Vera Bradley (VRA) risk factors, FY2025 10-K

Risks Related to Our Business Operations and Industry

1. 01If we are unable to successfully implement our long-term strategic plans and growth strategies, including Project Restoration, our future operating results could suffer
2. 02and adversely impact our results of operations
3. 03If we are unable to predict and respond in a timely manner to changes in consumer demand, our net revenues and results of operations could be adversely affected
4. 04We may experience declines in comparable sales which could negatively affect the price of our common stock
5. 05If our multi-channel distribution model is not successful, our business and results of operations may suffer
6. 06We may not be able to successfully open new stores and/or operate new and current stores as planned, which could adversely impact our results of operations
7. 07Our business depends on strong brands. If we are unable to execute our marketing strategies, intended to enhance our brands, then revenues and our results of operations could be adversely impacted
8. 08Closing stores could result in significant costs to us
9. 09Our ability to attract customers to our stores depends heavily on the success of the shopping centers in which many of our stores are located
10. 10We are subject to risks associated with leasing substantial amounts of space, including future increases in occupancy costs
11. 11Failure to effectively compete with other retailers for sales could have a material adverse effect on our financial condition, results of operations, and cash flows
12. 12Our wholesale business could suffer as a result of decisions by our wholesale retailers to decrease or eliminate the amount of merchandise purchased from us
13. 13Bankruptcies or other operational or financial difficulties of our wholesale retailers could adversely impact our business

Risks Related to Global Sourcing and Distribution

1. 14We rely on various contract manufacturers to produce all of our products and generally do not have long-term contracts with our manufacturers
2. 15We rely on various suppliers to supply a significant majority of our raw materials
3. 16Distribution operations for Vera Bradley-branded products are currently concentrated in a single, company-owned distribution center in Roanoke, Indiana. Pura Vida-branded products are primarily distributed from one third-party distribution center in Tijuana, Mexico
4. 17The cost of raw materials could increase our cost of sales and cause our results of operations to suffer
5. 18Our business is subject to the risks inherent in global sourcing and manufacturing activities
6. 19Our ability to source our products at favorable prices, or at all, could be harmed, with adverse effects on our results of operations, if new trade restrictions are imposed,, existing trade restrictions become more burdensome, or increased tariffs are implemented
7. 20We rely on independent transportation providers for substantially all of our product shipments
8. 21Losses or disruptions associated with our distribution systems could have a material adverse effect on our business and operations

Risks Related to Information Technology and Security

1. 22A data security or privacy breach could damage our reputation and our relationships with our customers, expose us to litigation risk and adversely affect our business
2. 23Our business could suffer if our computer systems and websites are disrupted or cease to operate effectively
3. 24We are exposed to business risks as a result of our e-commerce operations

Risks Related to Tax and Valuation Matters

1. 25Fluctuations in our tax obligations and effective tax rate may result in volatility of our operating results and stock price
2. 26We have recorded long-lived asset impairment charges in the past and we may record material long-lived asset impairment charges in the future

Risks Related to Legal and Regulatory Matters

1. 27There are claims made against us from time to time that can result in litigation or regulatory proceedings, which could distract management from our business activities and result in significant liability or damage to the images associated with our brands
2. 28Our inability or failure to protect our intellectual property or our infringement of other’s intellectual property could have a negative impact on our operating results
3. 29The success of our Environmental, Social, and Governance (“ESG”) actions may impact the value of our brands

Risks Related to the Securities Markets and Ownership of Our Common Stock

1. 30Our stock price may be volatile or may decline regardless of our operating performance, and you may not be able to resell shares at or above the price at which you purchase them
2. 31These and other factors may result in a lower market price of our common stock, regardless of our actual operating performance
3. 32A limited number of shareholders control a significant percentage of the voting power of our common stock, and therefore investors may have diminished ability to determine the outcome of shareholder votes
4. 33Our business could be negatively affected as a result of the actions of activist shareholders
5. 34Our actual operating results may differ significantly from our guidance, which could cause incongruous fluctuation in our stock price
6. 35Anti-takeover provisions in our organizational documents and Indiana law may discourage or prevent a change in control, even if a sale of the Company would be beneficial to our shareholders, which could cause our stock price to decline and prevent attempts by shareholders to replace or remove our current management

Risks Related to Pandemics

1. 36The outbreak of pandemics, or events related thereto, may cause significant disruptions in our revenue streams, operations, global supply chain and other facets of our business, which may continue to adversely impact our results of operations, financial condition, and share price
2. 37Our results of operations could suffer if we lose key management or design associates or are unable to attract and retain the talent required for our business
3. 38Our results of operations could suffer if we are unable to attract and retain retail and distribution center employees required for our business
4. 39Our results of operations are subject to quarterly fluctuations, which could adversely affect the market price of our common stock
5. 40We may be subject to unionization, work stoppages, slowdowns, or increased labor costs
6. 41We may suffer negative publicity and our business may be harmed if we need to recall any products we sell