# Vera Bradley, Inc.: Form 10-Q for the period ended Aug 1, 2026

- Company: [Vera Bradley, Inc.](/companies/vra.md) (CIK 1495320)
- Form: 10-Q
- Filed: 2026-09-15
- Accepted by EDGAR: Sep 15, 2026, 18:59 ET
- Period: 2026-08-01
- Accession: 0001628280-26-062019
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1495320/000162828026062019/vra-20260801.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1495320/000162828026062019/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2026-08-01.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2026-05-03 to 2026-08-01 | $71.6m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2026-02-01 to 2026-08-01 | $127.4m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2026-05-03 to 2026-08-01 | $28.8m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 6 months, 2026-02-01 to 2026-08-01 | $55.7m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2026-05-03 to 2026-08-01 | $42.8m | us-gaap:GrossProfit |
| Gross profit | 6 months, 2026-02-01 to 2026-08-01 | $71.6m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2026-05-03 to 2026-08-01 | $38.7m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2026-02-01 to 2026-08-01 | $72.9m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2026-05-03 to 2026-08-01 | $4.2m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2026-02-01 to 2026-08-01 | −$468.0k | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2026-05-03 to 2026-08-01 | −$93.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2026-02-01 to 2026-08-01 | $19.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2026-05-03 to 2026-08-01 | $4.5m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2026-02-01 to 2026-08-01 | −$325.0k | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2026-05-03 to 2026-08-01 | $0.15 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2026-02-01 to 2026-08-01 | −$0.01 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2026-05-03 to 2026-08-01 | $0.16 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2026-02-01 to 2026-08-01 | −$0.01 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2026-05-03 to 2026-08-01 | 30,004,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2026-02-01 to 2026-08-01 | 28,337,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2026-02-01 to 2026-08-01 | $17.7m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2026-02-01 to 2026-08-01 | $1.0m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2026-08-01 | $34.2m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2026-08-01 | $125.8m | us-gaap:AssetsCurrent |
| Total assets | at 2026-08-01 | $239.3m | us-gaap:Assets |
| Current liabilities | at 2026-08-01 | $51.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2026-08-01 | $106.9m | us-gaap:Liabilities |
| Shareholders' equity | at 2026-08-01 | $132.3m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 33,811 characters.

The following discussion summarizes the significant factors affecting the condensed consolidated operating results, financial condition, liquidity, and cash flows of the Company as of and for the thirteen and twenty-six weeks ended August 1, 2026 and August 2, 2025. The following discussion should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended January 31, 2026, and our unaudited condensed consolidated financial statements and the related notes included in Item 1 of this Quarterly Report. The results of operations for the thirteen and twenty-six weeks ended August 1, 2026, are not necessarily indicative of the results to be expected for the full fiscal year.

### Strategic Progress, Macroeconomic Factors, and Other Factors Impacting our Financial Condition and Results of Operations

*Strategic Progress.* We are continuing execution of Project Sunshine, a comprehensive strategy to strengthen our market position by tapping into our brand’s strong emotional connection with consumers. We are simplifying decision-making, removing organizational complexity, and focusing resources on high-impact initiatives. This operational focus, paired with prudent cost management, will allow us to invest in the brand, innovation, and customer experiences, all while driving shareholder value. These improvements are about agility — building a responsive organization to fully leverage our unique brand position.

The five key initiatives of Project Sunshine are:

Sharpening Our Brand Focus: We are restoring Vera Bradley’s distinctive, joyful brand positioning by strengthening product, emphasis on social-first marketing, storytelling, and partnering selectively across wholesale and IP to rebuild relevance and demand.

Resetting Our Go-to-Market Model: We are rebuilding our commercial engine with sharper hero product focus, disciplined pricing and promotions, improved inventory planning, and integrated, insight-led execution across channels.

Rewiring the Digital Ecosystem: We are integrating our digital commerce platforms to create a seamless customer journey, supported by enhanced site functionality, data-driven decisions, and improved conversion and profitability.

Outlet 2.0: We are transforming our outlet channel from discount driven to a curated, brand-building smart-value experience that is delivering higher sales, conversion, and profitability.

