What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-27 compared with 2025-03-28 · 351 added, 415 removed, 699 unchanged (52% of the section changed)

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Index to Consolidated Financial Statements

Reports of Independent Registered Public Accounting Firm (PCA O B I D 34 )

Consolidated Balance Sheets as of February 1 , 202 5 , and February 3, 2024

Consolidated Statements of Operations for the fiscal years ended February 1 , 202 5 , February 3, 2024, and January 28, 2023

Consolidated Statements of Comprehensive (Loss) Income for the fiscal years ended February 1 , 202 5 , February 3, 2024, and January 28, 2023

Consolidated Statements of Shareholders’ Equity for the fiscal years ended February 1 , 202 5 , February 3, 2024, and January 28, 2023

Consolidated Statements of Cash Flows for the fiscal years ended February 1, 202 5, February 3, 2024, and January 28, 2023

Reports of Independent Registered Public Accounting Firm (PCAOB ID 34 )

Consolidated Balance Sheets as of Jan uary 31, 202 6, and February 1, 2025

Consolidated Statements of Operations for the fiscal years ended January 31, 202 6, February 1, 2025, a nd February 3, 2024

Consolidated Statements of Comprehensive (Loss) Income for the fiscal years ended Janua ry 31, 202 6, February 1, 2025, and February 3, 2024

Consolidated Statements of Shareholders’ Equity for the fiscal years ended January 31, 202 6, February 1, 2025, and February 3, 2024

Consolidated Statements of Cash Flows for the fiscal years ended January 31, 202 6, February 1, 2025, and February 3, 2024

Notes to Consolidated Financial Statements

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We have audited the accompanying consolidated balance sheets of Vera Bradley, Inc.

and subsidiaries (the "Company") as of February 1, 2025 and February 3, 2024, the related consolidated statements of operations, comprehensive income (loss), shareholders' equity, and cash flows, for each of the three years in the period ended February 1, 2025, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of February 1, 2025 and February 3, 2024, and the results of its operations and its cash flows for each of the three years in the period ended February 1, 2025, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of February 1, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 28, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting.

and subsidiaries (the "Company") as of January 31, 2026 and February 1, 2025, the related consolidated statements of operations, comprehensive income, shareholders' equity, and cash flows, for each of the three years in the period ended January 31, 2026, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of January 31, 2026 and February 1, 2025, and the results of its operations and its cash flows for each of the three years in the period ended January 31, 2026, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January 31, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 27, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

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Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current‐period audit of the financial statements that was communicated or was required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Indefinite-Lived Intangible Assets – Refer to Notes 2 and 15 to the financial statements

Valuation of Inventories - Refer to Note 2 to the financial statements

Critical Audit Matter Description

The Company’s annual quantitative analysis of the indefinite‐lived Pura Vida brand asset (“Pura Vida brand”) for impairment involves the comparison of the fair value of the Pura Vida brand asset to its carrying value.

The Company used the relief‐from‐royalty method to estimate the fair value of the Pura Vida brand, which required management to make significant estimates and assumptions related to the projected revenue growth, royalty rate, and discount rate.

The carrying value of the Pura Vida brand was $6.2 million as of the second quarter.

Due to subsequent triggering events, the Company performed a second quantitative analysis of the carrying value of the Pura Vida brand in the fourth quarter of fiscal 2025 and recorded a full impairment charge of $6.2 million.

We identified the annual impairment analysis of the Pura Vida brand as a critical audit matter because of the significant judgments made by management to estimate the fair value of this indefinite‐lived asset.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions particularly related to the projected revenue growth, royalty rate, and discount rate.

Inventories consist of purchased merchandise and are stated at the lower of cost or net realizable value.

Cost is determined using the first-in, first-out method.

The Company considers obsolescence, excess quantities, and other factors, including the popularity of a pattern or product, in evaluating net realizable value.

Valuation adjustments are recorded if the cost of specific inventory items on hand exceeds the amount the Company expects to realize from the ultimate sale or disposal of the inventory.

This adjustment calculation requires the Company to make assumptions and estimates, which are based on factors such as merchandise seasonality, historical trends, and estimated sales and inventory levels, including sell-through of remaining units.

Given the assumptions and estimates used by management to estimate the valuation adjustments, auditing the adjustments to inventory involved a higher degree of auditor judgment and involvement of more experienced senior members of the engagement to evaluate the reasonableness of management's estimates and assumptions.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the projected revenue growth, royalty rate, and discount rate for the Pura Vida brand included the following, among others:

We tested the effectiveness of controls over management’s brand impairment analysis, including those over the determination of the fair value, such as controls related to management’s forecasts of projected revenue growth, selection of royalty rate, and selection of discount rates.

We evaluated management’s ability to accurately forecast by comparing actual results to management’s historical forecasts.

We evaluated the reasonableness of management’s projected revenue growth by comparing the forecasts to (1) historical results, (2) internal communications to management and the Board of Directors, and (3) forecasted information included in industry reports.

With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology, and (2) discount rate and royalty rate by:

Assessing the appropriateness of the valuation methodology used to determine the discount rate and royalty rate.

Testing the underlying source information and the mathematical accuracy of the calculations.

Developing a range of independent estimates and comparing those to the discount rate and royalty rate selected by management.

Our audit procedures related to adjustments made to inventory for lower of cost or net realizable value and obsolescence included the following, among others:

• We tested the effectiveness of controls over the inventory valuation process, including controls over the inputs that are used in management's estimate.

• We evaluated the appropriateness and consistency of management's method and assumptions used in developing their estimate of the inventory valuation adjustment, and inquired of management regarding current and expected future sales trends.

• We tested the mathematical accuracy of the Company's inventory valuation adjustment calculation.

• We evaluated the appropriateness of specific inputs supporting management's estimate, including historic inventory trends, the age of on-hand inventory levels, and current and subsequent sales of inventory.

• We tested the recorded inventory reserve by developing an expectation for the amount of the inventory reserve and comparing our expectation to the amount recorded by management.

/s/ Deloitte & Touche LLP

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We have audited the internal control over financial reporting of Vera Bradley, Inc.

and subsidiaries (the “Company”) as of February 1, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of February 1, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended February 1, 2025, of the Company and our report dated March 28, 2025, expressed an unqualified opinion on those financial statements.

and subsidiaries (the “Company”) as of January 31, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 31, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended January 31, 2026, of the Company and our report dated March 27, 2026, expressed an unqualified opinion on those financial statements.

Basis for Opinion

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Inventories 75,951 91,430

Short-term contingent consideration 1,605 —

Income taxes receivable 317 584

Prepaid expenses and other current assets 6,034 8,072

Current assets of discontinued operations — 22,361

Total current assets 119,721 164,872

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Property, plant, and equipment, net 46,358 52,555

Intangible assets, net — 7,573

Deferred income taxes — 20,355

Long-term contingent consideration 230 —

Other assets 4,463 9,048

Long-term assets of discontinued operations — 5,374

Total assets $ 234,005 $ 306,690

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Income taxes payable 16 —

Current liabilities of discontinued operations — 6,023

Total current liabilities 50,450 57,993

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Other long-term liabilities 2 47

Long-term liabilities of discontinued operations — 3,388

Total liabilities 102,366 127,735

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2026 February 1,

2024 January 28,

2025 February 3,

Net revenues $ 269,651 $ 318,795 $ 383,713

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Selling, general, and administrative expenses 158,142 188,462 193,247

Impairment of goodwill and intangible assets 6,237 5,429 69,256

Other income, net 1,193 832 899

Operating (loss) income ( 42,356 ) 10,442 ( 94,871 )

Interest income (expense), net 1,118 890 ( 153 )

(Loss) income before income taxes ( 41,238 ) 11,332 ( 95,024 )

Income tax expense (benefit) 20,950 3,494 ( 15,640 )

Operating (loss) income from continuing operations ( 31,912 ) ( 28,792 ) 11,617

Interest (expense) income, net ( 462 ) 752 661

(Loss) income from continuing operations before income taxes ( 32,374 ) ( 28,040 ) 12,278

Income tax expense 303 5,339 3,682

Net (loss) income from continuing operations ( 32,677 ) ( 33,379 ) 8,596

Loss from discontinued operations, net of income tax ( 15,163 ) ( 28,809 ) ( 758 )

Net (loss) income $ ( 47,840 ) $ ( 62,188 ) $ 7,838

Net loss attributable to redeemable noncontrolling interest — — ( 19,649 )

Net (loss) income attributable to Vera Bradley, Inc.

$ ( 62,188 ) $ 7,838 $ ( 59,735 )

Basic weighted-average shares outstanding 27,902 28,935 30,833

Diluted weighted-average shares outstanding 27,902 28,935 31,314

Basic net (loss) income per share attributable to Vera Bradley, Inc.

common shareholders $ ( 2.15 ) $ 0.25 $ ( 1.90 )

Diluted net (loss) income per share attributable to Vera Bradley, Inc.

common shareholders $ ( 2.15 ) $ 0.25 $ ( 1.90 )

Basic net (loss) income per share:

Continuing operations $ ( 1.17 ) $ ( 1.15 ) $ 0.27

Discontinued operations $ ( 0.54 ) $ ( 1.00 ) $ ( 0.02 )

Basic net (loss) income per share $ ( 1.71 ) $ ( 2.15 ) $ 0.25

Diluted net (loss) income per share:

Continuing operations $ ( 1.17 ) $ ( 1.15 ) $ 0.27

Discontinued operations $ ( 0.54 ) $ ( 1.00 ) $ ( 0.02 )

Diluted net (loss) income per share $ ( 1.71 ) $ ( 2.15 ) $ 0.25

The accompanying notes are an integral part of these consolidated financial statements.

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2026 February 1,

2024 January 28,

2025 February 3,

Net (loss) income $ ( 47,840 ) $ ( 62,188 ) $ 7,838

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Comprehensive (loss) income, net of tax ( 47,953 ) ( 62,135 ) 7,871

Comprehensive loss attributable to redeemable noncontrolling interest — — ( 19,649 )

Comprehensive (loss) income attributable to Vera Bradley, Inc.

$ ( 62,135 ) $ 7,871 $ ( 59,811 )

The accompanying notes are an integral part of these consolidated financial statements.

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Balance at January 28, 2023 30,766,024 12,079,690 $ 109,718 $ 274,629 $ ( 105 ) $ ( 132,864 ) $ 251,378

Net loss attributable to Vera Bradley, Inc.

— — — ( 59,735 ) — — ( 59,735 )

Translation adjustments — — — — ( 76 ) — ( 76 )

Restricted shares vested, net of repurchase for taxes 416,543 — ( 1,430 ) — — — ( 1,430 )

Stock-based compensation — — 3,241 — — — 3,241

Treasury stock purchased ( 2,820,949 ) 2,820,949 — — — ( 18,062 ) ( 18,062 )

Balance at January 28, 2023 30,766,024 12,079,690 $ 109,718 $ 274,629 $ ( 105 ) $ ( 132,864 ) $ 251,378

Net income attributable to Vera Bradley, Inc.

