Paul Blair Michael C. Ray - Chief Executive Officer and Director Kevin J. Sierks - Interim Chief Financial Officer, Chief Accounting Officer, Controller and Vice President C. Roddy Mann - Executive Vice President of Strategy & Business Development

Randal J. Konik - Jefferies & Company, Inc., Research Division Evren Dogan Kopelman - Wells Fargo Securities, LLC, Research Division Alex J. Fuhrman - Piper Jaffray Companies, Research Division Amy Wilcox Noblin - William Blair & Company L.L.C., Research Division Edward J. Yruma - KeyBanc Capital Markets Inc., Research Division Jennifer M. Davis - Lazard Capital Markets LLC, Research Division Erika K. Maschmeyer - Robert W. Baird & Co. Incorporated, Research Division Janine M. Stichter - Telsey Advisory Group LLC Peter Wahlstrom - Morningstar Inc., Research Division Oliver Chen - Citigroup Inc, Research Division Maren Kasper - Wells Fargo Securities, LLC, Research Division Ike Boruchow Steven Louis Marotta - CL King & Associates, Inc., Research Division

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to today's Vera Bradley Fiscal 2013 Fourth Quarter and Full Year Results Conference Call. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to turn the call over to Paul Blair of Vera Bradley's Investor Relations Department. Please go ahead.

Thank you, Cameron. Good afternoon and welcome. We'd like to thank you for joining us this afternoon for Vera Bradley's Fiscal 2013 Fourth Quarter and Full Year Results Conference Call. Some of the statements made on the conference call during our prepared remarks and in response to your questions may constitute forward-looking statements made pursuant to and within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from those that we expect. Please refer to today's press release and the company's Form 10-K for the fiscal year ended January 28, 2012, filed with the SEC for a discussion of known risks and uncertainties. Investors should not assume that the statements made during the call will remain operative at a later time. The company undertakes no obligation to update any information discussed on the call. Please note that the results for the fourth quarter and fiscal year ending February 2, 2013, include 14 and 53 weeks, respectively, while the same period in fiscal 2012 includes 13 and 52 weeks, respectively. All discussions of comparable sales are calculated based on an equivalent number of weeks for each period, 13 weeks versus the comparable 13-week period for the fourth quarter and 52 weeks versus 52 weeks for the fiscal year. Our guidance for fiscal 2014 compares a 52-week year to a 53-week year for fiscal 2013. We understand that this is a busy period for reporting and intend to keep today's call to an hour in length. [Operator Instructions] I will now turn the call over to Vera Bradley's CEO, Mike Ray. Michael C. Ray: Thank you, Paul. Good afternoon, everyone, and thank you for joining us today. With me are Kevin Sierks, our interim Chief Financial Officer; and Roddy Mann, our Executive Vice President of Strategy and Business Development. Today, we will focus on the highlights of our fiscal 2013 full year and fourth quarter performance, as well as our outlook for fiscal 2014 first quarter and full year. We celebrated our 30th anniversary this past year. For 3 decades, we've connected with millions of women through color, fun and functionality. In fiscal 2013, we strengthened the friendships we've built over time and created many new ones. Notably, we successfully opened 20 new full-price and outlet stores in both current and new markets. For the fourth consecutive year, Gift Beat, a monthly trade publication that tracks trends in the gift industry, selected Vera Bradley as Vendor of the Year. We added over 2 million new customers through our growing database of advocates. Nearly 62 million people visited verabradley.com, a 45% increase over the prior year. We are proud that we consistently rank among the top in the number of annual website visits compared to our most closely related peer companies. Our Facebook fan base grew nearly 1.4 million. We continue to invest in the teams and processes that brought compelling new patterns and styles to market through an improved launch cadence, particularly highlighted by our Back to Campus and holiday launches. Our distribution center expansion was completed, doubling our capacity to 400,000 square feet to better serve our customer base. And we continue to build upon our market entry efforts in Japan through new shop-in-shops and department store distribution throughout Tokyo. These efforts contributed to our strong financial performance this past fiscal year, which met or exceeded many of our goals despite a challenging consumer and economic environment. For fiscal 2013, we grew consolidated net revenues by 17%, with growth across all of our sales channels; drove 30% growth in Direct segment net revenues and 18% in e-commerce; increased Indirect segment net revenues by 6%; and delivered earnings per share of $1.70, an increase of 19% over the prior year. We ended the fourth quarter with sales that were above expectations, driven by performance in the Indirect segment and the outlet store channel. As a result, net revenues grew by 21%, which exceeded our January guidance. In the Direct segment, net revenues increased 27% during the quarter. Comparable store sales decreased 0.4%, mainly due to reduced traffic in our stores. This reflects our decision to maintain our originally planned promotional cadence and offerings within our full-price stores for the holiday period despite challenging consumer conditions and what we believe was a highly promotional retail environment. Visits to