Reimagining How We Work: We are streamlining the organization while investing in critical talent and capabilities to create a more agile, future-fit company positioned for sustainable long-term growth.

*Macroeconomic and Other Factors.* We continue to closely monitor the dynamic economic landscape and are actively managing the impact of changing tariff costs. While ongoing inflationary pressures and related macroeconomic factors continue to influence consumer discretionary spending, our business has demonstrated resilience to start the fiscal year. We delivered a strong start to fiscal 2027 and remain focused on executing our strategic initiatives and adapting to current market conditions to support sustained long-term growth.

### Management Transition

In June 2025, the Company announced the departure of its former Chief Executive Officer (“CEO”), Jacqueline Ardrey. In March 2026, Board member Ian Bickley was appointed permanent Chairman and Chief Executive Officer after serving as our Interim CEO since July 2025. Martin Layding was named Chief Financial Officer in June 2025 and was promoted to also serve as the Chief Operating Officer in March 2026.

### Recent Transactions

The sale of Pura Vida was completed on March 31, 2025. See Note 13 to the Notes to the Condensed Consolidated Financial Statements herein for additional information. The loss on sale was presented as part of results of the discontinued operations. We have reflected the results of operations of the Pura Vida business as discontinued operations in the Consolidated Statement of Operations. This business was historically presented as its own reporting unit.

### How We Assess the Performance of Our Business

In assessing the performance of our business, we consider a variety of performance and financial measures.

#### Net Revenues

Net revenues reflect sales of our merchandise and revenue from distribution and shipping and handling fees, less returns and discounts. Revenues for the Direct segment reflect sales through full-line and outlet stores; e-commerce sites (verabradley.com, verabradleyoutlet.com, and international.verabradley.com); direct to consumer marketplaces; and typically the Vera Bradley annual outlet sale. Revenues for the Indirect segment reflect sales of Vera Bradley-branded products to specialty retail partners; key accounts consisting of department stores, national accounts, and third-party inventory liquidators; and royalties recognized through licensing agreements related to the Vera Bradley brand.

#### Comparable Sales

Comparable sales are calculated based upon our stores that have been open for at least 12 full fiscal months and net revenues from our e-commerce operations. Remodeled stores are included in both comparable sales and comparable store sales unless the store was closed for more than one week of the current or comparable prior period, in which case the non-comparable temporary closure periods are not included, or the remodel resulted in a significant change in square footage. Some of our competitors and other retailers calculate comparable or “same store” sales differently than we do. As a result, data in this report regarding our comparable sales and comparable store sales may not be comparable to similar data made available by other companies. Non-comparable sales include sales from stores not included in comparable sales or comparable store sales.

Measuring the change in year-over-year comparable sales allows us and our investors to evaluate how our store base and e-commerce operations are performing. Various factors affect our comparable sales, including:

- Overall economic trends;
- Consumer preferences and fashion trends;
- Competition;
- The timing of our releases of new patterns and collections;
- Changes in our product mix;
- Pricing, as well as timing and level of promotions;
- Amount of store, mall, and e-commerce traffic;
- The level of customer service that we provide in stores and to our on-line customers;
- Our ability to source and distribute products efficiently;
- The number of stores we open and close in any period; and
- The timing and success of promotional and marketing efforts.

#### Gross Profit

Gross profit is equal to our net revenues less our cost of sales. Cost of sales includes the direct cost of purchased merchandise, distribution center costs, operations overhead, duties, all inbound freight costs incurred, and inventory adjustments, if any. The components of our reported cost of sales may not be comparable to those of other retail and wholesale companies.

Gross profit can be impacted by changes in volume; fluctuations in sales price; inbound freight and other logistical costs; outbound freight; operational efficiencies, such as leveraging of fixed costs; promotional activities, including free shipping; commodity prices, such as for cotton; tariffs; and labor costs.