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Balance at February 3, 2024 30,813,616 12,439,244 $ 112,590 $ 282,467 $ ( 72 ) $ ( 135,056 ) $ 259,929

Net loss attributable to Vera Bradley, Inc.

— — — ( 62,188 ) — — ( 62,188 )

Net loss — — — ( 62,188 ) — — ( 62,188 )

Translation adjustments — — — — 53 — 53

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Balance at February 1, 2025 27,700,900 15,834,579 $ 115,515 $ 220,279 $ ( 19 ) $ ( 156,820 ) $ 178,955

Net loss — — — ( 47,840 ) — — ( 47,840 )

Translation adjustments — — — — ( 113 ) — ( 113 )

Restricted shares vested, net of repurchase for taxes 264,620 — ( 233 ) — — — ( 233 )

Stock-based compensation — — 870 — — — 870

Balance at January 31, 2026 27,965,520 15,834,579 $ 116,152 $ 172,439 $ ( 132 ) $ ( 156,820 ) $ 131,639

The accompanying notes are an integral part of these consolidated financial statements.

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2026 February 1,

2024 January 28,

2025 February 3,

Cash flows from operating activities

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Amortization of operating right-of-use assets 20,228 20,430 21,021

Goodwill and intangible asset impairment 6,237 5,429 69,256

Intangible asset impairment — 6,237 5,429

Other impairment charges 1,048 2,557 —

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Deferred income taxes — 20,355 1,761

Loss on sale of business 15,163 — —

Other non-cash charges, net 85 34 7

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Purchases of property, plant, and equipment ( 3,290 ) ( 10,373 ) ( 3,770 )

Proceeds from sale of business, net of cash disposed 1,754 — —

Cash paid for business acquisition — — ( 10,000 )

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Repurchase of common stock — ( 21,764 ) ( 2,192 )

Distributions to redeemable noncontrolling interest — — ( 613 )

Borrowings under asset-based revolving credit agreement 15,000 — —

Repayment of borrowings under asset-based revolving credit agreement ( 15,000 ) — —

Net cash used in financing activities ( 233 ) ( 22,515 ) ( 3,548 )

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2026 February 1,

2024 January 28,

2025 February 3,

Supplemental disclosure of cash-flow information

Cash paid (received) for income taxes, net $ 1,352 $ 837 $ ( 6,573 )

Cash paid for income taxes, net $ 65 $ 1,352 $ 837

Cash paid for interest $ 359 $ 140 $ 145

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Purchases of property, plant, and equipment incurred but not yet paid $ 149 $ 826 $ 150

Contingent consideration related to sale of business $ 1,835 $ — $ —

Refer to Note 4 herein for supplemental cash flow information regarding the Company’s leases.

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and its wholly and majority owned subsidiaries, except where the context requires otherwise or where otherwise indicated.

Vera Bradley, Inc.

operates two unique lifestyle brands – Vera Bradley and Pura Vida.

We believe Vera Bradley and Pura Vida are complementary businesses, both with devoted, emotionally-connected, and multi-generational female customer bases;

alignment as casual, comfortable, affordable, and fun brands;

positioning as “gifting” and socially-connected brands;

strong, entrepreneurial cultures;

a keen focus on community, charity, and social consciousness;

multi-channel distribution strategies;

and talented leadership teams aligned and committed to the long-term success of their brands.

Vera Bradley is a leading designer of women’s handbags, luggage and travel items, fashion and home accessories, and unique gifts.

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On January 30, 2023, the Company purchased the remaining 25 % interest in Pura Vida.

Pura Vida, based in La Jolla, California, is a digitally native lifestyle brand that has a differentiated and expanding offering of bracelets, jewelry, and other lifestyle accessories.

On March 11, 2025 the Company entered into an Interest Purchase Agreement (the “Agreement”) to sell 100 % of Pura Vida.

The transaction is expected to close by the end of the first quarter of fiscal 2026.

A copy of the Agreement is included as an exhibit to this Form 10-K.

Refer to Note 18 herein for additional information.

The Company has three reportable segments:

Vera Bradley Direct (“VB Direct”), Vera Bradley Indirect (“VB Indirect”), and Pura Vida.

On March 11, 2025, the Company entered into an Interest Purchase Agreement (the “Agreement”) to sell one hundred percent ( 100 %) of Creative Genius, Inc., (“Creative Genius”) which operates under the name Pura Vida Bracelets.

The sale consummated on March 31, 2025.

As a result, the operations of Pura Vida have been classified as discontinued operations in the consolidated financial statements in accordance with ASC 205-20, Discontinued Operations.

Prior period amounts have been retrospectively adjusted to conform to the current period presentation.

Unless otherwise specified, disclosures in these consolidated financial statements reflect continuing operations only.

Certain prior period data, primarily related to discontinued operations, have been reclassified in the Consolidated Financial Statements and accompanying notes to conform to the current period presentation.

Following the sale, Pura Vida is no longer included in the Company’s consolidated financial results.

Refer to Note 16 for additional information.

The Company has two reportable segments:

Vera Bradley Direct (“VB Direct”) and Vera Bradley Indirect (“VB Indirect”).

• The VB Direct business consists of sales of Vera Bradley products through Vera Bradley full-line and outlet stores in the United States;

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and direct to consumer marketplaces.

As of February 1, 2025, the Company operated 39 full-line stores and 87 outlet stores.

• The VB Indirect business consists of sales of Vera Bradley products to approximately 1,200 specialty retail locations, substantially all of which are located in the United States, as well as department stores, national accounts, third-party e-commerce sites, third-party inventory liquidators, and royalties recognized through licensing agreements related to the Vera Bradley brand.

• The Pura Vida segment represents revenues generated through the Pura Vida website (www.puravidabracelets.com);

the distribution of Pura Vida-branded products to wholesale retailers, substantially all of which are located in the United States;

and through its seven retail stores.

As of January 31, 2026, the Company operated 29 full-line stores and 86 outlet stores.

• The VB Indirect business consists of sales of Vera Bradley products to approximately 1,000 specialty retail locations, substantially all of which are located in the United States, as well as department stores, national accounts, third-party inventory liquidators, and royalties recognized through licensing agreements related to the Vera Bradley brand.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, including Pura Vida.

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

The Company has eliminated intercompany balances and transactions in consolidation.

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The Company utilizes a 52-53 week fiscal year ended on the Saturday closest to January 31.

As such, fiscal years 2025 and 2023, ended February 1, 2025 and January 28, 2023 respectively, each reflected a 52-week period.

As such, fiscal years 2026 and 2025, ended January 31, 2026 and February 1, 2025 respectively, each reflected a 52-week period.

Fiscal year 2024, ended February 3, 2024 reflected a 53-week period.

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The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of the Company’s assets, liabilities, revenues, and expenses, as well as the disclosures relating to contingent assets and liabilities at the date of the consolidated financial statements.

Significant areas requiring the use of management estimates include the valuation of inventories, valuation of long-lived assets, including operating right-of-use assets, valuation of goodwill and indefinite-lived intangible assets, accounts receivable valuation allowances, and sales return allowances.

Significant areas requiring the use of management estimates include the valuation of inventories, valuation of long-lived assets, including operating right-of-use assets, accounts receivable valuation allowances, and sales return allowances.

Actual results could differ from these estimates.

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Leas ehold improvements are amortized over the shorter of the life of the asset or the lease term.

Lease terms typically range f rom three to ten years .

Lease terms typically range from three to ten years .

When a decision is made to abandon property, plant, and equipment prior to the end of the previously estimated useful life, depreciation or amortization estimates are revised to reflect the use of the asset over the shortened estimated useful life.

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Routine maintenance and repair costs are expensed as incurred.

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

The Company capitalizes certain costs incurred in connection with acquiring, modifying, and installing internal-use software.

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Software costs that do not meet capitalization criteria are expensed as incurred.

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

Revenue Recognition and Accounts Receivable

Vera Bradley and Pura Vida product sales to customers, including amounts billed to customers for shipping fees, as well as royalties from licensing arrangements related to the Vera Bradley brand, are included in net revenues.

Vera Bradley product sales to customers, including amounts billed to customers for shipping fees, as well as royalties from licensing arrangements related to the Vera Bradley brand, are included in net revenues.

Costs related to shipping of product are classified in cost of sales in the Consolidated Statements of Operations.

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and (v) recognize revenue as the performance obligations are satisfied.

The Company collects payment at the point of sale for Vera Bradley and Pura Vida full-line and outlet store transactions, upon shipment for Vera Bradley e-commerce transactions, and upon purchase for Pura Vida e-commerce transactions.

The Company generally collects payment in arrears in accordance with established payment terms for each customer within the VB Indirect segment and for Pura Vida wholesale retailers.

The Company collects payment at the point of sale for Vera Bradley full-line and outlet store transactions and upon shipment for Vera Bradley e-commerce transactions.

The Company generally collects payment in arrears in accordance with established payment terms for each customer within the VB Indirect segment.

Historical experience provides the Company the ability to reasonably estimate the amount of product sales that customers will return.

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Taken / Written Off Balance at End

Fiscal year ended January 31, 2026 $ 1,220 $ 3,786 $ ( 3,978 ) $ 1,028

Fiscal year ended February 1, 2025 1,338 8,180 ( 8,298 ) 1,220

Fiscal year ended February 3, 2024 1,700 9,376 ( 9,738 ) 1,338

Fiscal year ended January 28, 2023 1,582 12,320 ( 12,101 ) 1,801

The Company establishes an allowance for doubtful accounts based on historical experience and customer-specific identification and believes that collections of receivables, net of the allowance for doubtful accounts, are reasonably assured.

The allowance for doubtful accounts was approxima tel y $ 1.1 million as of February 1, 2025 and February 3, 2024, respectively.

The allowance for doubtful accounts was approxima tel y $ 0.5 million and $ 0.8 million as of January 31, 2026 and February 1, 2025, respectively.

The provision for doubtful accounts is based upon the likelihood of default expected during the life of the receivable.

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Operating right-of-use assets are based on the lease liability adjusted for prepaid rent, deferred rent, and tenant allowances received from certain of the Company’s landlords, primarily for its retail store locations.

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

Operating lease liabilities are amortized based upon the effective interest method.

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Variable rent expense is recognized in the period incurred.

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

Operating right-of-use assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.

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Selling, general, and administrative expenses also include store operating costs, store employee compensation, and store occupancy and supply costs.

Goodwill and Other Intangible Assets

Identifiable intangible assets consisted of the Pura Vida brand and customer relationships.

