Greetings, and welcome to the Vera Bradley, Inc. Fourth Quarter Fiscal 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mark Dely, Chief Administrative Officer. Thank you, sir. You may begin.

Good morning, and welcome, everyone. I'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 both 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-Ks filed with the SEC for a 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 will now turn the call over to Vera Bradley CEO, Jackie Ardrey. Jackie?

Good morning, everyone, and thank you for joining us today for Vera Bradley's fourth quarter and full-year earnings call. Fourth quarter remained challenging as we continue to navigate the early stages of Project Restoration, our comprehensive strategic initiative to transform our business model and brand positioning. While we experienced sequential improvement, particularly in our Vera Bradley direct channel, which performed overall at expectations, I acknowledge that our transformation is taking longer than initially anticipated. The migration of business from stores, particularly in our outlet locations, to e-commerce represented an unexpected shift, creating near-term profitability challenges that we are actively addressing with targeted strategies. We remain confident in our strategic direction, we continue to make refinements based on selling data and customer feedback. Most of these shifts are occurring in our product and pricing strategy. We will be expanding our heritage products, reducing assortment at higher price points, as well as bringing back regular deliveries of licensed products and some styles our customers are asking for. I'm also excited to share that we have a strong pipeline of new business development in our indirect channel that will begin to bear fruit later this year. Before we dive deeper into our results, I'd like to share an important development. In an effort to concentrate our resources on strengthening Vera Bradley's position in the marketplace aligned with our long-term transformation, yesterday, we signed a purchase agreement to sell the Pura Vida business. The sale of Pura Vida represents a significant step in our strategic evolution. We expect to close this sale by the end of the first quarter. I'll now provide more detail on our quarterly performance and our strategic initiatives before handing it over to Michael Schwindle to discuss our financial results in greater depth. We registered fourth quarter revenues of $100…

Thanks, Jackie. Good morning, everyone, and thank you for joining us. I'll open this up for questions in a few minutes, but first, I want to cover the results for the quarter as well as briefly discuss our guidance for fiscal 2026. For the sake of clarity, all the numbers I am discussing today are non-GAAP and exclude the charges outlined today in today's press release. A complete detail of items excluded from the non-GAAP numbers as well as a reconciliation of GAAP to non-GAAP can be found in that release. Additionally, our prior year was a fifty-three-week year versus a normal fifty-two-week year. This extra week in the prior year fourth quarter and full year contributed approximately $6 million in net revenues and increased diluted earnings per share by approximately one cent. Where appropriate, I will be highlighting our performance on a fifty-two-week basis on this call. So for the fourth quarter of fiscal 2025, our consolidated revenues totaled $100 million compared to $133.3 million in the prior year fourth quarter. Our net loss for the fourth quarter totaled $8.3 million or 30 cents per diluted share compared to net income of $3.5 million last year, 11 cents per diluted share. In terms of segment performance, Vera Bradley direct segment revenues for the current year fourth quarter totaled $76.5 million, a 17.8% decrease from $93 million in the prior year fourth quarter. On a fifty-two-week basis, however, the fourth quarter direct revenue decreased prox. Comparable sales similarly declined 17.5% with the largest impact in the outlet channel, which continued to experience similar challenges to prior quarters. Total revenues year over year were also impacted by eight new store openings and six store closures since the prior year fourth quarter. Vera Bradley indirect segment revenues for the fourth quarter totaled…

Thank you. We will now be conducting a question and answer session. One moment please while we poll for questions. Thank you. Our first question comes from the line of Eric Beder with SCC Research. Please proceed.

Good morning, Jackie, Michael. In terms of the digital marketplaces, you mentioned Target. Is the focus here to add more of those, and what are you seeing in the differences in terms of purchasing and customer base from those items?

So, Eric, it's a great question. We're definitely seeing on Target Marketplace that the customer doesn't look very different, and what we're selling is pretty similar to what we're selling. I think it's again, as I mentioned, it's around being where the customer wants to shop and meeting her where she is. And that has been a really great development. The Target Marketplace has been extremely successful, and much better than our expectations. So it's helped us pivot into an indirect strategy that we think is going to bear fruit later this year.

And in terms of collaborations, you know, how should we be thinking here this year in terms of the flows of those collaborations?

The Wicked collection is more what we call IP or intellectual property. It's a bit more under our control in terms of negotiating with those properties and launching them. We did pull back a little with the IP collections. But we're seeing that IP can bring us a very desirable customer, and our existing customers love our IP group. So you'll definitely see a more robust assortment this year and next year. We've got a really nice pipeline even through next year that will really help us bring new customers to the brand.

How do you balance the old customer, new customer to make both of them happy?

We watch our selling very closely in terms of age ranges, new versus existing to understand her better. As for the straps and zippers, we made a mistake. Some of the styling we replaced was just not something she wanted. As we see those styles come in, they're outselling what the previous styles were. We're hopeful that the customer is resilient and sees we're listening. She definitely told us she hears us and we gave them what they asked for as quickly as we could.

Okay. Good luck with the rest of the year.

Thank you, Eric.

Our next question comes from the line of Daniel Harriman with Sidoti. Please proceed with your question.

Jackie, Michael, just curious about your ability to pivot again if something else should come up. And with the revenue guide, should this be seen as managing the business through a conservative lens and the macroeconomic headwinds?

Thanks, Daniel. The pivots we've had to make were expected given the amount of change. Pivoting is not necessarily a bad thing. When you shake up a strategy, there are things you have to adjust. The team is excited and embracing the change. I do think our consumer is stressed right now, and that is reflected in our guidance. Especially in our outlet channels, we have customers under $75,000 household income not coming to stores right now. We're working on strategies to improve performance within the four walls as well as marketing programs. We expect this year to continue to be tough, and we are making all adjustments based on customer feedback and selling results.

That's really helpful, Jackie. Thank you so much.

Thank you.

Thank you. We have reached the end of the question and answer session. Ms. Ardrey, I'd like to turn the floor back over to you for closing comments.

Thank you all for joining today. We look forward to talking to you next time on our next call. This concludes our remarks today. Thank you.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.