verabradley.com were up over 40% for the quarter, contributing to e-commerce net revenue growth of 23%, which highlights the benefits and importance of our multichannel distribution model. The Indirect segment finished the quarter with 11% growth over the prior year due to a strong sell-in of the winter collection and the addition of Dillard's locations. Further, we shipped approximately $2.8 million in sales that we anticipated would be received by our retail partners in the first quarter of fiscal 2014. Over the course of the past year, we've developed initiatives to support several strategies that we expect will build upon the solid foundation of growth we've established over 30 years. Looking forward, we believe these initiatives will allow us to enhance the shopping experience across channels and are designed to optimize our long-term growth and profitability. First, we believe that shifting to a more full-price presentation online will benefit our brand, retail partners and financial performance. In fiscal 2013, we focused on the depth of our discounts while maintaining the cadence of our promotional activity. The next phase in this evolution will be to turn our attention to enhancing the experience for full-price shopping at verabradley.com. In fiscal 2014, this will involve solidifying the foundation by filling key positions and investing in technology. In addition, we will be evaluating enhancements to the user experience, social media strategies and e-mail marketing to understand how quickly we might evolve while being mindful of the competitive dynamics of the marketplace. Our specialty channel has long-standing meaning for the brand and our customers minds. Our brands purpose is generally manifested through many of our specialty regional partners, customer connections and distinctive merchandise offerings, yet we are mindful that some inconsistencies in brand representation and business execution exist within the channel. This year, we will map out a multiyear plan to remediate certain distribution accounts that have a negative impact on our brand and on the performance of the segment. At the same time, we will continue to work with our specialty retail partners to grow their business further, enhancing the long-term productivity and profitability of that channel. We don't expect our remediation efforts to have a significant impact on our financial performance in the current year. After extensive analysis, we believe a number of new patterns we introduced annually diminishes the strength of the overall assortment and presents a challenge for our specialty retail partners. In fiscal 2014, we expect to make 15 new patterns available for the Indirect segment compared to 17 last year. We expect this may impact our seasonal selling performance during the year and unfavorably impact current year sales. However, we're confident it will help to right size the assortment for the Indirect segment, allowing for a more consistent flow of product through their stores and will provide longer-term benefits and help the reorder levels in the years to come. We're actively working to refine the visual presentation of our merchandise in our full-price stores. This remerchandising effort should make our core styles more easily accessible to our customers, reduce the amount of merchandise in the selling floor and provide better cross-selling opportunities to our sales associates. We have piloted this approach and experienced positive results. We will be rolling out similar changes to approximately 1/3 of our full-price stores in the first quarter. What we learn from this initial rollout will help us to find changes that we expect to implement in additional stores during the balance of the year. In addition, we can leverage our learnings to help our specialty retail partners more productively merchandise the brand in their stores. Our experience in Japan over the past 2 years has proven to us that not only is there a customer in that market, but our passion for the brand mirrors that of our customer in the U.S. We believe we are at the point in our market-building efforts where we can now turn our attention toward establishing a business model focused on long-term profitability. We will be exploring options during fiscal 2014 to further capitalize on our market expertise and the excitement around our brand. I'm excited to announce that Bonita Inza has joined Vera Bradley as our Executive Vice President of Sales and Marketing. The addition of Bonita to our team will help us execute our growth plans not only through product connections, but through those based on customer experiences and relationships, something intrinsically rooted in the strength of our brand. Bonita has 30 years of retail experience in senior leadership roles, notably with Williams-Sonoma, Bath & Body Works and T-Mobile. With a strong and diverse background, we're certain that Bonita will hit the ground running and make meaningful contributions in short order. Turning to the first quarter, we continue to be impacted by a weak consumer environment and elevated price competition. However, we believe we will be able to manage through these challenges. In our Direct channels, we continue to focus on day-to-day execution, as well as a number of store-level initiatives. In our Indirect segment our specialty retail partners have responded cautiously through lower-than-expected-levels of purchasing, particularly for the buy-in of the summer collection launching next week. Following the launch, we will be working on those specialty retail partners to replenish their assortments. We believe our cost structure this year should reflect the headwinds we are facing. Therefore, we