Goodwill was fully impaired during fiscal 2023, leaving no balance.

Our Pura Vida brand, an indefinite-lived asset, is not amortized but assessed for impairment at least annually or whenever events or circumstances indicate that the brand may be impaired.

The Pura Vida customer relationship, a definite-lived intangible asset, is amortized over its estimated useful life and is also subject to impairment testing, similar to the Company’s other long-lived assets.

We test the Pura Vida brand for impairment annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired.

Our annual impairment test may be completed through a qualitative assessment to determine if the fair value of the Pura Vida brand is more likely than not greater than the carrying amount.

If we elect to bypass the qualitative assessment, or if a qualitative assessment indicates it is more likely than not that the estimated carrying value exceeds the fair value, we test for impairment using a quantitative process.

Our quantitative process includes comparing the carrying value to the fair value of the Pura Vida brand, with any excess recognized as an impairment loss.

Fair value is estimated using a relief-from-royalty method.

The estimates and assumptions used in the determination of the fair value of the Pura Vida brand include the projected revenue growth, long-term growth rate, the royalty rate, and discount rate.

Prior to fiscal 2024, the Company performed an annual impairment test for its goodwill.

The Pura Vida brand was fully impaired during fiscal 2025, leaving no balance.

For the annual impairment analysis performed in the second quarter of fiscal 2025, the Company performed a quantitative analysis and no impairment was recorded.

Subsequent to the annual impairment test, the Company performed an additional quantitative analysis of the carrying value of the Pura Vida brand due to triggering events and recorded an impairment charge of $ 6.2 million during the fourth quarter of fiscal 2025, further described in Note 15 herein.

For the annual impairment analysis performed during fiscal 2024, the Company performed a quantitative analysis, as well as subsequent analyses due to triggering events, further described in Note 15 of the Notes to the Consolidated Financial Statements herein.

An impairment charge of $ 5.4 million was recorded during fiscal 2024 for the Pura Vida brand.

For the annual impairment analysis performed during fiscal 2023, the Company performed a quantitative analysis, as well as subsequent analyses due to triggering events, further described in Note 15 herein.

Impairment charges of $ 44.3 million and $ 25.0 million were recorded during fiscal 2023 for goodwill and the Pura Vida brand, respectively.

Redeemable Noncontrolling Interest

On July 16, 2019, as contemplated by the Interest Purchase Agreement, the Company and certain of its subsidiaries and the owners of the remaining twenty-five percent ( 25 %) ownership interest in Pura Vida (the “Sellers”) which was not acquired by the Company (the “Remaining Pura Vida Interest”) entered into a Put/Call Agreement (the “Put/Call Agreement”).

Pursuant to the Put/Call Agreement, and subject to the terms and conditions thereof, the Sellers had the

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

right to sell all of the Remaining Pura Vida Interest to the Company, and the Company had the right to purchase all of the Remaining Pura Vida Interests from Sellers, in each case generally at any time following the fifth anniversary of the closing date of the transaction until the tenth anniversary thereof.

The purchase price for any Remaining Pura Vida Interest put to, or called by, the Company was determined based on the arithmetic average of a multiple of adjusted EBITDA of Pura Vida and a multiple of adjusted EBITDA of the Company, as defined in the Put/Call Agreement, over the twelve-month period ending on the last day of the month immediately preceding the month in which an exercise notice was delivered by a relevant party.

In the event of a change in control of the Company, the parties had the right to exercise a portion of their put and call rights prior to the fifth anniversary of the closing date (as defined in the Put/Call Agreement).

As a result of this redemption feature, the Company recorded the noncontrolling interest as redeemable and classified it in temporary equity within its Consolidated Balance Sheets initially at its acquisition-date fair value.

The noncontrolling interest was adjusted each reporting period for income (or loss) attributable to the noncontrolling interest.

A measurement period adjustment, if any, was then made to adjust the noncontrolling interest to the higher of the redemption value or carrying value each reporting period.

These adjustments were recognized through retained earnings and were not reflected in net income or net income attributable to Vera Bradley, Inc.

When calculating earnings per share attributable to Vera Bradley, Inc., the Company adjusted net income attributable to Vera Bradley, Inc.

for the measurement period adjustment to the extent the redemption value exceeds the fair value of the noncontrolling interest on a cumulative basis.

The fair value of the noncontrolling interest was estimated using a combination of the income approach, a discounted cash flow analysis, and the market approach, utilizing the guideline company method.

The reporting unit’s discounted cash flow analysis required significant management judgment with respect to revenue, total direct costs, selling, general, and administrative expenses, capital expenditures, and the selection and use of an appropriate discount rate.

The projected revenue and expense assumptions and capital expenditures were based on our annual and long-term business plans.

Discount rates reflected market-based estimates of the risks associated with the projected cash flows directly resulting from the use of those assets in operations.

On January 23, 2023, the Company and certain of its subsidiaries entered into an Interest Purchase Agreement (the “Interest Purchase Agreement”) with Creative Genius Holdings, Inc.

a California corporation, Creative Genius Investments, Inc., a California corporation, Griffin Thall and Paul Goodman (collectively “Sellers”) to purchase the remaining 25 % of the outstanding membership interests (the "Remaining Pura Vida Interests") of Pura Vida.

The closing date of the Transaction was January 30, 2023.

Pursuant to the Interest Purchase Agreement, and subject to the terms and conditions thereof, on the closing date, the Company indirectly acquired the Remaining Pura Vida Interests (the “Transaction”) in exchange for cash consideration consisting of approximately $ 10 million payable at closing, subject to certain adjustments.

The Transaction was not subject to financing conditions.

The Company’s existing available cash and cash equivalents funded the purchase price.

Following completion of the Transaction, the Company owned one hundred percent ( 100 %) of the ownership interests in Pura Vida.

The Interest Purchase Agreement also included certain non-competition and customer, supplier and employee non-solicitation and non-interference covenants from the Sellers in favor of the Company during the four-year period beginning on the closing date of the Transaction.

The Interest Purchase Agreement provides that, as of the closing of the Transaction, all rights and obligations of the Company and the Sellers under any agreements among the parties, including the Put/Call Agreement, were terminated.

As a result of the Transaction, the Company recorded a decrease to redeemable noncontrolling interest of $ 10.7 million.

The difference between the fair value of the consideration paid and the balance of the redeemable noncontrolling interest resulted in $ 0.7 million recognized in additional paid-in capital (“APIC”) during fiscal 2024.

In addition, there was an APIC adjustment of $ 0.6 million related to deferred income taxes for the purchase of the redeemable noncontrolling interest.

The total APIC adjustment for this matter during fiscal 2024 was $ 1.3 million.

Stock-Based Compensation

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Advertising Costs

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

The Company expenses advertising costs at the time the promotion first appears in media, in stores, or on its websites, and includes those costs in selling, general, and administrative expenses in the Consolidated Statements of Operations.

Total advertising expense was as follows (in thousands):

Fiscal year ended January 31, 2026

Fiscal year ended February 1, 2025

Fiscal year ended February 3, 2024

Fiscal year ended January 28, 2023

Fair Value of Financial Instruments

5 unchanged sentences

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 Consolidated Balance Sheets for cash and cash equivalents, accounts receivable, and accounts payable as of February 1, 2025 and February 3, 2024, approximated their fair values.

The following table details the fair value measurements of the Company’s investments as of February 1, 2025 and February 3, 2024 (in thousands):

The carrying amounts reflected on the Consolidated Balance Sheets for cash and cash equivalents, accounts receivable, and accounts payable as of January 31, 2026 and February 1, 2025, approximated their fair values.

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

The following table details the fair value measurements of the Company’s investments as of January 31, 2026 and February 1, 2025 (in thousands):

Level 1 Level 2 Level 3

February 1, 2025 February 3, 2024 February 1, 2025 February 3, 2024 February 1, 2025 February 3, 2024

January 31, 2026 February 1, 2025 January 31, 2026 February 1, 2025 January 31, 2026 February 1, 2025

Cash equivalents (1)

$ — $ 15,000 $ — $ — $ — $ —

Contingent consideration related to sale of business (2)

— — — — 1,835 —

(1) Cash equivalents primarily represent money market funds that have a maturity of three months or less at the date of purchase.

Due to its short maturity, the Company believes the carrying value approximates fair value.

(2) Recorded with the sale of Creative Genius.

Refer to Note 16 herein for additional information.

The Company assesses potential impairments to its long-lived assets, which includes property, plant, and equipment and lease right-of-use assets, on a quarterly basis or whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable.

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Level 3 inputs are derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The Company recorded $ 2.6 million and $ 1.4 million in impairment charges primarily related to store assets including property, plant, and equipment and lease right-of-use assets during the fiscal years ended February 1, 2025, and January 28, 2023, respectively.

The Company recorded $ 1.0 million and $ 2.4 million in impairment charges primarily related to store assets including property, plant, and equipment and lease right-of-use assets during the fiscal years ended January 31, 2026, and February 1, 2025, respectively.

No impairment charges were recorded in fiscal 2024 for long-lived assets.

Assets recognized or disclosed at fair value on the consolidated financial statements on a nonrecurring basis include items such as property, plant, and equipment, including leasehold improvements, and operating lease assets, as well as assets related to the Pura Vida acquisition including goodwill and intangible assets.

These assets are measured at fair value if determined to be impaired.

Refer to Note 15 herein regarding the Pura Vida Brand impairment test and related

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

impairment charges for fiscal 2025 and fiscal 2024, as well as the Pura Vida Brand and goodwill impairment test and impairment charges for fiscal 2023.

The discounted cash flow models used to estimate the applicable fair values involve numerous estimates and assumptions that are highly subjective.

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When necessary, a valuation allowance is recorded to reduce the deferred tax assets to their anticipated realizable value.

In fiscal 2025, the Company recorded a full valuation allowance against its net deferred tax assets.

In fiscal 2025, the Company recorded a full valuation allowance against its net deferred tax assets, and continues to maintain a full valuation allowance against its net deferred tax assets as of the end of fiscal 2026 based on the weight of available evidence.

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

The Company establishes liabilities for uncertain positions taken or expected to be taken in income tax returns, using a more-likely-than-not recognition threshold.

5 unchanged sentences

The amortization expense is recorded within selling, general, and administrative expenses in the Company's Consolidated Statements of Operations, which is within the same line item as the related hosting fees.

The balance of the unamortized CCA implementation costs totaled $ 0.6 million and $ 3.8 million as of February 1, 2025 and February 3, 2024, respectively.

Of this total, $ 0.4 million and $ 2.8 million was recorded within prepaid expenses and other current assets and $ 0.2 million and $ 1.0 million was recorded within other assets on the Company's Consolidated Balance Sheets as of February 1, 2025 and February 3, 2024, respectively.