#### Selling, General, and Administrative Expenses (“SG&A”)

SG&A expenses include selling; advertising, marketing, and product development; and administrative expenses. Selling expenses include:

- Direct business expenses, such as store expenses, employee compensation, and store occupancy and supply costs;
- Indirect business expenses consisting primarily of employee compensation and other expenses associated with sales to Indirect retailers; and

Advertising, marketing, and product development expenses include employee compensation, media costs, creative production expenses, marketing agency fees, new product design costs, public relations expenses, and market research expenses. Administrative expenses include employee compensation for corporate functions, corporate headquarters occupancy costs, consulting and software expenses, and charitable donations, as well as severance charges and consulting fees associated with cost savings initiatives disclosed in Note 11 to the Notes to the Condensed Consolidated Financial Statements herein.

### Results of Operations

The following tables summarize key components of our condensed consolidated results of operations for the periods indicated, both in dollars and as a percentage of our net revenues ($ in thousands):

| Statement of Operations Data: | Thirteen Weeks Ended August 1, 2026 | August 2, 2025 | Twenty-Six Weeks Ended August 1, 2026 | August 2, 2025 |
| --- | ---: | ---: | ---: | ---: |
| Net revenues | $71,649 | $70,858 | $127,351 | $122,510 |
| Cost of sales | 28,835 | 35,361 | 55,706 | 64,246 |
| Gross profit | 42,814 | 35,497 | 71,645 | 58,264 |
| Selling, general, and administrative expenses | 38,747 | 40,442 | 72,875 | 81,246 |
| Other income, net | 113 | 353 | 762 | 533 |
| Operating income (loss) from continuing operations | 4,180 | (4,592) | (468) | (22,449) |
| Interest income (expense), net | 227 | (134) | 162 | (130) |
| Income (loss) from continuing operations before income taxes | 4,407 | (4,726) | (306) | (22,579) |
| Income tax (benefit) expense | (93) | (17) | 19 | 390 |
| Net income (loss) from continuing operations | $4,500 | $(4,709) | $(325) | $(22,969) |
| **Percentage of Net Revenues:** |  |  |  |  |
| Net revenues | 100.0% | 100.0% | 100.0% | 100.0% |
| Cost of sales | 40.2% | 49.9% | 43.7% | 52.4% |
| Gross profit | 59.8% | 50.1% | 56.3% | 47.6% |
| Selling, general, and administrative expenses | 54.1% | 57.1% | 57.2% | 66.3% |
| Other income, net | 0.2% | 0.5% | 0.6% | 0.4% |
| Operating income (loss) from continuing operations | 5.8% | (6.5)% | (0.3)% | (18.3)% |
| Interest income (expense), net | 0.3% | (0.2)% | 0.1% | (0.1)% |
| Income (loss) from continuing operations before income taxes | 6.2% | (6.7)% | (0.2)% | (18.4)% |
| Income tax (benefit) expense | (0.1)% | —% | —% | 0.3% |
| Net income (loss) from continuing operations | 6.3% | (6.7)% | (0.2)% | (18.7)% |

27

The following tables present net revenues and operating income (loss) by operating segment, both in dollars and as a percentage of associated net revenues, and store data for the periods indicated ($ in thousands, except as otherwise indicated):

| Net Revenues by Segment: | Thirteen Weeks Ended August 1, 2026 | August 2, 2025 | Twenty-Six Weeks Ended August 1, 2026 | August 2, 2025 |
| --- | ---: | ---: | ---: | ---: |
| Direct | $65,377 | $60,514 | $110,230 | $103,597 |
| Indirect | 6,272 | 10,344 | 17,121 | 18,913 |
| Total | $71,649 | $70,858 | $127,351 | $122,510 |
| **Percentage of Net Revenues by Segment:** |  |  |  |  |
| Direct | 91.2% | 85.4% | 86.6% | 84.6% |
| Indirect | 8.8% | 14.6% | 13.4% | 15.4% |
| Total | 100.0% | 100.0% | 100.0% | 100.0% |

