Vera Bradley Stock Cut To Neutral From Outperform At Baird

Vera Bradley Inc. shares were downgraded to neutral from outperform at Baird Thursday, after first-quarter earnings missed estimates and the handbag and accessories company lowered its outlook. Analysts said they were encouraged by new management's strategic plan, which aims to improve its product line, distribution and inventory management, but that after a number of downward revisions, its recovery thesis "has not unfolded as expected." Baird said while it is impressed with the pace at which new management has driven change, "the lack of translation to improved top-line trends is disappointing. Meanwhile, continued negative estimate revisions resulting from the weaker-than-expected revenue trends (product cannibalization and significantly lower demand for signature cotton bags) has eroded value support for the stock." Shares, which closed down 14% on Wednesday, were not yet active in premarket trade, but are down 40% in the year so far, while the S&P 500 has gained 2.7%.