The balance of the unamortized CCA implementation costs totaled $ 0.4 million and $ 0.6 million as of January 31, 2026 and February 1, 2025, respectively.

Of this total, $ 0.2 million and $ 0.4 million was recorded within prepaid expenses and other current assets and $ 0.2 million and $ 0.2 million was recorded within other assets on the Company's Consolidated Balance Sheets as of January 31, 2026 and February 1, 2025, respectively.

In the fourth quarter of fiscal 2025, the Company recorded a software abandonment charge of $ 1.1 million.

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Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, "Improvements to Reportable Segment Disclosures".

This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss.

This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources.

The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements.

The Company adopted the ASU during the year ended February 1, 2025 and the impact of the ASU was limited to financial statement footnote disclosures.

Refer to Note 17 herein.

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

In December 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures".

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The new standard is effective for fiscal years beginning after December 15, 2024 (the Company's fiscal year 2026), with retrospective application permitted.

The Company is currently evaluating this guidance to determine the impact on its disclosures;

however, adoption will not impact our consolidated financial statements.

The Company adopted the ASU retrospectively during the year ended January 31, 2026.

The adoption expanded the Company's income tax disclosure and did not impact the Company's consolidated financial statements.

Refer to Note 7 herein.

In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2024-03, "Disaggregation of Income Statement Expenses".

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Disaggregation of Revenue

The following presents the Company's net revenues disaggregated by product category for the fifty-two weeks ended February 1, 2025 and January 28, 2023, and fifty-three weeks ended February 3, 2024 (in thousands):

The following presents the Company's net revenues disaggregated by product category for the fifty-two weeks ended January 31, 2026 and February 1, 2025, and fifty-three weeks ended February 3, 2024 (in thousands):

Fifty-Two Weeks Ended

February 1, 2025

VB Direct Segment VB Indirect Segment Pura Vida Segment Total

January 31, 2026

VB Direct Segment VB Indirect Segment Total

Product categories

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(2) Primarily includes net revenues from licensing agreements, freight, and merchandising.

(3) Related to freight.

(3) Net revenues were related to product sales recognized at a point in time.

(4) $ 39.7 million of net revenues related to product sales recognized at a point in time and $ 2.2 million of net revenues related to sales-based royalties recognized over time.

Fifty-Three Weeks Ended

Fifty-Two Weeks Ended

February 1, 2025

VB Direct Segment VB Indirect Segment Pura Vida Segment Total

VB Direct Segment VB Indirect Segment Total

Product categories

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(2) Primarily includes net revenues from licensing agreements, freight, and merchandising.

(3) Related to freight.

(3) Net revenues were related to product sales recognized at a point in time.

2 unchanged sentences

Notes to Consolidated Financial Statements

Fifty-Two Weeks Ended

January 28, 2023

VB Direct Segment VB Indirect Segment Pura Vida Segment Total

Fifty-Three Weeks Ended

February 3, 2024

VB Direct Segment VB Indirect Segment Total

Product categories

4 unchanged sentences

Apparel/Footwear 16,526 2,461 18,987

12,701 2,236 3,844 18,781

Other 7,235 (1) 3,242 (2) 10,477

2 unchanged sentences

(2) Primarily includes net revenues from licensing agreements, freight, and merchandising.

(3) Related to freight.

(3) Net revenues were related to product sales recognized at a point in time.

(4) $ 71.4 million of net revenues related to product sales recognized at a point in time and $ 2.4 million of net revenues related to sales-based royalties recognized over time.

(6) Includes mask sales.

Contract Balances

Contract liabilities as of February 1, 2025 and February 3, 2024, were $ 2.4 million and $ 2.6 million, respectively.

The balance consisted of unredeemed gift cards, unearned revenue related to the monthly bracelet subscription of the Pura Vida segment, Pura Vida loyalty club points, and Pura Vida customer deposits and payments collected before shipment.

Contract liabilities as of January 31, 2026 and February 1, 2025, were $ 1.6 million and $ 1.7 million, respectively.

The balance consisted of unredeemed gift cards.

These contract liabilities are recognized within other accrued liabilities on the Company’s Consolidated Balance Sheets.

Substantially all contract liabilities are recognized within one year.

The Company did no t have contract assets as of February 1, 2025 and February 3, 2024.

The balance for accounts receivable from contracts with customers, net of allowances, as of February 1, 2025 and February 3, 2024 was $ 14.2 million and $ 16.4 million, respectively, which is recognized within accounts receivable, net, on the Company’s Consolidated Balance Sheets.

The provision for doubtful accounts was $ 1.1 million as of February 1, 2025 and February 3, 2024, respectively.

The Company did no t have contract assets as of January 31, 2026 and February 1, 2025.

The balance for accounts receivable from contracts with customers, net of allowances, as of January 31, 2026 and February 1, 2025 was $ 16.4 million and $ 13.3 million, respectively, which is recognized within accounts receivable, net, on the Company’s Consolidated Balance Sheets.

The provision for doubtful accounts was $ 0.5 million and $ 0.8 million as of January 31, 2026 and February 1, 2025, respectively.

The provision for doubtful accounts is based upon the likelihood of default expected during the life of the receivable.

Performance Obligations

The performance obligations for the VB Direct, VB Indirect, and Pura Vida segments include the promise to transfer distinct goods (or a bundle of distinct goods).

The performance obligations for the VB Direct and VB Indirect segments include the promise to transfer distinct goods (or a bundle of distinct goods).

The VB Indirect segment also includes the right to access intellectual property (“IP”) related to the Vera Bradley brand.

Remaining Performance Obligations

The Company does not have remaining performance obligations in excess of one year or contracts that it does not have the right to invoice as of February 1, 2025.

The Company does not have remaining performance obligations in excess of one year or contracts that it does not have the right to invoice as of January 31, 2026.

Significant Judgments

Product Sales

In the Vera Bradley and Pura Vida retail stores (recognized within the VB Direct segment and the Pura Vida segments), control is transferred and net revenue is recognized at the point of sale.

Product shipments for the Company’s e-commerce channels (recognized within the VB Direct and Pura Vida segments) and shipments to its wholesale retailers (recognized within the VB Indirect segment and Pura Vida segment) are generally shipped Free on Board (“FOB”) shipping point

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

typically from its distribution center in Roanoke, Indiana, for Vera Bradley products and primarily from its third-party fulfillment center in Tijuana, Mexico for Pura Vida products.

In the Vera Bradley retail stores (recognized within the VB Direct segment), control is transferred and net revenue is recognized at the point of sale.

Product shipments for the Company’s e-commerce channels (recognized within the VB Direct segment) and shipments to its wholesale retailers (recognized within the VB Indirect segment) are generally shipped Free on Board (“FOB”) shipping point typically from its distribution center in Roanoke, Indiana.

Net revenue is recognized upon shipment consistent with when control is transferred to the customer.

Upon shipment, the customer has the right to direct the use of, and obtain substantially all of the benefits from, the product.

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

Licensing Royalties

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Concentration of Credit Risk

Five customers represente d approximately 66.0 % of the balance of accounts receivable, net as of February 1, 2025.

Five customers represente d approximately 64.0 % of the balance of accounts receivable, net as of January 31, 2026.

Vera Bradley, Inc.

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Nature of Leases

The Company has operating leases at all of its Vera Bradley and Pura Vida retail stores (including storage spaces), as well as for its New York office, the California Pura Vida office, Asia sourcing office, and showrooms.

The Company has operating leases at all of its retail stores (including storage spaces), as well as for its New York office, Asia sourcing office, and showrooms.

The Company does not have residual value guarantees, restrictions, or covenants imposed by leases.

Determination of Lease Terms

Retail store leases have remaining terms of up to 10 years as of February 1, 2025.

Retail store leases have remaining terms of up to 9 years as of January 31, 2026.

These leases generally have early termination rights when certain sales thresholds are not met for a specified measurement period.

The Company's other leases generally have remaining terms of up to approximately two years as of February 1, 2025.

The Company's other leases generally have remaining terms of up to approximately one year as of January 31, 2026.

If the lease contains a renewal period at the Company's option, the renewal period is included in the lease term if determined the option is reasonably certain to be exercised at lease commencement.

The Company's lease options generally do not include termination rights other than those mentioned.

The Company did not have financing leases as of February 1, 2025.

The Company did not have financing leases as of January 31, 2026.

Variable Rental Payments

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Discount Rate

The weighted-average discount rate as of February 1, 2025 and February 3, 2024, was 5.0 % and 4.8 %, respectively.

The weighted-average discount rate as of January 31, 2026 and February 1, 2025, was 5.1 % and 5.0 %, respectively.

The discount rate is not readily determinable in the lease;

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Leases Not Yet Commenced

As of February 1, 2025, there were no executed leases in which the Company did not have control of the underlying asset.

As of January 31, 2026, there were no executed leases in which the Company did not have control of the underlying asset.

Practical Expedients (Policy Elections)

5 unchanged sentences

Amounts Recognized in the Consolidated Financial Statements

The following lease expense is recorded within cost of sales for the Asia sourcing office and within selling, general, and administrative expenses for all other leases, including retail store leases, in the Company's Consolidated Statements of Operations for the fiscal years ended February 1, 2025, February 3, 2024, and January 28, 2023 (in thousands):

Fifty-Two Weeks Ended Fifty-Three Weeks Ended Fifty-Two Weeks Ended

February 1, 2025 February 3, 2024 January 28, 2023

The following lease expense is recorded within cost of sales for the Asia sourcing office and within selling, general, and administrative expenses for all other leases, including retail store leases, in the Company's Consolidated Statements of Operations for the fiscal years ended January 31, 2026, February 1, 2025, and February 3, 2024 (in thousands):

Fifty-Two Weeks Ended Fifty-Two Weeks Ended Fifty-Three Weeks Ended

January 31, 2026 February 1, 2025 February 3, 2024

Operating lease cost $ 24,660 $ 25,635 $ 24,926

5 unchanged sentences

(1) Related to the sublease of a former Company location.

The weighted-average remaining lease term as of February 1, 2025 and February 3, 2024 was 4.8 years and 5.3 years , respectively.

The weighted-average remaining lease term as of January 31, 2026 and February 1, 2025 was 4.0 years and 4.7 years, respectively.

Supplemental operating cash flow information was as follows (in thousands):

Fifty-Two Weeks Ended Fifty-Three Weeks Ended Fifty-Two Weeks Ended

February 1, 2025 February 3, 2024 January 28, 2023

Fifty-Two Weeks Ended Fifty-Two Weeks Ended Fifty-Three Weeks Ended

January 31, 2026 February 1, 2025 February 3, 2024

Cash paid for amounts included in the measurement of operating lease liabilities $ 27,707 $ 29,090 $ 28,565

Right-of-use assets increase as a result of new and modified operating lease liabilities, net (1)

$ 8,470 $ 31,771 $ 9,858

(1) $ 2.2 million of lease liabilities were recorded within accounts payable on the Company's Consolidated Balance Sheets as of January 31, 2026, and were subsequently paid in the first quarter of fiscal 2027.