will manage the business considering the impact we anticipate in revenues while preserving our ability to realize our long-term objectives. Kevin will provide the specifics of our guidance in a few minutes. We continue to focus on improving the productivity of our core merchandise categories and are confident with our lineup of patterns and styles for the year. In addition, we have some exciting new product launches this year. We will continue -- we will introduce our new baby line tomorrow across our full-price distribution channels, including select specialty retailers and Dillard's locations. This exciting new category will be available in 2 patterns across a variety of infant apparel and accessory items. We're also excited about our partnership with Disney, with 2 character-inspired patterns launching in Disney theme parks starting in the third quarter. When Disney Parks announced our partnership on their blog this past week, it received 35,000 likes in only a few hours, which, we believe, was one of their strongest responses to date. We launched monogramming on February 21. While we realize there are significant opportunities for us to grow through personalization and customization, this is a compelling first step in enhancing our customer connections. Looking back, we are very proud of our accomplishments. Looking forward, we're confident that we are making the right strategic investments in our future while taking advantage of great opportunities to support our long-term growth objectives. I look forward to updating you on our progress as we continue to realize our mission of being a girl's best friend. I will now turn the call over to Kevin Sierks, our interim Chief Financial Officer, who will provide additional details regarding our fourth quarter and full year financial results, as well as guidance for our fiscal 2014 first quarter and full year. Kevin J. Sierks: Thanks, Mike, and good afternoon. I will begin my remarks with a review of our fiscal 2013 results and then provide you with our outlook for fiscal 2014, first quarter and full year. As Mike mentioned, we are very pleased with our financial performance and other accomplishments during fiscal 2013. Throughout the year, we delivered a strong top line while continuing to make key strategic investments to support our current and future growth. This included the opening of 20 new stores and the completion of our distribution center expansion, doubling our capacity and providing improved operating efficiencies. These efforts supported fiscal 2013 net revenue growth of 17% and net income growth of 19%. Net revenues of for the fourth quarter increased 21% to $162.6 million from $134.5 million in the prior year. This exceeded our updated guidance and was primarily due to performance in the Indirect segment and the outlet channel. In the Indirect segment, as Mike mentioned, we shipped approximately $2.8 million in sales that we had anticipated would be received by our retail partners in the first quarter but arrived in the fourth quarter. In the Direct segment, net revenues increased 27% to $103 million, driven by growth in all of our channels. The Direct segment accounted for 64% of total net revenues in the fourth quarter compared to 60% in the prior year. The increase in Direct segment revenues resulted from the opening of 20 new stores in the fiscal year. We ended fiscal 2013 with 65 full-price and 11 outlet stores. Comparable store sales decreased 0.4% compared to an increase of 9.3% in the fourth quarter of last year. Our store performance reflects our decision to hold discounting to planned levels and full-price stores during the holiday season. E-commerce net revenues increased $9.7 million or 23% and represented 32% of total net revenues during the fourth quarter, primarily due to continued growth in website traffic. In addition, we experienced favorable gross margins due to reduced shipping expenses. Indirect net revenues increased 11% to $59 million, which was above our expectations. This increase was driven by the strong sell-in of our winter assortment in addition to the $2.8 million we expected our retailers to receive in the first quarter. We continue to build on our positive momentum at Dillard's and are now on all 284 locations as of the launch of the spring assortment in the fourth quarter. Our success in the department store channel also helped contribute to the year-over-year improvement in the Indirect segment. This demonstrates the importance of this partnership and channel to our customers. Gross profit for the fourth quarter increased 24% to $94.1 million, resulting in a gross margin of 57.9% compared to 56.4% in the prior year. The increase in gross margin was due to operational efficiencies, lower freight cost and channel mix. Total SG&A expense was $55.8 million for the fourth quarter compared to $45 million in the prior year. SG&A as a percentage of net revenues was unfavorable by 90 basis points versus the prior year, primarily due to employee-related expenses and costs to support the launch of Vera Bradley Baby. The resulting operating income for the fourth quarter increased 22% to $40 million or 24.6% of net revenues compared to $32.7 million or 24.3% of net revenues in the prior year. Operating income in our Direct segment increased by 22% to $35.7 million, with operating margin of 34.5% compared to 35.9% last year. Operating income in our Indirect segment increased by 20% to $24.7 million, with operating margin of 41.6% compared to 38.6% in the prior year. Net income for the fourth quarter increased 25% to $25.1 million or $0.62 per diluted share compared to net income of $20.1 million or $0.50 per diluted share in the prior