What they do
Vera Bradley, based in Roanoke, Indiana, near Fort Wayne, designs and sells women's handbags, luggage, travel items and accessories in its quilted cotton prints, through its own stores and websites and through specialty retailers.
Why we picked it
- 01+9.2%
Comparable sales have turned positive. They rose 13.4% in the quarter to 2 May 2026 and 9.2% in the quarter to 1 Aug (e-commerce +16.2%, stores +4.1%), after falls of 25.0% and 17.3% in the same quarters a year earlier. The company calls it the second consecutive quarter of positive comparable results and of revenue growth.
- 02$34.2M
The balance sheet has been repaired. At 1 Aug 2026 the company held $34.2M of cash and no debt, against $15.2M of cash and $10.0M of revolver debt a year earlier, and inventory was down 28% to $69.3M. The $75M credit line was undrawn, with $54.3M available, and the company owns its Roanoke headquarters and distribution center.
- 03$265K
Insiders are buying with their own money. CEO Ian Bickley bought 28,901 shares at $3.87 and director Andrew Meslow, former CEO of Bath & Body Works, bought 24,926 at $3.73 on 12 Jun. Director Ivan Brockman bought 2,500 shares at $4.00 on 25 Sep and 10,000 at $5.02 on 6 Oct. That is about $265K from three buyers in four months, and no insider has sold in the open market since April.
- 04$1.0M
Losses are shrinking. Non-GAAP operating income for the six months to 1 Aug was $1.0M, against a $14.2M loss a year earlier, though it includes a $7.7M tariff refund; without the refund the loss would be about $6.7M, roughly half of last year's. In June management raised its full-year target to at least a 50% improvement on last year's $21.7M non-GAAP operating loss, and repeated it in September.
The risk
The catch: part of the improvement will not repeat, and sales guidance is cautious. The quarter to 1 Aug included a $7.7M tariff refund the company says will not come again, and full-year sales guidance of $255M to $270M, held in September, implies second-half sales down about 3% to 13% from last year's $147.1M. The comparable sales gains also come against a collapsed base, and most of the last twelve months' operating cash flow came from cutting inventory, which is already down 28%.
The full analysis
Vera Bradley ($VRA): sales have turned, the debt is gone, and insiders are buying
Our view: bullish, because comparable sales have turned positive for two quarters in a row after years of falling sales, the company has paid off its debt and holds $34.2M of cash, and the CEO and two directors have been buying stock in the open market.
The thesis
Vera Bradley designs and sells women's handbags, luggage, travel items and accessories in its quilted cotton prints, through its own stores and websites and through specialty retailers. Sales fell for years, and a new team, led by CEO Ian Bickley, has cut inventory, cleared the debt and pulled back from liquidation sales. We think the last two quarters show that the brand still sells, and that the balance sheet now gives the turnaround time to work.
The evidence
Comparable sales have turned positive. They rose 13.4% in the quarter to 2 May 2026 and 9.2% in the quarter to 1 Aug, after falls of 25.0% and 17.3% in the same quarters a year earlier. In the latest quarter e-commerce rose 16.2% and stores 4.1% (10-Qs, Jun and Sep 2026). The company calls it the second consecutive quarter of positive comparable results and of revenue growth (Q2 release, 15 Sep 2026).
The balance sheet has been repaired. At 1 Aug 2026 the company held $34.2M of cash and no debt, against $15.2M of cash and $10.0M of revolver debt a year earlier. Inventory was down 28% to $69.3M from $96.7M. The $75M credit line was undrawn, with $54.3M available, and the company owns its headquarters and distribution center in Roanoke, Indiana (10-Q, Sep 2026; 10-K, Mar 2026).
Insiders are buying with their own money. CEO Ian Bickley bought 28,901 shares at $3.87 and director Andrew Meslow, the former CEO of Bath & Body Works, bought 24,926 at $3.73 on 12 Jun. Director Ivan Brockman bought 2,500 shares at $4.00 on 25 Sep and 10,000 at $5.02 on 6 Oct. That is about $265K from three buyers in four months, and no insider has sold in the open market since April (Forms 4). Directors and officers own 14.3% of the company (proxy, Apr 2026).
Losses are shrinking. Non-GAAP operating income for the six months to 1 Aug was $1.0M, against a $14.2M loss a year earlier (Q2 release). In June management raised its full-year target to at least a 50% improvement on last year's $21.7M non-GAAP operating loss, and it repeated that target in September.
What the market is missing
At $5.85 the market value is $167.8M. Take out the $34.2M of cash and the business is valued at about $134M, roughly half of its $274.5M of sales over the last twelve months, with no debt and owned real estate. The insider buying came after the first positive quarter and continued after the second, a sign that the people closest to the numbers expect more.