Maturity Analysis of Operating Lease Liabilities

Maturities of the Company's operating lease liabilities (undiscounted) reconciled to its lease liability as of February 1, 2025 were as follows (in thousands):

Maturities of the Company's operating lease liabilities (undiscounted) reconciled to its lease liability as of January 31, 2026 were as follows (in thousands):

Operating Leases

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Depreciation and amortization expense associated with property, plant, and equipment, excluding impairment charges (in thousands):

Fiscal year ended January 31, 2026 $ 7,679

Fiscal year ended February 1, 2025 7,995

Fiscal year ended February 3, 2024 7,445

Fiscal year ended January 28, 2023 8,854

As of February 1, 2025 and February 3, 2024, the Company had no borrowings outstanding and availability of $ 75.0 million under its Credit Agreement.

As of January 31, 2026 and February 1, 2025, the Company had no borrowings outstanding under its Credit Agreement and availability of $ 58.6 million and $ 75.0 million, respectively.

Availability under the Credit Agreement is driven by a borrowing base comprised primarily of eligible accounts receivable and inventory, each subject to advance rates, eligibility criteria, and applicable reserves.

As a result, borrowing capacity may fluctuate based on the level and quality of receivables and the composition and valuation of inventory.

Credit Agreement

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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.

Amounts outstanding under the Credit Agreement bear interest at a per annum rate equal to (i) for CBFR borrowings (including swingline loans), the CB Floating Rate, where the CB Floating Rate is the greater of the prime rate or 2.5 %, plus the Applicable Rate, where the Applicable Rate is a percentage spread ranging from - 1.25 % to - 1.50 %, (ii) for each Term Benchmark Borrowing, the Adjusted Term SOFR Rate, where the Adjusted Term SOFR Rate is the Term SOFR rate for such interest period plus 0.10 % for the interest period in effect for such borrowing, plus the Applicable Rate, where the Applicable Rate is a percentage ranging from 1.25 % to 1.50 %, or (iii) for RFR Loans, the Adjusted Daily Simple SOFR Rate, where the adjusted Daily Simple SOFR Rate is equal to the Daily Simple SOFR plus 0.10 %, plus the Applicable Rate, where the Applicable Rate is a percentage ranging from 1.25 % to 1.50 % The applicable CB Floating Rate, Adjusted Term SOFR Rate, Term SOFR Rate, Daily Simple SOFR, and Adjusted Daily Simple SOFR shall be determined by the administrative agent.

The Credit Agreement also requires VBD to pay a commitment fee for the unused portion of the revolving facility of up to 0.30 % per annum.

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

administrative agent.

The Credit Agreement also requires VBD to pay a commitment fee for the unused portion of the revolving facility of up to 0.30 % per annum.

VBD’s obligations under the Credit Agreement are guaranteed by the Company and the Named Subsidiaries.

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and (viii) a change in control (as defined in the Credit Agreement).

On October 21, 2025, VBD amended the agreement to include, among other things:

(i) permit the sale of certain real property assets without requiring the application of the proceeds from such sale to be used to repay amounts outstanding under the Credit Agreement, (ii) remove the prohibition against sale and leaseback transactions and (iii) increase the amount of Company assets permitted to be disposed of in any fiscal year outside the ordinary course of business from $ 5,000,000 to $ 10,000,000 .

The Credit Agreement matures in May 2028.

Refer to Note 18 herein for information related to the Fourth Amendment to the Credit Agreement, occurring subsequent to the Company's fiscal year 2025.

The components of the income tax expense (benefit) were as follows (in thousands):

The components of the income tax expense were as follows (in thousands):

2026 February 1,

2024 January 28,

2025 February 3,

Federal $ — $ 52 $ 522

Foreign 19 337 562

State 285 373 457

Foreign 18 19 337

303 444 1,316

2 unchanged sentences

— 4,895 2,366

Total income tax expense (benefit) $ 20,950 $ 3,494 $ ( 15,640 )

A breakdown of the Company’s (loss) income before income taxes is as follows (in thousands):

Total income tax expense $ 303 $ 5,339 $ 3,682

A breakdown of the Company’s (loss) income from continuing operations before income taxes is as follows (in thousands):

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

2026 February 1,

2024 January 28,

2025 February 3,

Domestic $ ( 32,545 ) $ ( 28,215 ) $ 10,105

Foreign 171 175 2,173

Total (loss) income before income taxes $ ( 41,238 ) $ 11,332 $ ( 95,024 )

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

A reconciliation of the income tax expense (benefit) to the amount computed at the federal statutory rate is as follows (in thousands):

Total (loss) income from continuing operations before income taxes $ ( 32,374 ) $ ( 28,040 ) $ 12,278

A reconciliation of the income tax expense to the amount computed at the federal statutory rate is as follows (in thousands):

2026 February 1,

2024 January 28,

2025 February 3,

Federal taxes at statutory rate $ ( 6,798 ) 21.0 % $ ( 5,888 ) 21.0 % $ 2,578 21.0 %

State and local income taxes, net of federal benefit (1)

Impact related to redeemable noncontrolling interest — — — — 4,126 ( 4.3 )

Change in valuation allowance 29,751 ( 72.1 ) — — — —

(Windfall) shortfall from stock-based compensation ( 18 ) — ( 47 ) ( 0.4 ) 271 ( 0.3 )

Impact of foreign rate differential 19 — ( 109 ) ( 1.0 ) ( 167 ) 0.2

Change in uncertain tax positions 3 — ( 30 ) ( 0.3 ) ( 15 ) —

Non-deductible executive compensation 316 ( 0.8 ) 487 4.3 1,150 ( 1.2 )

Other 161 ( 0.4 ) 59 0.5 13 —

Total income tax expense (benefit) $ 20,950 ( 50.8 ) % $ 3,494 30.8 % $ ( 15,640 ) 16.5 %

260 ( 0.8 ) 290 ( 1.0 ) 765 6.2

Changes in valuation allowances 6,070 ( 18.8 ) 10,508 ( 37.5 ) — —

Foreign tax effects 18 ( 0.1 ) 19 ( 0.1 ) ( 109 ) ( 0.9 )

Non-taxable and non-deductible items (2)

763 ( 2.4 ) 297 ( 1.1 ) 442 3.6

Changes in unrecognized tax benefits ( 35 ) 0.1 3 — ( 30 ) ( 0.2 )

Other permanent items 25 ( 0.1 ) 110 ( 0.4 ) 36 0.3

Total income tax expense $ 303 ( 1.1 ) % $ 5,339 ( 19.1 ) % $ 3,682 30.0 %

(1) The state and local jurisdictions that make up the majority (greater than 50%) of the tax effect in this category are North Carolina, Massachusetts, and Texas.

(2) Non-taxable and non-deductible items primarily relate to non-deductible executive compensation and stock-based compensation.

Cash income taxes paid, net of refunds, were as follows for the fiscal year ended January 31, 2026 (in thousands):

Jurisdiction:

Total cash income taxes paid $ 65

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

Cash income taxes paid to individual jurisdictions that represent more than 5% of total cash income taxes paid are disclosed separately below:

California ( 100 )

North Carolina 23

Pennsylvania ( 73 )

Total $ ( 25 )

Deferred income taxes reflect the net tax effects of temporary differences between the book and tax bases of assets and liabilities.

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Inventories 2,239 1,087

Investment in subsidiary 13,304 12,904

Net operating loss carryforwards 35,281 7,211

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Based on this assessment, t he Company recorded a full valuation allowance against its net deferred tax assets as of February 1, 2025.

As of February 3, 2024, there were an immaterial amount of valuation allowances recorded.

The Company continues to maintain a full valuation allowance as of January 31, 2026, based on the weight of available evidence.

Vera Bradley, Inc.

1 unchanged sentence

Uncertain Tax Positions

A reconciliation of the beginning and ending gross amount of unrecognized tax benefits (excluding interest and penalties) is as follows (in thousands):

2025 February 3,

2024 January 28,

Beginning balance $ 39 $ 73 $ 92

Net increases in unrecognized tax benefits as a result of current year activity — — 2

Lapse of statute of limitations — ( 34 ) ( 21 )

Ending balance $ 39 $ 39 $ 73

As of February 1, 2025, the Company had an immaterial amount of total unrecognized tax benefits, net of federal benefit, that would, if recognized, favorably affect the effective tax rate in future periods.

Total unrecognized tax benefits are currently expected to decrease by approximately $ 37.0 thousand in the next twelve months.

The Company recognized an immaterial amount of interest only, no penalties, related to unrecognized tax benefits in the fiscal years ended January 28, 2023 and January 29, 2022.

There was an immaterial amount of total unrecognized tax benefits, net of federal benefit, for the fiscal years ended January 31, 2026, February 1, 2025, and February 3, 2024, respectively.

Unrecognized tax benefits are included within other long-term liabilities in the Company's Consolidated Balance Sheets.

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The Company’s stock-based compensation consists of awards of restricted stock and restricted stock units.

The Company recognized stock-based compensation expense of $ 3.7 million, $ 2.9 million, and $ 3.2 million in the fiscal years ended February 1, 2025, February 3, 2024, and January 28, 2023, respectively.

The Company recognized stock-based compensation expense of $ 0.9 million, $ 3.7 million, and $ 2.9 million in the fiscal years ended January 31, 2026, February 1, 2025, and February 3, 2024, respectively.

Awards of Restricted-Stock Units

The Company reserved 6,000,000 shares of common stock for issuance or transfer under the 2020 Equity and Incentive Plan, which allows for grants of restricted stock units, as well as other equity awards.

During the fiscal year ended February 1, 2025, the Company granted a total of 755,647 time-based and performance-based restricted stock units to certain employees and non-employee directors under the 2020 Equity and Incentive Plan with an aggregate fair value of $ 5.1 million.

During the fiscal year ended January 31, 2026, the Company granted a total of 3,516,746 time-based and performance-based restricted stock units to certain employees and non-employee directors under the 2020 Equity and Incentive Plan with an aggregate fair value of $ 7.4 million.

The Company determined the fair value of the units based on the closing price of the Company’s common stock on the grant date.

4 unchanged sentences

The Company recognizes the expense relating to these units, net of estimated forfeitures and based on the probable outcome of achievement of the financial targets, on a straight-line basis over the vesting period.

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

The following table summarizes information about restricted-stock units as of and for the year ended February 1, 2025 (units in thousands):

The following table summarizes information about restricted-stock units as of and for the year ended January 31, 2026 (units in thousands):

Restricted Stock Units Performance-based

9 unchanged sentences

Forfeited ( 762 ) 3.44 ( 901 ) 3.64

Nonvested units outstanding at February 1, 2025

Nonvested units outstanding at January 31, 2026

2,383 $ 2.28 215 $ 5.26

As of February 1, 2025, there was $ 4.7 million of total unrecognized compensation cost, net of estimated forfeitures, related to nonvested restricted stock units.