year. For fiscal 2013, net revenues increased 17% to $541.1 million from $460.8 million in the prior year. By segment, Direct net revenues increased 30% to $292.6 million. Comparable store sales growth was 3.4% compared to 10.9% in the prior year. Indirect net revenues increased 6% to $248.6 million. Gross profit for the year increased 20% to $308.3 million, resulting in a gross margin of 57% compared to 55.9% in the prior year. The increase in gross margin was due to operational efficiencies, lower freight costs, channel mix and lower input costs. Total SG&A expense was $204.4 million for fiscal 2013 compared to $169.4 million in the prior year. SG&A as a percentage of net revenues was unfavorable by 100 basis points versus the prior year primarily due to headcount expenses and increased store operating expenses. Operating income for fiscal 2013 was $110.1 million compared to $96.2 million in the prior year, an increase of 15%. Net income for fiscal 2013 increased to $68.9 million or $1.70 per diluted share from $57.9 million or $1.43 per diluted share in the prior year. The fiscal 2013 results include an earnings per share investment of $0.07 for Japan. The 53rd week in both the fourth quarter and fiscal year contributed $4.9 million to sales and $0.02 to diluted earnings per share. Key balance sheet highlights as of February 2, 2013, include cash and cash equivalents of $9.6 million, accounts receivable of $34.8 million compared to $38.1 million in the prior year, with day sales outstanding improving to 48 days compared to 57 days in the prior year. Inventory at the end of the fourth quarter was $131.6 million compared to $107 million in the prior year, resulting in year-over-year inventory growth of 23% compared to net revenue growth of 21%. The increase was less than we originally anticipated on our December call as a result of efforts we made to work with our suppliers, as well as higher than expected revenue in the fourth quarter. Debt outstanding of $15.1 million represents a reduction of $10.1 million during the fiscal year, but pay down of debt reflects the strong cash flow generation and capital efficiency of our business model and includes the completion of our $22 million distribution center expansion. For the first quarter of fiscal 2014, we expect net revenues to be in the range of $120 million to $122 million compared to $117 million in the first quarter of fiscal 2013. We expect comparable store sales growth to be flat due to the weak consumer environment. As Mike mentioned, in our Direct segment, we believe our specialty retail partners have responded cautiously to the consumer environment through lower-than-expected levels of purchasing for the first quarter. As a result, Indirect net revenues anticipated a decline in mid- to high teens impacted by a shortfall and the recently completed sell-in of our summer collection, as well as a decline in reorders during the first half of the quarter. The first quarter is also impacted by the $2.8 million of sales that we've previously mentioned. Gross margin for the first quarter is expected to be down approximately 30 basis points to the prior year, primarily due to the reduction in revenue, as well as outlet store promotions. SG&A as a percentage of net revenues is expected to be approximately 46.5% or 43.5%, including other income, primarily related to annualizing fiscal '13 investments and due to opening 6 new stores in the first quarter. Diluted earnings per share are expected to be between $0.20 and $0.22. Our earnings per share estimate assumes an effective tax rate of approximately 39% and fully diluted weighted average shares outstanding of 40.6 million. For fiscal 2014, we expect net revenues to be in the range of $585 million to $590 million, including comparable store sales growth of low to mid-single digits. During the fiscal year we expect to add approximately 23 full-price and outlet stores. Indirect net revenues will decline by mid-single digits. The Indirect revenue guidance reflects the slow start to the fiscal year, as well as fewer pattern introductions. As Mike discussed, in light of the challenging environment, we will manage our cost structure considering the impact we anticipate in revenues while preserving our ability to realize our long-term objective. Gross margin for the year is expected to expand by 50 basis points due to operational efficiencies, channel mix and lower input costs. This guidance includes our expectation that cotton prices stay consistent with those in the back half of fiscal 2013. We expect SG&A to be relatively flat as a percentage of net revenues, despite the addition of key management team members and investment in our e-commerce platform. Diluted earnings per share for fiscal 2014 are expected to be in the range of $1.83 to $1.88. This estimate includes an investment of approximately $0.07 per share to support our efforts in Japan. In addition, we expect an effective tax rate of 39%, slightly higher than the prior year due to tax incentives related to the completion of the distribution center that will not repeat in fiscal 2014. Fully diluted weighted average shares outstanding are expected to be 40.7 million. Capital expenditures for fiscal 2014 are expected to be approximately $20 million and includes the build-out of new stores, as well as continued investment in our systems, including our e-commerce platform. Regarding our inventory growth outlook for fiscal 2014, as we stated in our previous earnings call, we expect inventory to outpace sales growth in the first quarter of this year. Our fiscal 2013 first quarter inventory was low at $98 million, which was 4% lower than the prior year and occurred in a quarter