| Operating Income (Loss) by Segment: | Thirteen Weeks Ended August 1, 2026 | August 2, 2025 | Twenty-Six Weeks Ended August 1, 2026 | August 2, 2025 |
| --- | ---: | ---: | ---: | ---: |
| Direct | $16,682 | $9,335 | $19,789 | $3,799 |
| Indirect | 2,978 | 2,190 | 6,987 | 4,170 |
| Less: Corporate unallocated | (15,480) | (16,117) | (27,244) | (30,418) |
| Total | $4,180 | $(4,592) | $(468) | $(22,449) |
| **Operating Income (Loss) as a Percentage of Net Revenues by Segment:** |  |  |  |  |
| Direct | 25.5% | 15.4% | 18.0% | 3.7% |
| Indirect | 47.5% | 21.2% | 40.8% | 22.0% |
| **Vera Bradley Store Data (1):** |  |  |  |  |
| Total stores opened during period | — | — | — | 2 |
| Total stores closed during period | — | (8) | (3) | (10) |
| Total stores open at end of period | 112 | 118 | 112 | 118 |
| Total gross square footage at end of period | 354,709 | 365,512 | 354,709 | 365,512 |
| Average net revenues per gross square foot (2) | $101 | $98 | $166 | $158 |
| Comparable sales (including e-commerce) increase (decrease) (3) | 9.2% | (17.3)% | 10.9% | (20.5)% |

(1) Includes Vera Bradley full-line and outlet stores.

(2) Dollars not in thousands. Average net revenues per gross square foot are calculated by dividing total net revenues for our stores that have been open at least 12 full fiscal months as of the end of the period by total gross square footage for those stores. Remodeled stores are included in average net revenues per gross square foot unless the store was closed for a portion of the period.

(3) Comparable sales are calculated based upon stores that have been open for at least 12 full fiscal months and net revenues from e-commerce operations. Comparable sales increase (decrease) is reported as a percentage of the comparable sales for the same period in the prior fiscal year. Remodeled stores are included in comparable sales unless the store was closed for a portion of the current or comparable prior period, in which case the non-comparable temporary closure periods are not included, or the remodel resulted in a significant change in square footage.

### Thirteen Weeks Ended August 1, 2026, Compared to Thirteen Weeks Ended August 2, 2025

#### Net Revenues

For the thirteen weeks ended August 1, 2026, net revenues increased $0.8 million, or 1.1%, to $71.6 million, from $70.9 million in the comparable prior-year period.

*Direct.* For the thirteen weeks ended August 1, 2026, net revenues in the Direct segment increased $4.9 million, or 8.0%, to $65.4 million, from $60.5 million in the comparable prior-year period. Vera Bradley comparable sales increased 9.2%, which includes a 4.1% increase in comparable store sales as well as an increase in e-commerce sales of 16.2%.

*Indirect.* For the thirteen weeks ended August 1, 2026, net revenues in the Indirect segment decreased $4.1 million, or 39.4%, to $6.3 million, from $10.3 million in the comparable prior-year period. The decrease was primarily due to strategic shift and timing related to our marketplace strategy.

#### Gross Profit

For the thirteen weeks ended August 1, 2026, gross profit increased $7.3 million, or 20.6%, to $42.8 million, from $35.5 million in the comparable prior-year period. As a percentage of net revenues, gross profit increased to 59.8% for the thirteen weeks ended August 1, 2026, from 50.1% in the comparable prior-year period. The year-over-year margin rate improvement was primarily driven by tariff refunds of $7.7 million partially offset by margin pressure to sell through Project Restoration product.

#### Selling, General, and Administrative Expenses

For the thirteen weeks ended August 1, 2026, SG&A expenses decreased $1.7 million, or 4.2%, to $38.7 million, from $40.4 million in the comparable prior-year period. As a percentage of net revenues, SG&A expenses decreased to 54.1% for the thirteen weeks ended August 1, 2026, from 57.1% in the comparable prior-year period. For the thirteen weeks ended August 1, 2026, consolidated SG&A expenses decreased primarily due to a $4.0 million reduction in advertising costs driven by cost optimization efforts, including the reduction and phasing of advertising spend. This decrease was partially offset by $1.1 million in higher employee-related costs, primarily reflecting increased variable compensation, net of lower severance costs, as well as $0.7 million in higher professional fees and $0.5 million in other expenses.

