The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Daniel Harriman - Sidoti & Company - Analyst
: Hey, good morning, Jackie. Good morning, Michael. Just a couple quick ones for me. On the first-quarter call, you highlighted consumer weakness,
but in particular, the lower income consumer, which had an impact in the outlet channel. Is that more or less what you're seeing thus far into the
third quarter, or is it more evenly spaced out across all income channels?
And then I was just wondering, Jackie, I know you mentioned you're going to provide more details on the third-quarter call, but if you could just
maybe expand a little bit upon some of the new wholesale partners that you've identified and hope to team up with in the future?
Question: Daniel Harriman - Sidoti & Company - Analyst
: Okay, great. Thank you all so much and I'll hop back in the queue.
Question: Doug Lane - Water Tower Research - Analyst
: Yeah, hi. Thanks and good morning, everybody. Good morning, Michael. I'm just looking at the cash flow statement, and your free cash flow was
negative in the first-half of the year and you're going to end up slightly positive. So you're optimistic about free cash flow generation in the
second-half of the year. Sticking on the first-half, the big swing I see is in inventories where it was a $15 million use this year, and last year it was a
$3 million source. Can you put some color around that?
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SEPTEMBER 11, 2024 / 1:30PM, VRA.OQ - Q2 2025 Vera Bradley Inc Earnings Call
Question: Doug Lane - Water Tower Research - Analyst
: So we can look at inventories as maybe a key area to be a source of cash in the back half of the year as it was a use of cash in the first half of the
year. Is that fair?
Question: Doug Lane - Water Tower Research - Analyst
: Okay. That's helpful. And business is difficult. You said that upfront, but your capital spending outlook hasn't changed, which is encouraging. So
it's an investment year and it continues to be an investment year. So you mentioned in your first-quarter release that you had incremental marketing
investment as well. Is that still intact or are you being a little bit more judicious in your marketing spending, given the environment?
Question: Doug Lane - Water Tower Research - Analyst
: Okay, thanks, Jackie. And just one last thing. I've had other digital marketing companies comment on the election and the impact that may have
in changing the business environment. Do you have any comment on the upcoming election and how it might affect your business?
Question: Eric Beder - SCC Research - Analyst
: Good morning. I want to talk about some pieces around the stores. So first of all, let's talk about collaborations. I know that in the outlets, you've
added a direct Disney collaboration, which is the first time we've seen that on the outlet channel. And I'm curious how collaborations fit in the
newer -- the mainline stores in terms of their ability to drive kind of a younger, newer customer. I know that historically that has been a big push
there for driving new customer base to get them in with the collaborations.
Question: Eric Beder - SCC Research - Analyst
: Okay. When you look at -- you also did a very strong rollout last year in leather, which you've expanded here, and now you have faux leather in the
outlets also again that's Q3, but it came in at the outlets, I think it's been pretty strong there. What are you seeing in terms of that customer who's
focusing on that higher product, and, A, their ability to kind of continue to buy on the higher level, and, B, what you're kind of planning to do with
that category and that fabric going forward?
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SEPTEMBER 11, 2024 / 1:30PM, VRA.OQ - Q2 2025 Vera Bradley Inc Earnings Call
Question: Eric Beder - SCC Research - Analyst
: Last question. So when you look at the new stores and the kind of the core customer who wanted to buy cotton pattern product, I know that you
do have to kind of move on somewhat, but at the same time that has been somewhat the base of the company for a very long time. What should
we be seeing? And I kind of hinted about this already, but I'd like to get a little bit more color on it going forward for that customer, who is drawn
to that product and that's the product going forward?
Question: Eric Beder - SCC Research - Analyst
: Okay. Good luck for the rest of the year and the holiday season.
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