As of January 31, 2026, there was $ 3.6 million of total unrecognized compensation cost, net of estimated forfeitures, related to nonvested restricted stock units.

That cost is expected to be recognized over a weighted average period of 2.1 years, subject to meeting performance conditions.

The total fair value of restricted stock units for which restrictions lapsed (vested) during fiscal 2026 was $ 2.4 million.

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

Commitments and Contingencies

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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 the aggregate, to have a material adverse effect on the Company’s financial condition, results of operations, or cash flows of a particular reporting period.

The Company is subject to other legal proceedings from time to time in the ordinary course of business but does not believe any of these such claims would have a material adverse impact on the Company at this time.

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 buyer’s claim for a purchase price adjustment is improper and barred by the purchase Agreement.

The Company has filed for summary judgment in that action and is awaiting decision from the Court.

At this time, we are not able to estimate a possible loss or range of loss that may result from this matter or to determine whether such loss, if any, would have a material adverse effect on our financial condition or results of operations due to the fact that the Company believes the purchase price adjustment is improper, and is seeking to have it declared as such by a Delaware Court.

The Company believes that it has a number of meritorious legal approaches in defending itself against these claims.

Vera Bradley, Inc.

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Additionally, the Company has the option of making discretionary profit sharing payments to the plan as approved by the board of directors.

As of February 1, 2025, February 3, 2024, and January 28, 2023 , no discret ionary profit sharing payments had been approved.

As of January 31, 2026, February 1, 2025, and February 3, 2024 , no discret ionary profit sharing payments had been approved.

The Company recognizes 401(k) Company contributions within cost of sales for employees related to distribution center, sourcing, and other related functions and selling, general, and administrative expenses for all other employees.

Total Company contributions to the plan were as follows (in thousands):

Fiscal year ended January 31, 2026 $ 1,023

Fiscal year ended February 1, 2025 1,394

Fiscal year ended February 3, 2024 1,770

Fiscal year ended January 28, 2023 1,854

Related-Party Transactions

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The Vera Bradley Foundation for Breast Cancer (the “Foundation”) was founded by one of the Company’s directors, who is also on the board of directors of the Foundation.

The liability associated with commitments to the Foundation was approximately $ 0.2 million as of February 1, 2025 and $ 0.1 million as of February 3, 2024.

The liability associated with commitments to the Foundation was approximately $ 0.1 million as of January 31, 2026 and $ 0.2 million as of February 1, 2025.

The liability consisted of pass-through donations from customers and is included in other accrued liabilities in the Consolidated Balance Sheets.

The associated expense for contributions to the Foundation, which is included in selling, general, and administrative expenses, was as follows (in thousands):

Fiscal year ended January 31, 2026 $ 133

Fiscal year ended February 1, 2025 167

Fiscal year ended February 3, 2024 139

Fiscal year ended January 28, 2023 191

Vera Bradley, Inc.

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Basic net (loss) income per share is computed based on the weighted-average number of shares of common stock outstanding during the period.

Diluted net income per share is computed based on the weighted-average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method.

Diluted net (loss) income per share is computed based on the weighted-average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method.

Dilutive potential common shares include outstanding restricted stock and restricted-stock units.

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2026 February 1,

2024 January 28,

2025 February 3,

Net (loss) income from continuing operations $ ( 32,677 ) $ ( 33,379 ) $ 8,596

Loss from discontinued operations, net of income tax ( 15,163 ) ( 28,809 ) ( 758 )

Net (loss) income ( 47,840 ) ( 62,188 ) 7,838

Net loss attributable to redeemable noncontrolling interest — — ( 19,649 )

Net (loss) income attributable to Vera Bradley, Inc.

$ ( 62,188 ) $ 7,838 $ ( 59,735 )

Weighted-average number of common shares (basic) 27,902 28,935 30,833

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Weighted-average number of common shares (diluted) 27,902 28,935 31,314

Net (loss) income per share attributable to Vera Bradley, Inc.:

Basic $ ( 2.15 ) $ 0.25 $ ( 1.90 )

Diluted $ ( 2.15 ) $ 0.25 $ ( 1.90 )

As of February 1, 2025 and January 28, 2023, all potential common shares were excluded from the diluted share calculation because they were anti-dilutive due to the net loss in the period.

Basic net (loss) income per share:

Continuing operations $ ( 1.17 ) $ ( 1.15 ) $ 0.27

Discontinued operations $ ( 0.54 ) $ ( 1.00 ) $ ( 0.02 )

Basic net (loss) income per share $ ( 1.71 ) $ ( 2.15 ) $ 0.25

Diluted net (loss) income per share:

Continuing operations $ ( 1.17 ) $ ( 1.15 ) $ 0.27

Discontinued operations $ ( 0.54 ) $ ( 1.00 ) $ ( 0.02 )

Diluted net (loss) income per share $ ( 1.71 ) $ ( 2.15 ) $ 0.25

As of January 31, 2026 and February 1, 2025, all potential common shares were excluded from the diluted share calculation because they were anti-dilutive due to the net loss in the period.

As of February 3, 2024, there were an immaterial number of additional shares issuable upon the vesting of restricted stock units that were excluded from the diluted share calculations because they were anti-dilutive.

The diluted share calculations include performance-based restricted stock units for completed performance periods.

On November 29, 2018, the Company's board of directors approved a share repurchase plan (the “2018 Share Repurchase Program”) authorizing up to $ 50.0 million of repurchases of shares of the Company's common stock.

On December 3, 2020, the 2018 Share Repurchase Program was extended through December 11, 2021.

In December 2021, the Company's board of directors approved a new share repurchase plan (the “2021 Share Repurchase Program”) which authorized Company management to utilize up to $ 50.0 million of available cash for repurchases of shares of the Company's common stock.

The 2021 Share Repurchase Program went into effect beginning December 13, 2021 and expired in December 2024.

During the fiscal year ended February 1, 2025, the Company purchased and held 3,395,335 shares at an average price of $ 6.41 per share, excluding commissions, for an aggregate amount o f $ 21.8 million, under the 2021 Share Repurchase Program.

During the fiscal year ended February 3, 2024, the Company purchased and held 359,554 shares at an average price of $ 6.10 per share, excluding commissions, for an aggregate amount of $ 2.2 million, under the 2021 Share Repurchase Program.

During the fiscal year ended January 28, 2023, the Company purchased and held 2,820,949 shares at an average price of $ 6.40 per share, excluding commissions, for an aggregate amount of $ 18.1 million, under the 2018 and 2021 Share Repurchase Programs.

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

During the fourth quarter of fiscal 2025, the Company's board of directors approved a new share repurchase plan (the “2024 Share Repurchase Program”) which authorized Company management to utilize up to $ 30.0 million of available cash for repurchases of shares of the Company's common stock.

In December 2024, the Company's board of directors approved a new share repurchase plan (the “2024 Share Repurchase Program”) which authorized Company management to utilize up to $ 30.0 million of available cash for repurchases of shares of the Company's common stock.

The 2024 Share Repurchase Program went into effect beginning December 14, 2024 and expires in December 2027.

The Company does not currently plan to purchase under the 2024 Share Repurchase Program, but anticipates utilizing it in the future depending on the Company's cash position.

As of February 1, 2025, there was $ 30.0 million remaining available to repurchase shares of the Company's common stock under the 2024 Share Repurchase Program.

As of February 1, 2025, the Company held as treasury share s 15,834,579 s hares of its common stock at an average price of $ 9.90 p er share, excluding commissions, for an aggregate carrying amount o f $ 156.8 million .

The Company’s treasury shares may be issued under the 2020 Equity and Incentive Plan, or for other corporate purposes.

Redeemable Noncontrolling Interest

Redeemable noncontrolling interest represents the remaining twenty-five percent ( 25 %) interest in Pura Vida not acquired by the Company.

On January 30, 2023, the Company purchased the remaining 25 % interest in Pura Vida.

Refer to Note 2 herein for additional information.

Changes in redeemable noncontrolling interest for the fifty-two weeks ended February 1, 2025, fifty-three weeks ended February 3, 2024,and fifty-two weeks ended January 28, 2023 were as follows (in thousan ds):

Balance at January 29, 2022 $ 30,974

Net loss attributable to redeemable noncontrolling interest ( 19,649 )

Distributions to redeemable noncontrolling interest ( 613 )

Balance at January 28, 2023 $ 10,712

Adjustment for purchase of noncontrolling interest ( 10,712 )

Balance at February 3, 2024 and February 1, 2025 $ —

Intangible Assets

The following tables detail the carrying value of the Company’s intangible assets related to the acquisition of a majority interest in Pura Vida.

February 1, 2025

in thousands Gross Basis Accumulated Amortization (1)

Carrying Amount

Definite-lived intangible asset

Customer Relationships $ 24,208 $ ( 24,208 ) $ —

Indefinite-lived intangible asset

Pura Vida Brand (2)

Total intangible assets $ 24,208 $ ( 24,208 ) $ —

(1) Amortization expense is recorded within the Pura Vida segment.

(2) An impairment charge of $ 6.2 million was recorded within the Pura Vida segment during fourth quarter of fiscal 2025.

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

February 3, 2024

in thousands Gross Basis Accumulated Amortization (1)

Carrying Amount

Definite-lived intangible assets

Customer Relationships $ 24,208 $ ( 22,872 ) $ 1,336

Indefinite-lived intangible asset

Pura Vida Brand (2)

6,237 — 6,237

Total intangible assets $ 30,445 $ ( 22,872 ) $ 7,573

(1) Amortization expense is recorded within the Pura Vida segment.

(2) Impairment charges of $ 5.4 million were recorded within the Pura Vida segment during the fourth quarter of fiscal 2024.

Fiscal 2025 Impairment

The Company pe rformed its fiscal 2025 annual impairment test over the indefinite-lived Pura Vida brand during the second quarter of fiscal 2025 and no impairment was recorded.

In the fourth quarter of fiscal 2025, the Company identified triggering events and determined that the fair value of the Pura Vida brand was less than its carrying value, recording a full impairment charge of $ 6.2 million.

In consideration of offers received for the sale of Pura Vida (see Note 18 herein for further information), the Company performed a quantitative analysis of the Pura Vida brand.

Based on this quantitative assessment, the Company determined that the relative fair value of the Pura Vida brand indicated no fair value and that the Pura Vida brand was not recoverable.

Fiscal 2024 Impairment

The Company pe rformed its fiscal 2024 annual impairment test over the indefinite-lived Pura Vida brand during the second quarter of fiscal 2024 and no impairment was recorded.

