Vera Bradley shares surge 19.35% after-hours as Project Sunshine transformation shows early progress, with sequential direct segment improvements and iconic product returns.

Vera Bradley surged 19.35% in after-hours trading following its Q3 earnings report, which highlighted early progress in its "Project Sunshine" transformation strategy. Despite a 10.2% year-over-year decline in net revenues to $62.3 million and a 5.3% drop in direct sales, the company noted sequential improvement in direct channel metrics, including positive comparable sales for five months through Black Friday. Management emphasized the return of popular products like the Original 100 Bag and outlined Project Sunshine’s five pillars—brand focus, go-to-market reset, digital enhancements, outlet optimization, and operational reimagining—as catalysts for long-term growth. While gross margins fell to 42.1% due to inventory write-downs and duties, the CEO’s remarks about profitability, cash generation, and operational wins likely boosted investor confidence, outweighing near-term revenue declines.