when revenue grew 16%. In addition, as noted on our third quarter call, we placed purchase orders for more inventory than we currently need. As we stated before, because these orders were in our best-selling patterns and styles, we expect the vast majority will be sold during the fiscal year through our normal channels. We expect inventory at the end of the first quarter to be $7 million to $11 million higher than we exited fiscal 2013. Our primary objective is to ensure we have appropriate inventory to meet customer demand and to support our sales growth throughout the year. We have been able to manage this objective over time because our business model includes merchandise life spans of approximately 18 months as product moves through our full-price and discount channels. Overall, we are pleased with our financial performance for fiscal 2013. Despite a slower-than-anticipated beginning to fiscal 2014, we remain excited about our long-term growth potential, which is supported by our strong balance sheet and cash flow. Thank you. I will now turn the call back to Mike for some closing remarks. Michael C. Ray: All right. Thank you, Kevin. In closing, I'd like to reiterate that we are pleased with our operational and financial performance in fiscal 2013. In the year, we made numerous operational improvements and expanded our business across several fronts, which helped result in 17% top and 19% bottom line growth. This milestone here, in which we celebrated our 30th anniversary, was one of reflection on the many past contributions of the entire Vera Bradley team and our dedicated retail partners. Our unique culture has provided the opportunity to attract and retain employees and partners who bring great enthusiasm and dedication to Vera Bradley. Beginning the new fiscal year, we look forward to carrying this enthusiasm forward, capitalizing on the strength of our brand and continuing to build a business that will provide current and future generations with colorful and functional products and will provide for continued growth and success. Operator, we are now ready for questions.

[Operator Instructions] And we'll take our first question from Randy Konik with Jefferies. Randal J. Konik - Jefferies & Company, Inc., Research Division: So I guess a couple of things. All right. Just on the comment around the inventory, so the inventories came in really nicely in the fourth quarter and then you're talking about in the first quarter, they're going to be obviously be above the sales growth. Is there any more clarity on how much above in the first quarter? And then just a little clarity on the first quarter outlook versus the annual outlook. I understand that you're giving some clarity around the different expense buckets. So with the first quarter outlook, obviously, it's below the consensus estimate, well below, yet the annual outlook is not that far below at all. Just what gives you the confidence that the first quarter is not going to play out for the remainder of the year? What levers are you pulling to be able to meet that $1.83 or $1.88 or what have you? Kevin J. Sierks: Good question, Randy. First, I'll start with the inventory you mentioned. So we exited the year at about $132 million. Our current forecast shows us adding about $7 million to $11 million to that, so the number doesn't change a lot through the first quarter. But keep in mind, our revenue growth rate is lower than we would have expected as well in the first quarter, so that impacts that. So if you look at the growth over the prior year, it's pretty significant, but most of that is really due to the $98 million last year being significantly low. So if you look at our inventory over this year, we grew inventory much lower than sales growth in Q4, Q1 and Q2, Q1 really being in a very low watermark for us on inventory. So we're very confident in the inventory mix as we exited Q4 and as we projected to be at the end of Q1. You had also mentioned the guidance for Q1. Considering the uncertainty that persists in the consumer environment, that really has played into our Q1, I think, similar to a lot of other retailers. We hope for that to turn a little bit in the back half of the year. But for us, Q1, we have already incurred about 80% of our revenues in the Indirect segment. We also have the outlet sale that's pretty consistent year-over-year as it relates to revenue, and we're halfway through the quarter. So if you look at Q1, in particular, we feel we're in a good position to provide that guidance. Through the year, we've got some programs in place to manage our expenses in light of the soft top line. So those are some of the things we're going to focus on to make sure we manage the bottom line in light of the demand uncertainty. Michael C. Ray: And Randy, I'll just add on the demand side. Really, what you're seeing in the first quarter is kind of the independent specialty retail partner's reaction to what's going on out in the marketplace. And our Direct business is performing relatively well considering the macro environment. What we're seeing on the Indirect side primarily is a shortfall in their commitment to future seasons. So they're committing less of their open to buy and really planning to open close -- or rather order closer their needs. We've demonstrated across fiscal '13 an ability to fulfill their orders and replenish them pretty rapidly. And so what we're seeing in the buy-in of the summer season is a smaller weeks of supply commitment in that season, with the expectation that we'll replenish quickly. So what we're probably going to see here is a shift between the early order period or the sell-in of the season relative to reorders that follow.