In the fourth quarter of fiscal 2024, the Company identified triggering events and determined that the fair value of the Pura Vida brand was less than its carrying value, recording an impairment charge of $ 5.4 million .

The Company continued to experience lower sales from its Pura Vida e-commerce channel due to a continued decline in social and digital media effectiveness, as well as continued lower sales from the wholesale channel.

These lower sales volumes had a negative impact on the fair value determination of the aforementioned assets.

The fair value of the Pura Vida brand was estimated using a relief-from-royalty method.

The estimates and assumptions used in the determination of the fair value of the Pura Vida brand included the projected revenue growth, long-term growth rate, the royalty rate, and discount rate.

While we consider our assumptions in the determination of the fair value of these assets to be reasonable, they are complex and highly subjective.

Our key assumptions (as described above in the valuation methodologies used in the determination of fair value) may be impacted by macroeconomic conditions, including inflationary pressures and the impact on consumer discretionary spending, supply chain challenges, as well as a sustained decline in stock price and potential changes in business strategy.

Refer to Note 2 herein for additional information regarding fair value measurement.

Fiscal 2023 Impairments

The Company performed its fiscal 2023 annual impairment test over goodwill and the indefinite-lived Pura Vida brand during the second quarter of fiscal 2023.

The fair value of the Pura Vida reporting unit was determined using a combination of an income-based approach (discounted cash flows) and a market-based approach (guideline transaction method).

The discounted cash flow method involved subjective estimates and assumptions such as projected revenue growth, operating profit, and the discount rate.

The guideline transaction method involved transaction multiples derived from the acquisition of controlling interests in stocks of companies that are engaged in the same or similar lines of business as the reporting unit.

During the assessment for the fiscal 2023 annual test, it was determined that the fair values of the Pura Vida reporting unit and the Pura Vida brand were less than their carrying values.

As a result, the Company recorded an impairment charge of $ 9.9 million and $ 19.4 million for the Pura Vida brand and goodwill, respectively, during the second quarter of fiscal 2023 within the Pura Vida segment.

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

We identified triggering events during the subsequent quarters of fiscal 2023, due to lower operating profit compared to previous forecasts, as well as changes in the long-range plan such as a pause on the opening of new Pura Vida retail stores.

We performed further testing on the Pura Vida reporting unit and Pura Vida brand as a result.

These analyses caused additional impairment charges to be recorded in the fourth quarter of fiscal 2023 of $ 15.1 million and $ 24.9 million for the Pura Vida brand and goodwill, respectively, which reflects a full goodwill impairment.

Collectively, impairment charges for the Pura Vida brand and goodwill during fiscal 2023 totaled $ 69.3 million.

During the fiscal year ended January 31, 2026, the Company did not purchase any shares under the 2024 Share Repurchase Program.

During the fiscal year ended February 1, 2025, the Company purchased and held 3,395,335 shares at an average price of $ 6.41 per share, excluding commissions, for an aggregate amount of $ 21.8 million, under the 2021 Share Repurchase Program.

As of January 31, 2026, there was $ 30.0 million remaining available to repurchase shares of the Company's common stock under the 2024 Share Repurchase Program.

As of January 31, 2026, the Company held as treasury shares 15,834,579 shares of its common stock at an average price of $ 9.90 per share, excluding commissions, for an aggregate carrying amount of $ 156.8 million.

The Company’s treasury shares may be issued under the 2020 Equity and Incentive Plan, or for other corporate purposes.

Cost Savings Initiatives and Other Charges

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During fiscal 2023, the Company began implementation of its targeted cost reductions, which were expected to be fully realized in fiscal 2025.

In l ate fiscal 2025, additional cost reduction initiatives were identified and are expected to be fully realized in fiscal 2026.

In late fiscal 2025, additional cost reduction initiatives were identified and were fully realized in fiscal 2026.

During fiscal 2026, additional cost reduction 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 t he fifty-two w eeks ended February 1, 2025 (in thousands):

The Company incurred the following charges during t he fifty-two w eeks ended January 31, 2026 (in thousands):

Reportable Segment

VB Direct VB Indirect Pura Vida Unallocated Corporate Expenses Total Expense

VB Direct VB Indirect Unallocated Corporate Expenses Total Expense

Severance charges (1)

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Total $ 17 $ — $ 4,463 $ 4,480

(1) $ 3.1 million recorded in selling, general, and administrative expenses and $ 0.8 million recorded in cost of goods sold

(1) Includes former Chief Executive Officer and Chief Financial Officer severance and is recorded in selling, general, and administrative expenses.

A summary of charges and related liabilities associated with the cost savings initiatives and severance charges are as follows (in thousands):

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Cash payments ( 6,261 )

Liability as of January 31, 2026 $ 744

(1) Remaining liability is recorded within accrued employment costs

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

The Company incurred the following charges during the fifty-two weeks ended February 1, 2025:

Reportable Segment

VB Direct VB Indirect Unallocated Corporate Expenses Total Expense

Severance charges (1)

$ 534 $ 1,166 $ 2,171 $ 3,871

Total $ 534 $ 1,166 $ 2,171 $ 3,871

(1) 3.1 million recorded in selling, general, and administrative expenses and 0.8 million recorded in cost of goods sold

Severance Charges (1)

Liability as of February 3, 2024 $ 541

Fiscal 2025 charges 3,871

Cash payments ( 1,887 )

Liability as of February 1, 2025 $ 2,525

(1) Remaining liability is recorded within accrued employment costs

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Reportable Segment

VB Direct VB Indirect Pura Vida Unallocated Corporate Expenses Total Expense

VB Direct VB Indirect Unallocated Corporate Expenses Total Expense

Severance charges (1)

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$ 574 $ 309 $ 2,056 $ 2,939

$ 574 $ 309 $ 79 $ 2,056 $ 3,018

(1) Includes former CFO severance

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(3) Charges are recorded within selling, general, and administrative expenses

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

Severance Charges (1)

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(1) Remaining liability is recorded within accrued employment costs

The Company incurred the following charges during the fifty-two weeks ended January 28, 2023:

Reportable Segment

VB Direct VB Indirect Pura Vida Unallocated Corporate Expenses Total Expense

Severance charges and cash retention payment acceleration charges (1)

$ 15 $ — $ 422 $ 8,745 $ 9,182

Consulting fees and other costs (2)

302 — 179 3,976 4,457

$ 317 $ — $ 601 $ 12,721 $ 13,639

(1) Includes CEO retirement severance and Vera Bradley brand executive officer severance

(2) Includes $ 3.9 million for fees related to cost savings initiatives and CEO search;

$ 0.3 million for concept brand exit costs;

and $ 0.3 million for certain professional fees

(3) $ 13.4 million of the charges are recorded within selling, general, and administrative expenses and $ 0.2 million are recorded within cost of sales

Severance Charges and Cash Retention Payment Acceleration Charges (1)

Consulting Fees and Other Costs (2)

Fiscal 2023 charges $ 9,182 $ 4,457

Cash payments ( 6,083 ) ( 4,095 )

Non-cash charges and adjustments ( 16 ) ( 302 )

Liability as of January 28, 2023 $ 3,083 $ 60

(1) Remaining liability is recorded within accrued employment costs

(2) Remaining liability is recorded within accounts payable

Other Charges

There were no additional charges recorded during the fifty-two weeks ended February 1, 2025 associated with strategic initiatives and other costs.

During the fifty-three weeks ended February 3, 2024, the Company recorded within selling, general, and administrative expenses $ 0.8 million of professional fees associated with strategic initiatives and other costs.

Collectively, $ 0.2 million was recorded within the Pura Vida segment and $ 0.6 million was recorded within corporate unallocated expenses.

Fiscal 2023 .

During the fifty-two weeks ended January 28, 2023, the Company recorded within cost of sales $ 18.1 million of inventory adjustments which consisted of:

$ 8.9 million of excess Pura Vida inventory recognized in the fourth quarter as a result of a change in the Company’s liquidation strategy during the quarter;

$ 6.4 million related to the exit of certain technology products and excess mask products recognized in the second and fourth quarters;

$ 1.2 million of valuation

Fiscal 2026 and Fiscal 2025.

There were no additional charges recorded during the fifty-two weeks ended January 31, 2026 and February 1, 2025 associated with strategic initiatives and other costs.

During the fifty-three weeks ended February 3, 2024, the Company recorded within selling, general, and administrative expenses $ 0.6 million of professional fees associated with strategic initiatives and other costs, which were recorded within corporate unallocated expenses.

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

adjustments to write discounted inventory down to its net realizable value recognized in the fourth quarter;

and $ 1.6 million for purchase order cancellation fees related to spring 2023 product and certain raw materials.

During the fifty-two weeks ended January 28, 2023, the Company recorded within selling, general, and administrative expenses:

$ 1.0 million for CEO sign-on bonus and relocation expenses;

$ 0.4 million for former CEO salary retention payments and stock-based compensation associated with retirement;

and $ 0.2 million of professional fees associated with strategic initiatives and other costs.

Collectively, $ 6.2 million was recorded within the Direct segment, $ 1.7 million was recorded within the Indirect segment,$ 10.2 million was recorded within the Pura Vida segment, and $ 1.6 million was recorded within corporate unallocated expenses.

Segment Reporting

The Company has three operating segments, which are also its reportable segments:

VB Direct, VB Indirect, and Pura Vida.

The Company has two operating segments, which are also its reportable segments:

VB Direct and VB Indirect.

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.

The VB Direct segment includes Vera Bradley full-line and outlet stores, the Vera Bradley websites (verabradley.com, outlet.verabradley.com, and international.verabradley.com), and the Vera Bradley annual outlet sale.

Revenues generated through this segment are driven through the sale of Vera Bradley-branded products from Vera Bradley to end consumers.

The VB Indirect segment represents revenues generated through the distribution of Company-branded products to specialty retailers representing approximate ly 1,200 locatio ns, substantially all of which are located in the United States, as well as select department stores, national accounts, third-party e-commerce sites, third-party inventory liquidators, and licensing agreements related to the Vera Bradley bran d.

The Pura Vida segment represents revenues generated through the Pura Vida website (www.puravidabracelets.com), Pura Vida retail stores, and through the distribution of Pura Vida-branded products to wholesale retailers, substantially all of which are located in the United States.

The VB Indirect segment represents revenues generated through the distribution of Company-branded products to specialty retailers representing approximate ly 1,000 locatio ns, substantially all of which are located in the United States, as well as select department stores, national accounts, third-party inventory liquidators, and licensing agreements related to the Vera Bradley bran d.

Corporate costs represent the Company’s administrative expenses, which include, but are not limited to:

human resources, legal, finance, information technology, design, product development, merchandising, corporate-level marketing and advertising, and various other corporate-level-activity-related expenses not directly attributable to a reportable segment.