The risks
Part of the improvement will not repeat. The quarter to 1 Aug included a $7.7M tariff refund in cost of goods sold, and the company says it expects no more refunds, so without it the six-month non-GAAP operating result was a loss of about $6.7M, roughly half of last year's. Full-year sales guidance of $255M to $270M, held in September, implies second-half sales of about $128M to $143M, down about 3% to 13% from last year's $147.1M. The comparable sales gains come against a collapsed base, and most of the last twelve months' operating cash flow came from cutting inventory, which is already down 28% and cannot fall much further.
What would change our mind
Comparable sales turning negative again in the holiday quarter, the full-year sales or operating loss guidance coming down at the third-quarter report in December, or the company drawing on its credit line.
Sources: Vera Bradley Q2 FY2027 results release and 10-Q (15 Sep 2026); Q1 FY2027 results release and 10-Q (11 Jun 2026); 10-K (27 Mar 2026); quarterly 10-Qs and results releases, Mar 2025 to Mar 2026; Forms 4 (16 Jun, 29 Sep and 7 Oct 2026); proxy statement (24 Apr 2026); close from Yahoo Finance and Nasdaq, 16 Oct 2026.
By the numbers
| Quarter | Revenue | Gross margin | Net income | Cash | Debt | Diluted shares | Filing |
|---|---|---|---|---|---|---|---|
| Q3 261 August 2026 | $71.6M | 59.8% | $4.5M | $34.2M | n/a | 30.0M | 10-Q, 15 September 2026 |
| Q2 262 May 2026 | $55.7M | 51.8% | -$4.8M | $12.5M | n/a | 28.1M | 10-Q, 11 June 2026 |
| Q1 2631 January 2026 | $84.9M | 47.8% | $2.7M | $18.5M | n/a | n/a | 10-K, 27 March 2026 |
| Q4 251 November 2025 | $62.3M | 42.1% | -$12.4M | $10.7M | $10.0M | 27.9M | 10-K, 27 March 2026 |
| Q3 252 August 2025 | $70.9M | 50.1% | -$4.7M | $15.2M | $10.0M | 27.9M | 10-Q, 15 September 2026 |
| Q2 253 May 2025 | $51.7M | 44.1% | -$33.5M | $11.3M | n/a | 27.8M | 10-Q, 11 June 2026 |
| Q1 251 February 2025 | $86.4M | 45.9% | -$47.0M | $28.6M | $0 | n/a | 10-K, 27 March 2026 |
| Q4 242 November 2024 | $70.5M | 54.5% | -$12.8M | $13.7M | n/a | 28.1M | 10-K, 27 March 2026 |
Source: the company's 10-Q and 10-K filings on SEC EDGAR, as tagged in their XBRL data. Each quarter uses the most recent filing that reports it, so restated quarters compare cleanly. Quarters are labelled by the calendar quarter they end in. Debt is current plus long-term debt; net income is as reported, including any discontinued operations. n/a: not reported for that quarter on its own.
Insiders
Directors and executive officers as a group (11 persons) own 14.3% of the shares (mostly director Robert J. Hall's family-trust shares (10.3%); founding Miller family a further 10.7% outside the board), according to the DEF 14A 2026 filed 24 April 2026, as of 8 April 2026.
| Date | Who | Shares bought | Price | Value | Filing |
|---|---|---|---|---|---|
| 6 October 2026 | Ivan BrockmanDirector | 10,000 | $5.02 | $50K | Form 4 |
| 25 September 2026 | Ivan BrockmanDirector | 2,500 | $4.00 | $10K | Form 4 |
| 12 June 2026 | Ian BickleyChief Executive Officer | 28,901 | $3.87 | $112K | Form 4 |
| 12 June 2026 | Andrew MeslowDirector | 24,926 | $3.73 | $93K | Form 4 |
| 15 December 2025 | Andrew MeslowDirector | 50,000 | $1.93 | $96K | Form 4 |
| 12 December 2025 | Andrew MeslowDirector | 250,000 | $1.98 | $494K | Form 4 |
| 12 December 2025 | Ian BickleyDirector | 53,000 | $1.94 | $103K | Form 4 |
Open-market purchases (Form 4, transaction code P) over the last twelve months. Sales, grants and option exercises are not shown.
What to watch
- Early to mid December 2026
Third-quarter results for the quarter ending 31 Oct 2026, the first full quarter after the $7.7M tariff refund. The date is not announced; last year's came on 11 Dec 2025. Q3 FY2026 results release (11 Dec 2025); Q2 FY2027 release (15 Sep 2026)
- Year ending 30 Jan 2027
The holiday quarter, against full-year guidance of $255M to $270M of sales and a non-GAAP operating loss at least 50% smaller than last year's $21.7M. Q1 FY2027 results release (11 Jun 2026); Q2 FY2027 release (15 Sep 2026)
Sources: Q2 FY2027 results release and 10-Q (15 Sep 2026), Forms 4 (Jun to Oct 2026), close 16 Oct 2026.
Market value: shares outstanding on the latest SEC filing cover page, times the latest price.