And we'll take our next question from Evren Kopelman with Wells Fargo. Evren Dogan Kopelman - Wells Fargo Securities, LLC, Research Division: You mentioned -- so you said 15 new patterns, I think, versus 17 last year. Can you quantify the impact -- do you expect the unfavorable sales impact from just that portion in 2013? And also, if you could give us store opening plans by quarter, that would be great. Kevin J. Sierks: Your second question with regards to store openings, I think we mentioned in the script, we are opening 6 stores in the first quarter, but we typically haven't provided guidance for the remaining of the quarters. But we do expect to open 23 stores this year, which compares to 20 stores last year, so definitely an increase there. Michael C. Ray: Then the patterns. Kevin J. Sierks: Yes, and then with regards to the patterns, we try not to give guidance, obviously, specific to patterns because we actually don't know exactly how an Indirect retailer or at least all of them are going to react. So there's going to be an impact given we're reducing the patterns. We do expect that to be short term. We expect over the long term, it will actually help us. But in the short term, as the retail partners get used to the change, we expect there to be a shortfall this year. Evren Dogan Kopelman - Wells Fargo Securities, LLC, Research Division: Okay, the other question -- I think your Indirect channel actually had a pretty good holiday relative to your own stores and kind of the mall traffic we heard in the month of December, and I think they held pricing pretty well. What has changed? Maybe you could give a little bit more color around that, that's impacting their ordering patterns now. Michael C. Ray: Yes. I think, the holiday season, they've done fairly well. I think, post-holiday, things slowed down for them primarily in the form of traffic and so we started selling in the summer season in January, post holiday. So that impacted kind of the macro environment and how they think about committing resources impacted their commitment to the season. Good news is we can replenish rapidly and the focus of the sales team is going to be getting out there, post-launch, and capturing orders, the replenishment orders that will follow. So we're pretty happy that we can go out there and capture those orders. Evren Dogan Kopelman - Wells Fargo Securities, LLC, Research Division: And then lastly, if I can ask on Dillard's. Your 284 locations, is there plans to continue to increase there or is that going to be done for Dillard's? And I think you have an expanded in some of the doors. Is there a thought to roll that out to further doors? Michael C. Ray: We are, actually, in all of in their doors now and we're at 284, and we are continuing to improve the presentation within the doors. Actually Dillard's performance has been outstanding. We were just looking at that today, that over the first 8 weeks of the year, performance has been outstanding. So they are doing great with the line. We have some work to do just to improve the visual presentation. We have the kind of the branded presentation in a number of doors. There's another tranche of doors that we're going to roll into this year, and we're working with Dillard's closely, and their store associates, to make sure they continue to maintain the display. Our merchandise is kind of difficult to maintain, it's heavily shopped and you have to give a fair amount of focus to make it look good within the store. So that's the focus of the team this year, on helping Dillard's continue to drive their growth.