Income earned under the Transition Services Agreement ("TSA") resulting from the sale of Creative Genius is netted against these unallocated corporate expenses.

All intercompany-related activities are eliminated in consolidation and are excluded from the segment reporting.

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Notes to Consolidated Financial Statements

Net revenues, cost of sales, other segment expenses, and operating income (loss) information for the Company’s reportable segments, as well as a reconciliation to (loss) income before income taxes, consisted of the following (in thousands):

Net revenues, cost of sales, other segment expenses, and operating income information for the Company’s reportable segments, as well as a reconciliation to (loss) income from continuing operations before income taxes, consisted of the following (in thousands):

Fiscal Year Ended

2026 February 1,

2024 January 28,

2025 February 3,

Segment net revenues:

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VB Indirect 41,860 61,186 73,803

Pura Vida 53,172 87,073 98,414

Total $ 269,651 $ 318,795 $ 383,713

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VB Indirect 26,754 34,490 37,815

Pura Vida 25,171 34,625 54,374

Total $ 144,614 $ 159,957 $ 179,748

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VB Indirect 6,524 11,282 11,709

Pura Vida 43,122 54,769 122,631

Total $ 98,133 $ 118,184 $ 117,813

Segment operating income (loss):

Segment operating income:

VB Direct $ 18,322 $ 25,240 $ 61,873

VB Indirect 8,582 15,414 24,279

Pura Vida ( 15,121 ) ( 2,321 ) ( 78,591 )

Total $ 26,904 $ 40,654 $ 86,152

Reconciliation:

Segment operating income (loss):

Segment operating income:

$ 26,904 $ 40,654 $ 86,152

Unallocated corporate expenses ( 58,816 ) ( 69,446 ) ( 74,535 )

Interest income (expense) 1,118 890 ( 153 )

(Loss) income before income taxes $ ( 41,238 ) $ 11,332 $ ( 95,024 )

Interest (expense) income ( 462 ) 752 661

(Loss) income from continuing operations before income taxes $ ( 32,374 ) $ ( 28,040 ) $ 12,278

(1) Other segment expenses, net include selling, general and administrative expenses and are net of other income.

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No customer accounted for 8% or m ore of the Company’s net revenues during fiscal years 2026, 2025, and 2024.

Revenues from external customers for Vera Bradley brand products are attributable to sales of bags, accessories, travel, apparel/footwear, and home items.

Other revenues from Vera Bradley external customers primarily include revenues associated with our freight, stationery, licensing, merchandising, and gift card breakage.

Revenues from external customers for Pura Vida brand products are primarily attributable to sales of accessories and apparel.

Other revenues from Pura Vida external customers include revenues associated with freight.

Refer to Note 3 herein for disaggregation of net revenues by reportable segment.

As of February 1, 2025 and February 3, 2024, substantially all of the Company’s long-lived assets were located in the United States.

As of January 31, 2026 and February 1, 2025, substantially all of the Company’s long-lived assets were located in the United States.

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

Subsequent Event

On March 11, 2025, Vera Bradley Holdings, LLC (“Seller”), Creative Genius, LLC (“Creative Genius”) and Project Aster Acquisition, LLC (“Buyer”) entered into an Interest Purchase Agreement (the “Agreement”) pursuant to which, among other things, Seller will sell to Buyer and Buyer will purchase from Seller one hundred percent ( 100 %) of Creative Genius, which operates under the name Pura Vida Bracelets (the “Transaction”).

The consideration paid by Buyer under the Agreement will consist of cash consideration of $ 1.0 million as well as contingent consideration payable over a two-year period.

Total consideration is subject to customary adjustments for cash, transaction expenses and working capital.

Seller has also agreed to provide certain services to Buyer for a transitional period of 12 months.

In conjunction with the Agreement, on March 11, 2025, Vera Bradley Designs, Inc., a wholly-owned subsidiary of the Seller, JP Morgan 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 asset based revolving Credit Agreement (as amended, the “Credit Agreement”) dated September 7, 2018.

The Fourth Amendment amended the Credit Agreement to, among other things:

allow for the sale of Creative Genius;

remove Creative Genius as a borrower;

modify an additional reporting period based on certain conditions of credit availability;

and change certain applications of the fixed charge coverage ratio.

Discontinued Operations

On March 11, 2025, the Company completed the sale of Creative Genius pursuant to an Interest Purchase Agreement (the “Agreement”) to sell one hundred percent ( 100 %) of Creative Genius, which operates under the name Pura Vida Bracelets.

The sale consummated on March 31, 2025.

In connection with the transaction, the Company received total consideration of $ 3.5 million, consisting of a combination of cash consideration, subject to net working capital and net cash adjustments as well as contingent consideration.

At closing, the Company received cash proceeds of $ 0.9 million, in addition, the Company is entitled to receive contingent consideration with an estimated fair value of $ 2.5 million, based on the present value of expected future payments.

Cash proceeds totaled $ 1.8 million for the fifty-two weeks ended January 31, 2026.

The remaining contingent consideration receivable was $ 1.8 million as of January 31, 2026.

The contingent consideration is calculated as 5% of total sales generated by the divested business, as operated by the buyer, net of customary shipping costs, during the earn-out period specified in the agreement.

The earn-out period and related terms are consistent with customary provisions for transactions of this nature.

The fair value of the contingent consideration was determined using a probability-weighted discounted cash flow analysis based on internal projections of the buyer’s expected future sales.

The fair value measurement is classified as Level 3 within the fair value hierarchy due to the use of unobservable inputs.

The Company will assess changes in the fair value of the contingent consideration at each reporting date, with any adjustments recognized in earnings in the period in which such changes are identified.

The Company recorded a net loss on disposal of $ 15.2 million for the fifty-two weeks ended January 31, 2026.

The loss on sale is presented as part of results of the discontinued operations.

The results of operations for the Pura Vida business is reported as discontinued operations in the Consolidated Statements of Operations for all periods presented.

This business was historically presented as its own reportable segment.

Results of discontinued operations were as follows for the fifty-two weeks ended January 31, 2026 and February 1, 2025, and fifty-three weeks ended February 3, 2024:

Fifty-Two Weeks Ended Fifty-Three Weeks Ended

2026 February 1,

2025 February 3,

Net revenues $ 5,553 $ 53,172 $ 87,073

Cost of sales 2,167 25,171 34,625

Gross profit 3,386 28,001 52,448

Selling, general, and administrative expenses 3,244 35,346 48,210

Impairment of intangible assets — 6,237 5,429

Other (expense) income, net (1)

( 15,305 ) 18 16

Operating loss from discontinued operations ( 15,163 ) ( 13,564 ) ( 1,175 )

Interest income, net — 366 229

Loss from discontinued operations before income taxes ( 15,163 ) ( 13,198 ) ( 946 )

Income tax expense (benefit) — 15,611 ( 188 )

Loss from discontinued operations ( 15,163 ) ( 28,809 ) ( 758 )

(1) Includes $ 15.2 million loss on sale of discontinued operations recorded during the fifty-two weeks ended January 31, 2026.

The Company provides certain transition services to support the divested business in accordance with the Interest Purchase Agreement.

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

The assets and liabilities of the Pura Vida operations have been reflected as assets and liabilities of discontinued operations in the Consolidated Balance Sheet as of February 1, 2025.

The assets and liabilities were as follows:

2026 February 1,

Assets of discontinued operations

Cash and cash equivalents $ — $ 1,738

Accounts receivable, net — 995

Inventories — 18,578

Prepaid expenses and other current assets — 1,050

Total current assets of discontinued operations $ — $ 22,361

Operating right-of-use assets — 3,729

Property, plant, and equipment, net — 1,628

Other assets — 17

Total long-term assets of discontinued operations $ — $ 5,374

Liabilities of discontinued operations

Accounts payable $ — $ 2,584

Accrued employment costs — 562

Short-term operating lease liabilities — 925

Other accrued liabilities — 1,952

Total current liabilities of discontinued operations $ — $ 6,023

Long-term operating lease liabilities — 3,388

Total long-term liabilities of discontinued operations $ — $ 3,388

The following table presents cash flows from operating and investing activities for discontinued operations for the fifty-two weeks ended January 31, 2026 and February 1, 2025, and fifty-three weeks ended February 3, 2024:

Fifty-Two Weeks Ended Fifty-Two Weeks Ended Fifty-Three Weeks Ended

2026 February 1,

2025 February 3,

Cash (used in) provided by operating activities - discontinued operations $ ( 2,115 ) $ ( 226 ) $ 6,017

Cash provided by (used in) investing activities - discontinued operations 2 ( 548 ) ( 13 )

Vera Bradley, Inc.

Notes to Consolidated Financial Statements

Quarterly Financial Data (Unaudited)

The following table presents selected unaudited quarterly financial information for each quarter of fiscal 2026 and fiscal 2025.

Prior year quarterly amounts have been recast to reflect the presentation of the disposed business as discontinued operations related to the sale described in Note 16.

Thirteen Weeks Ended

2025 August 2,

2025 November 1,

2025 January 31,

Net revenues $ 51,652 $ 70,858 $ 62,253 $ 84,888

Gross Profit 22,767 35,497 26,186 40,587

Net (loss) income from continuing operations ( 18,260 ) ( 4,709 ) ( 12,365 ) 2,657

Net (loss) income ( 33,460 ) ( 4,672 ) ( 12,365 ) 2,657

Basic net (loss) income from continuing operations per share $ ( 0.66 ) $ ( 0.17 ) $ ( 0.44 ) $ 0.10

Basic net (loss) income per share ( 1.20 ) ( 0.17 ) ( 0.44 ) 0.10

Diluted net (loss) income from continuing operations per share ( 0.66 ) ( 0.17 ) ( 0.44 ) 0.09

Diluted net (loss) income per share ( 1.20 ) ( 0.17 ) ( 0.44 ) 0.09

Thirteen Weeks Ended

2024 August 3,

2024 November 2,

2024 February 1,

Net revenues $ 67,948 $ 94,003 $ 70,483 $ 86,361

Gross Profit 34,040 46,709 38,417 39,672

Net (loss) income from continuing operations ( 7,604 ) 7,527 ( 13,332 ) ( 19,970 )

Net (loss) income ( 8,121 ) 5,706 ( 12,800 ) ( 46,973 )

Basic net (loss) income from continuing operations per share $ ( 0.25 ) $ 0.26 $ ( 0.47 ) $ ( 0.72 )

Basic net (loss) income per share ( 0.26 ) 0.19 ( 0.46 ) ( 1.69 )

Diluted net (loss) income from continuing operations per share ( 0.25 ) 0.25 ( 0.47 ) ( 0.72 )

Diluted net (loss) income per share ( 0.26 ) 0.19 ( 0.46 ) ( 1.69 )

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data