL collection will be launched in August, just in time for football season. And then finally, for Channel, We will accelerate our digital first focus and online presence, build a balanced footprint that more clearly differentiates full line from factory stores, and target and or strengthen relationships with strategically aligned wholesale partners. As part of this, our recent site rebranding and navigation changes have been successful in reducing bounce rate and driving conversion and sales. So turning to Pura Vida, For the consumer, we will sharpen our focus on the carefree 18 to 24-year-old girl who both those younger and older aspire to be. For the brand, we will recenter our brand ethos on living life to the fullest with marketing authentically sharing real moments, places, and faces. Our Live Free campaign launched this month and will accentuate travel, adventure, friendship, and freedom, and will create engagement and excitement in our customer base for the entire summer. For product, we will focus 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. Some great examples of this are our new summer collection and our Harper Charms collection, which are both resonating with our customers. And then finally for channel, We will have a strong focus on restoring e-commerce growth, which I just talked about, and growth of wholesale by pursuing larger, more strategic partnerships and expanding larger existing accounts and refining our existing store model. Now, let me turn the call over to John to review the financial results. John?