[Operator Instructions] We'll take our next question from Alex Fuhrman with Piper Jaffray. Alex J. Fuhrman - Piper Jaffray Companies, Research Division: Yes, just another follow-up on the different cadence for the pattern releases in 2013. If I'm looking at the remarks in your prepared remarks correctly, you said there's going to be 15 available for the Indirect channel. Are we still going to see more releases and maybe more frequent releases of a fewer number of patterns in the direct channel? Are there going to sort of be exclusive, either online-only or Vera Bradley store-exclusive patterns? Curious about the feedback you've gotten from some of your vendors as you talk with them about this. I'm sorry, your retail partners not your vendors. C. Roddy Mann: Yes. Alex, this is Roddy, I'll tackle that. Just to start, just on the cadence itself. The cadence is -- we're comfortable with the cadence. We made that shift last year. So how we're launching patterns, and as you just think about it across the quarters, that will be the same, as the actual number of patterns we're releasing. What we found is that -- and you can just imagine yourself going into a store, there are a lot of patterns there and if you think of shrinking that 1,700 square foot store down to say 250 square feet, one of our retail partner stores, it's challenging to merchandise all of that. So through just looking at the numbers, through market research, we feel that we don't need 17 patterns. We actually were at 16, we added the additional 17th with ribbons, the breast cancer awareness pattern. We feel that going down to 15 is better for them to manage and will give them the best lineup of patterns for their customer base. Although much of the customer base overlaps in our Direct segment, just because we're in malls, we do have a little bit maybe younger customer base and we feel more comfortable releasing some of the other patterns to them. We also have a little bit -- just more flexibility to merchandise it in larger square footage. So, generally speaking, we have that flexibility to do it. We're probably really only reducing 1 pattern. So the difference is maybe going from 17 to 16 in our Direct stores. But we're working on that now. It's just that we have the flexibility to have a much more limited assortment in our stores and not go through the actual sell-in of the season.

We'll take our next question from Amy Noblin with William Blair. Amy Wilcox Noblin - William Blair & Company L.L.C., Research Division: Two questions. First, can you talk a little bit more specifically about the merchandising initiatives that you've been testing in those stores? Just some more granularity there, what kind of lift you've seen. And I know you talked about some rollout plans. And then the second question relates to the online initiative. I'm very happy to hear that you will continue to move more towards full price. We've seen, having done to a couple of base customer appreciation events, that you can put your pattern on anything, and I know SKU efficiency at the Direct level and Indirect level has been a priority. Should we expect to see extended SKU assortment online as we move through this year and see SKU rationalization at the store level? Maybe you could talk a little bit more specifically about that. C. Roddy Mann: The effort in the stores is -- we're not actually looking at the SKU base at the company level, that we're offering everywhere. Naturally, when we adjust the number of patterns, that has a direct influence on it. What we're doing, sort of concurrent with that, is looking at how we're presenting the merchandise in the stores themselves. We piloted that with a more focused effort, highlighting our key styles in a way that's a little bit more shop-able for the customer. And a couple of our stores had a good response. Not that we felt comfortable rolling out to a broader number. And there's probably -- maybe just under 30 doors now that have it. And we felt confident that, that's going to help the assortment be more shop-able as we go through the year, especially building towards the holiday season. And so, more broadly speaking, as we build up the merchandising team's capabilities, as we go through the re-merchandising efforts in our own stores, we'll take learnings from that and roll that into the overall company-level assortment. That probably won't necessarily happen this year. You may see a broader assortment online than in many of our stores, but it won't necessarily be incremental SKUs that we're offering online. Amy Wilcox Noblin - William Blair & Company L.L.C., Research Division: And just a quick follow-up to the online. It sounds like you're going to build the team through this year and so you're not expecting too much impact from a top line perspective online. Is that fair? I mean, I know you're signaling what's going on in the Indirect channel. But presumably, as you reposition to full-price, there could be some impact to the online as well. So is that factored into your plans or do we expect to see that more kind of later in the year into next year? C. Roddy Mann: We're not really expecting an impact this year. We're really focusing on the investments, this year, to get ready.

