Equity Research Focusing on the Consumer Sector, Small Cap Consumer Research

Small Cap Consumer Research

Equity Research Focusing on the Consumer Sector

Small Cap Consumer Research, LLC is a leading company-sponsored equity research provider focusing on the consumer sector (apparel, brand licensing and specialty retailing segments).

Equity Bottom-Up

<ul><li>We are raising our price target for VRA to $7 (from $5), increasing our FY28 EPS to $0.11 (from a loss per share of $0.03) and reiterating our Buy rating after meeting with the management of Vera Bradley in their New York City showroom.</li><li> We believe, after a highly material cleanup of the business model, Vera Bradley has once again regained the support of their core OG customer and is poised, with clean stores and product flows, to drive higher margin revenue and upside.</li><li> While we continue to expect operating results to be “lumpy” in the near term as marketing and expansion plans unfold, we believe momentum is definitely on the upswing at Vera Bradley, and we are comfortable being more aggressive on our FY28 projections and VRA price targets.</li></ul>

We are raising our price target for VRA to $7 (from $5), increasing our FY28 EPS to $0.11 (from a loss per share of $0.03) and reiterating our Buy rating after meeting with the management of Vera Bradley in their New York City showroom. We believe, after a highly material cleanup of the business model, Vera Bradley has once again regained the support of their core OG customer and is poised, with clean stores and product flows, to drive higher margin revenue and upside. While we continue to expect operating results to be “lumpy” in the near term as marketing and expansion plans unfold, we believe momentum is definitely on the upswing at Vera Bradley, and we are comfortable being more aggressive on our FY28 projections and VRA price targets.

VRA: Taking Next Steps; Raising PT to $7 (from $5); Reiterate Buy

Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

Thematic (Sector/Industry)

<ul><li>The WTR Consumer Stock Index trailed the Small Cap S&amp;P 600 in 2Q, declining 2.4% versus the 1.1% gain in the broader index.</li><li>The underperformance of our index was mostly due to a larger decline in prospective earnings, coupled with a lesser expansion in its prospective P/E ratio.</li><li>Our index saw prospective earnings decline 7.2% in 2Q versus a 5.0% decline in the S&amp;P 600, while its prospective P/E ratio expanded 0.8x in 2Q to 15.7x versus the 0.9x expansion to 15.3x in the S&amp;P 600.</li></ul>

The WTR Consumer Stock Index trailed the Small Cap S&amp;P 600 in 2Q, declining 2.4% versus the 1.1% gain in the broader index.The underperformance of our index was mostly due to a larger decline in prospective earnings, coupled with a lesser expansion in its prospective P/E ratio.Our index saw prospective earnings decline 7.2% in 2Q versus a 5.0% decline in the S&amp;P 600, while its prospective P/E ratio expanded 0.8x in 2Q to 15.7x versus the 0.9x expansion to 15.3x in the S&amp;P 600.

Consumer Products Monthly WTR Consumer Index Lags S&P 600 in 2Q

<ul><li>The WTR Consumer Products Index is down 17.5% YTD through June 23, 2025, on a 2.8x decline in its 12-month prospective absolute P/E ratio to 15.3x from 18.1x at the end of 2024.</li><li>Prospective earnings for the index are down 2.3% so far this year, but we note that it has outperformed the broader S&amp;P 600 Small Cap Index, which is down 6.3%.</li><li>Meanwhile, the S&amp;P SmallCap 600 Index is down 13.1% YTD, better than the WTR Consumer Products Index, despite relative earnings underperformance versus our index, as its prospective absolute P/E ratio compressed a lesser 1.2x to 15.3x from 16.5x at the end of 2024. </li></ul>

The WTR Consumer Products Index is down 17.5% YTD through June 23, 2025, on a 2.8x decline in its 12-month prospective absolute P/E ratio to 15.3x from 18.1x at the end of 2024.Prospective earnings for the index are down 2.3% so far this year, but we note that it has outperformed the broader S&amp;P 600 Small Cap Index, which is down 6.3%.Meanwhile, the S&amp;P SmallCap 600 Index is down 13.1% YTD, better than the WTR Consumer Products Index, despite relative earnings underperformance versus our index, as its prospective absolute P/E ratio compressed a lesser 1.2x to 15.3x from 16.5x at the end of 2024. 