#### Other Income, Net

For the thirteen weeks ended August 1, 2026, net other income decreased $0.3 million to $0.1 million, from $0.4 million in the comparable prior-year period. The decrease in net other income was primarily due to prior-year income from the TSA resulting from the sale of Creative Genius.

#### Operating Income (Loss) from Continuing Operations

For the thirteen weeks ended August 1, 2026, operating income from continuing operations increased $8.8 million, or 191.0%, to $4.2 million, from a loss of $(4.6) million in the comparable prior-year period. As a percentage of net revenues, operating income (loss) from continuing operations was 5.8% and (6.5)% for the thirteen weeks ended August 1, 2026 and August 2, 2025, respectively. Operating income from continuing operations increased due to the factors described above.

*Direct.* For the thirteen weeks ended August 1, 2026, operating income in the Direct segment increased $7.3 million, or 78.7%, to $16.7 million, from $9.3 million in the comparable prior-year period. As a percentage of Direct segment net revenues, operating income in the Direct segment was 25.5% and 15.4% for the thirteen weeks ended August 1, 2026 and August 2, 2025, respectively. The increase in operating income as a percentage of Direct segment net revenues was primarily due to the tariff refund discussed earlier, as well as improved SG&A expense leverage.

*Indirect.* For the thirteen weeks ended August 1, 2026, operating income in the Indirect segment increased $0.8 million, or 36.0%, to $3.0 million from $2.2 million in the comparable prior-year period. As a percentage of Indirect segment net revenues, operating income in the Indirect segment was 47.5% and 21.2% for the thirteen weeks ended August 1, 2026 and August 2, 2025, respectively. The increase in operating income as a percentage of Indirect segment net revenues was primarily due to the tariff refund previously discussed, which partially offset the impact of the sales decline, as well as lower overall SG&A expenses in the segment.

*Unallocated.* For the thirteen weeks ended August 1, 2026, unallocated expenses decreased $0.6 million, or 4.0%, to $15.5 million from $16.1 million in the comparable prior-year period. The decrease in unallocated expenses was primarily due to a $1.9 million reduction in advertising costs driven by cost optimization efforts, including the reduction and phasing of advertising spend throughout the year. This decrease was partially offset by $0.4 million in higher employee-related costs, primarily reflecting increased variable compensation, net of lower severance costs, and $0.9 million in other expenses, net of other income.

#### Interest Expense, Net

For the thirteen weeks ended August 1, 2026, interest income increased $0.3 million, to $0.2 million from $(0.1) million in the comparable prior-year period.

#### Income Tax Expense

The effective tax rate for the thirteen weeks ended August 1, 2026, was (2.1)%, compared to 0.4% for the thirteen weeks ended August 2, 2025. See Note 7 "Income Taxes" of the Notes to the Condensed Consolidated Financial Statements for additional information about the Company's interim provision for income taxes.

#### Net Income (Loss) from Continuing Operations

For the thirteen weeks ended August 1, 2026, net income (loss) from continuing operations was $4.5 million, a $9.2 million increase from $(4.7) million in the comparable prior-year period due to the factors described above.

### Twenty-Six Weeks Ended August 1, 2026, Compared to Twenty-Six Weeks Ended August 2, 2025

#### Net Revenues

For the twenty-six weeks ended August 1, 2026, net revenues increased $4.8 million, or 4.0%, to $127.4 million, from $122.5 million in the comparable prior-year period.

*Direct.* For the twenty-six weeks ended August 1, 2026, net revenues in the Direct segment increased $6.6 million, or 6.4%, to $110.2 million, from $103.6 million in the comparable prior-year period. Vera Bradley comparable sales increased 10.9%, which includes a 6.9% increase in comparable store sales as well as an increase in e-commerce sales of 15.9%. In addition, non-comparable revenue decreased $4.1 million, primarily attributable to not hosting the Vera Bradley annual outlet sale in the current year period. The increase in net revenues was primarily driven by strong e-commerce performance, including favorable customer response to our IP collections featuring Disney characters, Peanuts, and other licensed collections.

