Financial Analysis

Commitments and Contingencies The Company is subject to various claims and contingencies arising in the normal course of business, including those relating to product liability, legal claims, employee benefits, environmental issues, and other matters. Management believes that at this time it is not probable that any of these claims will have a material adverse effect on the Companys financial condition, results of operations, or cash flows. However, the outcomes of legal proceedings and claims brought against the Company are subject to uncertainty, and future developments could cause these actions or claims, individually or in aggregate, to have a material adverse effect on the Companys financial condition, results of operations, or cash flows of a particular reporting period. In June of 2025, the Company received a notice from the buyer of Creative Genius requesting a purchase price adjustment of approximately $4.6 million related to the sale of Creative Genius. The demand was based on certain working capital adjustments. The Company has disputed this purchase price adjustment request. On August 27, 2025, the Company filed an action in the Chancery Court of Delaware seeking a judgment declaring that the buyers claim for a purchase price adjustment is improper and barred by the purchase Agreement. The Company has filed for summary judgment in that action. At this time, we are not able to estimate a possible loss or range of loss that may result from this matter or to determin …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Debt 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 dated September 7, 2018. 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. Any proceeds of the credit facilities will be used to finance general corporate purposes of VBD and its subsidiaries, including but not limited to Vera Bradley International, LLC, Vera Bradley Sales, LLC, and Creative Genius, LLC (collectively, the Named Subsidiaries). 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. The Fourth Amendment allowed for the sale of Creative Genius and irrevocably released Creative Genius from the loan documents upon completion of the sale. Amounts outstanding under the Credit Agreement bear interest at a per annum rate equal to (i) for CBFR …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following presents the Company's net revenues disaggregated by product category for the thirteen weeks ended May 2, 2026 and May 3, 2025 (in thousands): Thirteen Weeks Ended May 2, 2026 Direct Segment Indirect Segment Total Product categories Bags $ 19,676 $ 6,105 $ 25,781 Travel 12,110 2,116 14,226 Accessories 7,350 1,449 8,799 Home 3,100 199 3,299 Apparel/Footwear 1,178 30 1,208 Other 1,439 (1) 950 (2) 2,389 Total net revenues $ 44,853 (3) $ 10,849 (4) $ 55,702 (1) Primarily includes net revenues from stationery, freight, and gift card breakage. (2) Primarily includes net revenues from licensing agreements, freight, and merchandising. (3) Net revenues were related to product sales recognized at a point in time. (4) $9.9 million of net revenues related to product sales recognized at a point in time and $0.9 million of net revenues related to sales-based royalties recognized over time. Thirteen Weeks Ended May 3, 2025 Direct Segment Indirect Segment Total Product categories Bags $ 17,184 $ 4,480 $ 21,664 Travel 12,172 2,315 14,487 Accessories 7,223 765 7,988 Home 3,537 232 3,769 Apparel/Footwear 1,562 75 1,637 Other 1,405 (1) 702 (2) 2,107 Total net revenues $ 43,083 (3) $ 8,569 (4) $ 51,652 (1) Primarily includes net revenues from stationery, freight, and gift card breakage. (2) Primarily includes net revenues from licensing agreements and freight. (3) Net revenues were related to product sales recognized at a point in time. (4) $8.0 million of net revenues related to pr …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

"Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date: Level 1 Quoted prices in active markets for identical assets or liabilities; Level 2 Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; Level 3 Unobservable inputs based on the Companys own assumptions. The classification of fair value measurements within the hierarchy is based upon the lowest level of input that is significant to the measurement. The carrying amounts reflected on the Condensed Consolidated Balance Sheets for cash and cash equivalents, accounts receivable, other current assets, and accounts payable as of May 2, 2026 and January 31, 2026, approximated their fair values. The following table details the fair value measurements of the Company's instruments as of May 2, 2026 and January 31, 2026 (in thousands): Level 1 Level 2 Level 3 May 2, 2026 January 31, 2026 May 2, 2026 January 31, 2026 May 2, 2026 January 31, 2026 Contingent consideration related to sale of business (1) 1,835 1,835 (1) Established during the thirteen weeks ended May 3, 2025. Refer to Note 13 herein for additional information. The Company …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Income Taxes The provision for income taxes for interim periods is based on an estimate of the annual effective tax rate adjusted to reflect the impact of discrete items. Management judgment is required in projecting ordinary income to estimate the Companys annual effective tax rate. The effective tax rate for the thirteen weeks ended May 2, 2026, was (2.4)%, compared to (2.3)% for the thirteen weeks ended May 3, 2025. Refer to Note 13 herein for the information regarding the income tax impact associated with the sale of Pura Vida on March 31, 2025. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, making permanent certain provisions of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. In accordance with ASC 740, the Company has recognized the effects of the new tax law in fiscal 2026. As the Company maintains a full valuation allowance on its U.S. deferred tax assets, the legislation does not have a material impact on our consolidated financial statements. …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Leases Discount Rate The weighted-average discount rate as of May 2, 2026, and May 3, 2025 was 5.1% and 5.0%, respectively. The discount rate is not readily determinable in the lease; therefore, the Company estimated the incremental borrowing rate, at the commencement date of each lease, which is the rate of interest it would have to borrow on a collateralized basis over a similar term with similar payments. Leases Not Yet Commenced As of May 2, 2026, the Company had one lease which was executed but for which it did not have control of the underlying asset; therefore, the lease liability and right-of-use asset are not recorded on the Condensed Consolidated Balance Sheet. This lease contains undiscounted lease payments, which will be included in the determination of the lease liability, totaling approximately $1.2 million and has a term of approximately 3 years commencing in fiscal year 2027. Amounts Recognized in the Condensed Consolidated Financial Statements The following lease expense is recorded within cost of sales for the Asia sourcing office and certain equipment leases and within selling, general, and administrative expenses for all other leases, including retail store leases, in the Company's Condensed Consolidated Statement of Operations for the thirteen weeks ended May 2, 2026 and May 3, 2025 (in thousands): Thirteen Weeks Ended May 2, 2026 May 3, 2025 Operating lease cost $ 5,846 $ 6,358 Variable lease cost 1,102 1,084 Short-term lease cost 61 112 Less: Sublease i …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

