Revenue during the quarter went down marginally by 0.01 percent to $126.66 million from $126.67 million in the previous year period. Gross margin for the quarter contracted 30 basis points over the previous year period to 57.57 percent. Total expenses were 91 percent of quarterly revenues, up from 86.75 percent for the same period last year. That has resulted in a contraction of 425 basis points in operating margin to 9 percent.

Operating income for the quarter was $11.40 million, compared with $16.79 million in the previous year period.

Robert Wallstrom, chief executive officer, noted, "The third fiscal quarter was an important one for our Company with the launch of Vera Bradley’s new brand positioning, supported by our comprehensive marketing initiatives and the opening of our new SoHo flagship store. We are pleased with improved consumer engagement driven by these initiatives. "However, the overall retail environment remains challenging. Third quarter diluted EPS was modestly below our guidance range, primarily due to continued weakness in the specialty channel and incremental promotional activity in our factory stores. In addition, verabradley.com sales were below expectations, primarily due to reduced levels of retirement product."

For fiscal year 2017, Vera Bradley, Inc. forecasts revenue to be in the range of $486 million to $491 million. The company expects diluted earnings per share to be in the range of $0.62 to $0.65.

For the fourth-quarter 2017, Vera Bradley, Inc. forecasts revenue to be in the range of $135 million to $140 million. The company expects diluted earnings per share to be in the range of $0.23 to $0.25.

Operating cash flow improves significantly
Vera Bradley, Inc. has generated cash of $26.49 million from operating activities during the nine month period, up 67,833.33 percent or $26.46 million, when compared with the last year period.

The company has spent $47.42 million cash to meet investing activities during the nine month period as against cash outgo of $22.82 million in the last year period.

The company has spent $23.88 million cash to carry out financing activities during the nine month period as against cash outgo of $27.71 million in the last year period.

Cash and cash equivalents stood at $52.86 million as on Oct. 29, 2016, down 14.45 percent or $8.93 million from $61.80 million on Oct. 31, 2015.

Working capital decreases marginally
Vera Bradley, Inc. Bradley has witnessed a decline in the working capital over the last year. It stood at $181.75 million as at Oct. 29, 2016, down 4.30 percent or $8.16 million from $189.91 million on Oct. 31, 2015. Current ratio was at 4.69 as on Oct. 29, 2016, up from 4.41 on Oct. 31, 2015.

Cash conversion cycle (CCC) has decreased to 69 days for the quarter from 175 days for the last year period. Days sales outstanding were almost stable at 28 days for the quarter, when compared with the last year period.

Days inventory outstanding has decreased to 81 days for the quarter compared with 189 days for the previous year period. At the same time, days payable outstanding went down to 40 days for the quarter from 42 for the same period last year.