*Indirect.* For the twenty-six weeks ended August 1, 2026, net revenues in the Indirect segment decreased $1.8 million, or 9.5%, to $17.1 million, from $18.9 million in the comparable prior-year period. The decrease was primarily due to strategic shift and timing related to our marketplace strategy.

#### Gross Profit

For the twenty-six weeks ended August 1, 2026, gross profit increased $13.4 million, or 23.0%, to $71.6 million, from $58.3 million in the comparable prior-year period. As a percentage of net revenues, gross profit increased to 56.3% for the twenty-six weeks ended August 1, 2026, from 47.6% in the comparable prior-year period. The year-over-year margin rate improvement was driven by $7.7 million of favorable tariff impact, favorable sales mix and lower freight and duty costs in the current year period, as well as reduction in costs related to inventory write-offs associated with the sale of Pura Vida, purchase order cancellation fees, and professional fees from the prior-year period.

#### Selling, General, and Administrative Expenses

For the twenty-six weeks ended August 1, 2026, SG&A expenses decreased $8.4 million, or 10.3%, to $72.9 million, from $81.2 million in the comparable prior-year period. As a percentage of net revenues, SG&A expenses decreased to 57.2% for the twenty-six weeks ended August 1, 2026, from 66.3% in the comparable prior-year period. For the twenty-six weeks ended August 1, 2026, consolidated SG&A expenses decreased primarily due to a $6.8 million reduction in advertising costs driven by cost optimization efforts, including the reduction and phasing of advertising spend throughout the year, a $1.0 million impairment charge in the prior-year, and $0.8 million in lower other expenses, partially offset by $0.2 million in higher employee-related costs.

#### Other Income, Net

For the twenty-six weeks ended August 1, 2026, other income, net increased $0.3 million to $0.8 million, from $0.5 million in the comparable prior-year period. The increase in net other income was primarily due to an insurance settlement in the current year.

#### Operating Loss from Continuing Operations

For the twenty-six weeks ended August 1, 2026, operating loss from continuing operations decreased $22.0 million, or 97.9%, to $(0.5) million, from $(22.4) million in the comparable prior-year period. As a percentage of net revenues, operating loss from continuing operations was (0.3)% and (18.3)% for the twenty-six weeks ended August 1, 2026 and August 2, 2025, respectively. Operating loss from continuing operations decreased due to the factors described above.

*Direct.* For the twenty-six weeks ended August 1, 2026, operating income in the Direct segment increased $16.0 million, or 420.9%, to $19.8 million, from $3.8 million in the comparable prior-year period. As a percentage of Direct segment net revenues, operating income in the Direct segment was 18.0% and 3.7% for the twenty-six weeks ended August 1, 2026 and

August 2, 2025, respectively. The increase in operating income as a percentage of Direct segment net revenues was primarily due to the tariff refund discussed earlier, as well as improved SG&A expense leverage.

*Indirect.* For the twenty-six weeks ended August 1, 2026, operating income in the Indirect segment increased $2.8 million, or 67.6%, to $7.0 million from $4.2 million in the comparable prior-year period. As a percentage of Indirect segment net revenues, operating income in the Indirect segment was 40.8% and 22.0% for the twenty-six weeks ended August 1, 2026 and August 2, 2025, respectively. The increase in operating income as a percentage of Indirect segment net revenues was due to the tariff refund previously discussed, which partially offset the impact of the sales decline, as well as lower overall SG&A expenses in the segment.

*Unallocated.* For the twenty-six weeks ended August 1, 2026, unallocated expenses decreased $3.2 million, or 10.4%, to $27.2 million from $30.4 million in the comparable prior-year period. The decrease in unallocated expenses was primarily due to a $2.8 million reduction in advertising costs driven by cost optimization efforts, including the reduction and phasing of advertising spend throughout the year, and $0.5 million in lower other expenses, net of other income, partially offset by $0.1 million in higher employee-related costs.

#### Interest Expense, Net

For the twenty-six weeks ended August 1, 2026, interest income increased $0.3 million, to $0.2 million from $(0.1) million in the comparable prior-year period.