"Recently Issued Accounting Pronouncements In November 2024, the FASB issued Accounting Standards Update ASU 2024-03, ""Disaggregation of Income Statement Expenses"". The ASU requires financial statement footnote disclosure of specified information about certain costs and expenses, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The ASU is effective for fiscal years beginning after December 15, 2026 (the Companys fiscal year 2028) and interim reporting periods beginning after December 15, 2027 (interim periods for the Companys fiscal year 2029). Public business entities are required to apply the guidance prospectively, however, retrospective application is permitted. The Company is currently evaluating the impact of this ASU but expects the impact to be limited to financial statement footnote disclosures. In September 2025, the FASB issued Accounting Standards Update (ASU) No. 2025-06, ""Intangibles - Goodwill and Other-Internal-Use Software (Topic 350-40): Targeted Improvements to the Accounting for Internal-Use Software"". This amendment modernizes and makes targeted improvements to the accounting for software costs found under Topic 350-40, effective for fiscal years and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements and disclosures. Recent Business Developments In Febr …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

"Cost Savings Initiatives and Other Charges Cost Savings Initiatives and Severance Charges During fiscal 2023, the Company began implementation of its targeted cost reductions, which were expected to be fully realized in fiscal 2025. In late fiscal 2025, additional cost optimization initiatives were identified and are expected to be fully realized in fiscal 2027. Expense savings are being derived across various areas of the Company, including retail store efficiencies, marketing expenses, information technology contracts, professional services, logistics and operational costs, and corporate payroll. The Company incurred the following charges during the thirteen weeks ended May 2, 2026 (in thousands): Reportable Segment Direct Indirect Unallocated Corporate Expenses Total Expense Severance charges $ 334 $ 117 $ 666 $ 1,117 Total (1) $ 334 $ 117 $ 666 $ 1,117 (1) Recorded within selling, general, and administrative (""SG&A"") expenses A summary of charges and related liabilities associated with the cost savings initiatives and severance charges are as follows (in thousands): Severance Charges and Cash Retention Payment Acceleration Charges (1) Liability as of January 31, 2026 $ 744 Fiscal 2027 charges 1,117 Cash payments (522) Liability as of May 2, 2026 (1) $ 1,339 (1) Remaining liability is recorded within accrued employment costs The Company incurred the following charges during the thirteen weeks ended May 3, 2025 (in thousands): Reportable Segment Direct Indirect Unall …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

Revenue from Contracts with Customers Disaggregation of Revenue The following presents the Company's net revenues disaggregated by product category for the thirteen weeks ended May 2, 2026 and May 3, 2025 (in thousands): Thirteen Weeks Ended May 2, 2026 Direct Segment Indirect Segment Total Product categories Bags $ 19,676 $ 6,105 $ 25,781 Travel 12,110 2,116 14,226 Accessories 7,350 1,449 8,799 Home 3,100 199 3,299 Apparel/Footwear 1,178 30 1,208 Other 1,439 (1) 950 (2) 2,389 Total net revenues $ 44,853 (3) $ 10,849 (4) $ 55,702 (1) Primarily includes net revenues from stationery, freight, and gift card breakage. (2) Primarily includes net revenues from licensing agreements, freight, and merchandising. (3) Net revenues were related to product sales recognized at a point in time. (4) $9.9 million of net revenues related to product sales recognized at a point in time and $0.9 million of net revenues related to sales-based royalties recognized over time. Thirteen Weeks Ended May 3, 2025 Direct Segment Indirect Segment Total Product categories Bags $ 17,184 $ 4,480 $ 21,664 Travel 12,172 2,315 14,487 Accessories 7,223 765 7,988 Home 3,537 232 3,769 Apparel/Footwear 1,562 75 1,637 Other 1,405 (1) 702 (2) 2,107 Total net revenues $ 43,083 (3) $ 8,569 (4) $ 51,652 (1) Primarily includes net revenues from stationery, freight, and gift card breakage. (2) Primarily includes net revenues from licensing agreements and freight. (3) Net revenues were related to product sales recognized at …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

"Segment Reporting The Company has two operating segments, which are also its reportable segments: Direct and Indirect. During the thirteen weeks ended May 3, 2025, the Company completed the sale of its wholly owned subsidiary, Creative Genius, also referred to as Pura Vida which was the Company's third reporting segment. Refer to Note 13 for additional information. These operating segments are components of the Company for which separate financial information is available and for which operating results are evaluated on a regular basis by the chief operating decision maker (""CODM"") in deciding how to allocate resources and in assessing the performance of the segments. The Company's CODM is our Chief Executive Officer & Chairman. The Direct segment includes Vera Bradley 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 generated from this segment are driven through the sale of Vera Bradley-branded products from Vera Bradley to end consumers. The Indirect segment represents revenues generated through the distribution of Vera Bradley-branded products to specialty retailers representing approximately 1,200 locations, substantially all of which are located in the United States; key accounts, which include department stores, national accounts, and third-party inventory liquidators; and royalties recognized throu …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing