Greetings, and welcome to the Vera Bradley Fourth Quarter Fiscal 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mark Dely, Chief Administrative Officer [ for very ]. Thank you. You may begin.

Good morning, and welcome, everyone. We'd like to thank you for joining us for today's call. Some of the statements made during our prepared remarks and 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 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-K 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'll now turn the call over to Vera Bradley's Chairman and Chief Executive Officer Ian Bickley. Ian?

Good morning, everyone, and thank you for joining us for Vera Bradley's Fourth Quarter and Full Year 2026 Earnings Call. Before I begin discussing our quarterly results and continued transformation progress, I want to share some important leadership news that reflects the Board's confidence in our strategic direction and the momentum we are building. I am pleased to announce that the Board of Directors has named me as Vera Bradley's permanent Chief Executive Officer in addition to my current role as Chairman of the Board, transitioning from my role as Executive Chairman. Additionally, our Chief Financial Officer, Martin Layding, will be expanding the scope of his responsibilities as Chief Operating and Financial Officer. I want to express my sincere gratitude to our Board of Directors for their support, confidence and this tremendous opportunity to lead Vera Bradley into its next chapter of growth. This leadership transition reinforces the Board's belief in our existing strategies under Project Sunshine and validates that we are on the right path forward. I remain confident that with the right focus, effort and execution we have a tremendous opportunity to increase market share and return the business to growth by reengaging our loyal customer base while also expanding our reach and relevance to new customer segments. In addition to my appointment to the permanent CEO seat and Martin's added role as COO. Over the past few months, we have added new leadership talent across all key customer-facing functions including merchandising, marketing, digital commerce, wholesale and stores. This was achieved through a combination of new external leadership appointments as well as internal promotions of top talent, demonstrating our commitment to the path of continued progress in reinvigorating and reimagining the iconic Vera Bradley brand. I'm also pleased to report that the fourth quarter marks our first quarter…

Thanks, Ian. Good morning, everyone, and thank you for joining us. I have a few brief comments to make about our performance for the quarter. Before I begin, I want to thank the Board for their unwavering support and confidence in entrusting me with expanded operational responsibilities. Our focus remains on transforming our operational processes to deliver enhanced business performance and greater efficiency across the organization. For the sake of clarity, all of the numbers I am discussing today are non-GAAP and exclude the charges outlined in today's press release, the complete detail of items are excluded from the non-GAAP numbers as well as a reconciliation of GAAP to non-GAAP can be found in that release. For the fourth quarter of fiscal 2026, our consolidated revenues totaled $84.9 million compared to $86.4 million in the prior year fourth quarter. Net income from continuing operations for the fourth quarter totaled $2.5 million or $0.09 per diluted share compared to a net loss from continuing operations of negative $5.4 million last year or negative $0.19 per diluted share. In terms of segment performance, Vera Bradley Direct segment revenues for the current year fourth quarter totaled $74.5 million a 2.6% decrease from $76.5 million in the prior year fourth quarter. Comparable sales declined 0.7%, which represents a sequential comparable sales improvement in each quarter of the current fiscal year, our original 100 handbag heritage prints, along with leveraging holiday promotional activity resulted in positive brand comps and overall positive growth versus last year. Total revenues year-over-year were also impacted by 2 store openings -- new store openings, 13 store closures since the prior year fourth quarter and negatively impacted by approximately $0.4 million due to the temporary store closures associated with [ winter storm firm ] in week 52. Vera Bradley Indirect segment…

[Operator Instructions] Our first question comes from the line of Eric Beder with SCC Research.

Congratulations on the appointments and the strong Q4 results. When we look at it, I know you continue to make progress, when should we feel that the product flows and kind of the product mix is where you want it to be? I know you've worked through kind of prior -- some of the [ prior manages ] pieces. How should we be judging what we're seeing as we go to the stores and beyond through this year?

I'll begin. Thanks, Eric, first of all, and appreciate the comments. Obviously, this is a really exciting opportunity. And delighted to have a chance to step into this role. I think pretty consistent with what we have said before. We -- our impact on product has gradually improved over time, right, in terms of what we could impact. As I mentioned in the call, about 80% of what is in there for spring/summer, we've been able to impact. I think to fall winter we basically have a blank sheet of paper and everything that is there, we will have been able to impact. And additionally, we are continuing to learn from the product that has flowed in already in terms of the decisions that we've made. With that said, as you are well aware, we are still managing through and balancing some overhang of inventory from Project Restoration, a lot of the discontinued and aged products. So I think this is going to continue to be a path that we're going to have to navigate through over the next 6 to 12 months. And I think overall, I really do think that we need to look at fiscal '27 still as a year of both stabilization of the business, but also a year where we are continuing to build the strong foundation that we believe are going to lead the business to growth in FY '28 and beyond.

Great. And when you think about the future, some of the shifts going on in terms of stores, other pieces. Where should we be thinking about the [ death and where ] the focuses are going to be on this force versus the digital versus the other pieces? And how the store flows can kind of look going forward?

Yes. No, I think it's a great question. Obviously, let's not downplay the digital business because it is a very important part of our business today. It is an important source of profitability. And it is an important way in which we can reach consumers, especially new consumers when our retail and outlet fleet may not be optimized in the way that we would like it to be. But with respect to the brick-and-mortar, I think first of all, we're going to continue to leverage the fleet that we have and optimize the productivity of that business. That's a big reason for Outlet 2.0 because the majority of our fleet today is outlet stores, which is sort of a -- which is a legacy that we have inherited. But these stores are, as you know, very productive. They get incredibly high foot traffic and the majority of them are located in centers where there are also luxury brands and other premium accessible luxury brands. And so there's a very high-quality footfall and eyeballs that we get. So our -- it is important for us to be the best that we can be in those outlet centers because that's where we're getting the majority of the retail footfall visibility today. In terms of the brand stores, this for us is an opportunity. And as we get more confident about the performance of the product. And as you know, we're now really going to step into a much higher here with the marketing now that we're feeling good about the product pipeline, this is going to be something we're going to be looking at very carefully in terms of where we could selectively open new brand stores in pockets which would make sense for [ us and where we don't ] have coverage. And I would say the last piece of this is going to be the wholesale channel, which for us is going to be a very important channel that we need to focus on and rebuild because one of the things we hear from many of our consumers when we do research is they don't know where to find us. And in many of these sort of more affluent areas, we don't have brand stores. And so I think we also have an opportunity with our wholesale accounts to develop the business there. So focusing on key retailers specialty accounts, in particular, this is a way to -- for us to broaden awareness and reach and fill in some of the gaps that we don't have with our own fleet. And so I think all boats will rise.

Great. We -- so your [ 7 ] Outlet 2.0, do you think you'll open any more of them in 2026? Or should we be thinking about it as another year of kind of increasing the experimentation with the group?

I can't say that definitively. I think you meant when we opened anything in FY '27, right, this fiscal year?

Yes. FY '26.

Yes, yes. No worries. But look, I think if I had to place a bet, I would say we are inclined to do a few more Outlet 2.0 stores this fiscal year. I think there are just some opportunities to refine what we do in Outlet 2.0 and also to think about where are going to be the best places for us to do it.

Again, congratulations and look forward to '26.

And this -- we have reached the end of the question-and-answer session. And this also concludes today's conference call. You may disconnect your lines at this time, and we do thank you for your participation. Have a great day.