#### Income Tax Expense

The effective tax rate for the twenty-six weeks ended August 1, 2026, was (6.2)%, compared to (1.7)% for the twenty-six weeks ended August 2, 2025. See Note 7 "Income Taxes" of the Notes to the Condensed Consolidated Financial Statements for additional information about the Company's interim provision for income taxes.

#### Net Loss from Continuing Operations

For the twenty-six weeks ended August 1, 2026, there was a net loss from continuing operations of $(0.3) million, a $22.6 million decrease, from $(23.0) million in the comparable prior-year period due to the factors described above.

### Liquidity and Capital Resources

#### General

Our primary sources of liquidity are cash on hand and cash equivalents, as well as cash flow from operations. We also have access to additional liquidity, if needed, through borrowings under our $75.0 million asset-based revolving credit agreement (the “Credit Agreement”). Availability under the Credit Agreement is driven by a borrowing base comprised primarily of eligible accounts receivable and inventory, each subject to advance rates, eligibility criteria, and applicable reserves. As a result, borrowing capacity may fluctuate based on the level and quality of receivables and the composition and valuation of inventory. There was no debt outstanding under the Credit Agreement as of August 1, 2026. The Company also owns two real estate properties that are unencumbered, which provide additional financial flexibility and may serve as a potential source of liquidity or collateral if needed. Historically, our primary cash needs have been for merchandise inventories; payroll; store rent; capital expenditures associated with operational equipment, buildings, information technology, and opening new stores; and share repurchases. The most significant components of our working capital are cash and cash equivalents, merchandise inventories, accounts receivable, accounts payable, and other current liabilities.

We believe that cash on hand and cash equivalents, cash flows from operating activities, and the availability of borrowings under our Credit Agreement or other financing arrangements will be sufficient to meet working capital requirements and anticipated capital expenditures, and other strategic uses of cash, if any, for the foreseeable future.

#### Cash Flow Analysis

A summary of operating, investing, and financing activities is shown in the following table (in thousands):

|  | Twenty-Six Weeks Ended August 1, 2026 | August 2, 2025 |
| --- | ---: | ---: |
| Net cash provided by (used in) operating activities | $17,721 | $(23,298) |
| Net cash (used in) investing activities | (1,038) | (1,576) |
| Net cash (used in) provided by financing activities | (930) | 9,800 |

#### Net Cash Provided by (Used in) Operating Activities

Net cash provided by (used in) operating activities consists primarily of net income (loss) adjusted for non-cash items, including depreciation, amortization, impairment charges, deferred taxes, stock-based compensation and the loss on sale of business; and the effect of changes in assets and liabilities.

Net cash provided by (used in) operating activities for the twenty-six weeks ended August 1, 2026 was $17.7 million, compared to $(23.3) million for the twenty-six weeks ended August 2, 2025. The increase in cash provided by operating activities was primarily attributable to a net loss of $(0.3) million, a $22.6 million improvement in net loss compared to the prior-year period, excluding the $15.2 million loss on the sale of a business recognized in the prior-year period. Operating cash flows also benefited from continued inventory management initiatives, which resulted in a $6.7 million source of cash from inventories during the current year period compared to a $4.9 million use of cash in the prior-year period and cash collected in payment of accounts receivable which resulted in a $4.3 million source of cash during the current year period compared to a $4.0 million use of cash in the prior-year period. These favorable impacts were partially offset by changes in cash paid for accounts payable which resulted in a $1.7 million use of cash during the current year period compared to a $2.8 million use of cash in the prior-year period.

#### Net Cash Used in Investing Activities

Investing activities consist primarily of investments and capital expenditures related to new store openings, buildings, operational equipment, and information technology investments.

Net cash used in investing activities was $1.0 million for the twenty-six weeks ended August 1, 2026, compared to $1.6 million for the twenty-six weeks ended August 2, 2025. The decrease in cash used in investing activities was primarily attributable to a decrease in property, plant, and equipment spending of $1.6 million in the current year period, partially offset by $1.0 million proceeds from the sale of Pura Vida recognized in the prior-year period.