WTR Consumer Products Index Lags S&P 600 YTD Despite Relative Earnings Outperformance

<ul><li>We are reiterating our Buy rating, $5 price target and projections for Vera Bradley after visiting stores in New Jersey and Long Island.</li><li> With both main line and outlet stores set for Fall, and the new “One Vera” rollouts, we are impressed with the full breadth and depth of the Fall offerings, with compelling new silhouettes and patterns and a continued improvement in overall store looks and in-store marketing.</li><li> Further, we believe back-to-school was a key winner, with inventory (mostly) in stock and very strong demand for backpacks and related accessories.</li></ul>

We are reiterating our Buy rating, $5 price target and projections for Vera Bradley after visiting stores in New Jersey and Long Island. With both main line and outlet stores set for Fall, and the new “One Vera” rollouts, we are impressed with the full breadth and depth of the Fall offerings, with compelling new silhouettes and patterns and a continued improvement in overall store looks and in-store marketing. Further, we believe back-to-school was a key winner, with inventory (mostly) in stock and very strong demand for backpacks and related accessories.

VRA: Snapping the Store; Raising Fall to the Next Level; Reiterate Buy, $5 PT

<ul><li>We are reiterating our Buy rating and $5 price target and raising our FY27 projections for Vera Bradley after the company registered another material step forward in turning the business, with 2QFY27 (July) top and bottom line upside and solid positive comps, as new products resonated and the back-to-school season was a material positive.</li><li> Further, we believe 3Q momentum has been strong, and we view management reiterating their revenue and operating income guidance for FY27 as conservative.</li><li> As such, we remain positive on the ongoing turn at Vera Bradley and believe Chief Executive Office Ian Bickley and his team are continuing to make material progress; we reiterate our Buy rating and $5 price target for VRA.</li></ul>

We are reiterating our Buy rating and $5 price target and raising our FY27 projections for Vera Bradley after the company registered another material step forward in turning the business, with 2QFY27 (July) top and bottom line upside and solid positive comps, as new products resonated and the back-to-school season was a material positive. Further, we believe 3Q momentum has been strong, and we view management reiterating their revenue and operating income guidance for FY27 as conservative. As such, we remain positive on the ongoing turn at Vera Bradley and believe Chief Executive Office Ian Bickley and his team are continuing to make material progress; we reiterate our Buy rating and $5 price target for VRA.

VRA: 2Q Review: Time to Start Paying Attention; Reiterate Buy, $5 PT

United States

Tapestry, Inc. designs and markets clothes and accessories. The Company offers handbags, leather goods, footwear, fragrance, jewelry, outer wear, ready-to-wear, scarves, sunwear, travel accessories, and watches. Tapestry serves customers in the United States.

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Tapestry Inc (TPR US)

VRA: Taking Next Steps; Raising PT to $7 (from $5); Reiterate Buy

We are raising our price target for VRA to $7 (from $5), increasing our FY28 EPS to $0.11 (from a loss per share of $0.03) and reiterating our Buy...

Small Cap Consumer Research

Consumer Products Monthly WTR Consumer Index Lags S&P 600 in 2Q

The WTR Consumer Stock Index trailed the Small Cap S&P 600 in 2Q, declining 2.4% versus the 1.1% gain in the broader index.

Water Tower Research

WTR Consumer Products Index Lags S&P 600 YTD Despite Relative Earnings Outperformance

The WTR Consumer Products Index is down 17.5% YTD through June 23, 2025, on a 2.8x decline in its 12-month prospective absolute P/E ratio to 15.3x...

Water Tower Research

VRA: Snapping the Store; Raising Fall to the Next Level; Reiterate Buy, $5 PT

We are reiterating our Buy rating, $5 price target and projections for Vera Bradley after visiting stores in New Jersey and Long Island. With...

Small Cap Consumer Research

VRA: 2Q Review: Time to Start Paying Attention; Reiterate Buy, $5 PT

We are reiterating our Buy rating and $5 price target and raising our FY27 projections for Vera Bradley after the company registered another...

Small Cap Consumer Research

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