#### Net Cash Provided by Financing Activities

Net cash used in financing activities was $0.9 million for the twenty-six weeks ended August 1, 2026, compared to net cash provided by financing activities of $9.8 million for the twenty-six weeks ended August 2, 2025. The decrease in cash (used in) provided by financing activities was primarily attributable to a $10 million ABL draw in the prior-year.

#### Credit Agreement

On September 7, 2018, Vera Bradley Designs, Inc. (“VBD”), a wholly-owned subsidiary of the Company, entered into an asset-based revolving Credit Agreement (the “Credit Agreement”) among VBD, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto. On March 11, 2025, certain subsidiaries of the Company, JPMorgan Chase Bank, N.A., as the administrative agent, and lenders from time to time party thereto, entered into a Fourth Amendment (the “Fourth Amendment”) to the Credit Agreement. The Credit Agreement provides for certain credit facilities to VBD in an aggregate principal amount not to initially exceed the lesser of $75.0 million or the amount of borrowing availability determined in accordance with a borrowing base of certain assets. Borrowings under the credit facilities are available to finance general corporate purposes of VBD and its subsidiaries, including but not limited to Vera Bradley International, LLC, and Vera Bradley Sales, LLC. The Credit Agreement also contains an option for VBD to arrange with lenders to increase the aggregate principal amount by up to $50.0 million.

On October 21, 2025, VBD amended the agreement to include, among other things, to: (i) permit the sale of certain real property assets without requiring the application of the proceeds from such sale to be used to repay amounts outstanding under the Credit Agreement, (ii) remove the prohibition against sale and leaseback transactions and (iii) increase the amount of Company assets permitted to be disposed of in any fiscal year outside the ordinary course of business from $5,000,000 to $10,000,000.

As of August 1, 2026 and January 31, 2026, the Company had no borrowings outstanding and availability of $54.3 million and $58.6 million, respectively, under the Credit Agreement, subject to the borrowing base provisions of the facility.

For further information regarding the Credit Agreement, please see Note 6 of the Notes to Condensed Consolidated Financial Statements herein.

### Material Cash Requirements

As of August 1, 2026, there were no material changes outside the ordinary course of business to material cash requirements, as disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026.

### Off-Balance-Sheet Arrangements

We do not have any off-balance-sheet financing or unconsolidated special-purpose entities.

### Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as the related disclosures of contingent assets and liabilities at the date of the financial statements. A summary of the Company’s significant accounting policies is included in Note 2 to the Company’s consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2026.

Certain accounting policies and estimates of the Company are considered critical, as these policies and estimates are the most important to the depiction of the Company’s consolidated financial statements and require significant, difficult, or complex judgments, often about the effect of matters that are inherently uncertain. Such policies are summarized in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2026. There were no significant changes to any of the critical accounting policies and estimates described in the Annual Report as of August 1, 2026.

### Recently Issued Accounting Pronouncements

Refer to Note 1 “Description of the Company and Basis of Presentation” within Item 1 “Financial Statements” of this Quarterly Report on Form 10-Q for a discussion of recently issued accounting pronouncements.

## Market risk

As filed, 233 characters.

As of August 1, 2026, there was no material change in the market risks described in “Quantitative and Qualitative Disclosures About Market Risks” in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2026.

## Controls and procedures

As filed, 897 characters.

At the end of the period covered by this Quarterly Report on Form 10-Q, the Company carried out an evaluation, under the supervision and with the participation of the Company’s Disclosure Committee and management, including the Chief Executive Officer and the Chief Operating & Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a-15 of the Securities Exchange Act of 1934. Based on that evaluation, the Chief Executive Officer and Chief Operating & Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of August 1, 2026.

There has been no change in our internal control over financial reporting during the most recent fiscal quarter that has materially affected, or that is reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 164 characters.

There have been no material changes to the risk factors previously set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2026.

Filed Sep 15, 2026.
Source: SEC EDGAR, the filing index for accession 0001628280-26-062019. Last ingested by Listed: Oct 24, 2026, 15:07 ET. No prices; not investment advice.