And we'll take our next question from Edward Yruma with KeyBanc Capital Markets. Edward J. Yruma - KeyBanc Capital Markets Inc., Research Division: I just want to get back to the excess inventory question. So you indicated, right, that it was $7 million to $11 million in excess of where you ended 4Q. And you previously indicated that it would be 10% to 20% ahead of kind of sales growth levels. So, understanding that the sales growth level for 1Q is a little lighter than maybe we had expected. I just wanted to confirm that the actual inventory amount hadn't changed. C. Roddy Mann: So we were able to work with our suppliers, and we were able to delay some of our purchase orders, as well as cancel some of our purchase orders. But that delay actually pushed some of our inventory from Q4 to Q1. So that growth rate obviously increased in Q1 but came down in Q4 for inventory. So we feel real good about the mix of inventory. And keep in mind, our business model includes lifespans for our products that can sit in our stores for 18 months. So we feel very confident we can move that inventory, but it still is in line with our expectations that we presented back in Q3. Edward J. Yruma - KeyBanc Capital Markets Inc., Research Division: And I know you talked a little bit about a potential rationalization or look at your independent channel. I'm just wondering if you could maybe offer a little bit more detail. Is it reducing the number of stores? Is it changing the way you work with them? Obviously you're doing a pattern release change, but are there other more substantial changes that we should be looking for as the year progresses? C. Roddy Mann: Ed, we're actually looking at all the ways to increase the productivity and profitability of that channel. There's probably a lot of short term opportunities in how we're selling to them and how we're helping the merchandise their assortments internally. And one of the levers we've pulled, so to speak, is the pattern reduction that we're offering them, and we think that will have an impact -- I shouldn't say in the short term, as far as it relates to sell-in, but we think it'll help their profitability in the near future, and that may trickle into the following year. As it relates to the store count. We mentioned before, there's probably 5% to 10% attrition on an annual basis. And we're opening up doors to cover that up. We think there may be opportunities to be a little bit more proactive in that area. That will not -- we're not really anticipating that to happen, this year, beyond the normal attrition. Edward J. Yruma - KeyBanc Capital Markets Inc., Research Division: One quick follow-up if I may. So you guys preannounced January 15, you stated revenue would be $149 million to $154 million. Obviously there was a little bit of revenue, that you indicated, shifted from 1Q to 4Q. But I guess, what else made up the difference given that you were only, at that point, 2 weeks or so away from quarter end. Kevin J. Sierks: So our reorders, for our Indirect segment, came in a little higher than we expected. And then some of the promotional activity we ran in our outlet stores really drove revenue higher than our expectations. So most of that being very positive. And then the 2.8 -- part of that $2.8 million did relate to the beach and eyewear release, or launch, and it straddled the quarter. We expected that to hit, obviously in Q1, but because the customer received it in Q4, that's when it was recorded.

[Operator Instructions] We'll take our next question from Jennifer Davis with Lazard Capital Markets. Jennifer M. Davis - Lazard Capital Markets LLC, Research Division: I was wondering if you could talk a little bit about how summer tested in your own stores. I think that you said that upfront orders were a little bit lower, but I think that a lot of that is due to -- you're able to deliver it sooner so the retailers don't need to order it as much upfront, which I think is a good thing, because at the end of the day they'll end up with less. But anyway, so I was just wondering if you could talk about kind of how summer tested in your stores. C. Roddy Mann: Jen, we were pleased with the testing in our own stores, to the point that -- really, we're trying to understand, initially, how the gap between our original plans and the sell-in of the season. And just sort of -- doing further research confirmed that. They're anxious about the -- as you said they're anxious about the consumer environment. They're not buying into the season as much, early on, when they can get reorders fulfilled pretty quickly. And we expect those reorders to come through and sort of bridge that gap to some extent. We don't expect all of that to come in the first quarter. Amy Wilcox Noblin - William Blair & Company L.L.C., Research Division: And then a quick clarification. Can you talk to how much inventory you were able to cancel? Kevin J. Sierks: We haven't quantified that publicly. Jennifer M. Davis - Lazard Capital Markets LLC, Research Division: And then one more clarification if you don't mind. How many specialty retailers is Baby in? And is it -- how many Dillard's stores is it in? I don't think it is it all of them. Michael C. Ray: Yes. This is Mike. It's in roughly 1/3 of the specialty retailers and it's in probably something similar to -- maybe a little less than that of Dillard's stores. I can't remember the number off the top of my head. But for certain select Dillard's stores, it's in those, and there's an opportunity for us to roll that out further. Amy Wilcox Noblin - William Blair & Company L.L.C., Research Division: Along those lines, actually 1 more. How about bedding and kind of the back-to-campus for this back-to-school season. Are you guys going to have bedding again, in some of those incremental styles? C. Roddy Mann: We will have it again. We're not expecting to have any incremental styles like we had last year. So it's sort of -- think of it as in line of this past year.

And your next question comes from Erika Maschmeyer with Robert W. Baird. Erika K. Maschmeyer - Robert W. Baird & Co. Incorporated, Research Division: Just wanted to clarify on your guidance. Does the Q1 guide assume that the trends you've seen to date, in Q1, persist throughout March and April, and that replenishment remains weaker or does it assume that reorders normalize somewhat? And then can you elaborate on your comment around elevated price competition. Is that in the handbag category, just in overall retail? Kevin J. Sierks: So, first, with regard to Q1 guidance. We do expect a cautious environment throughout Q1. We obviously expect it to pick up as we get into the final 3 quarters of the year. And with regards, specifically, to the Indirect. We do plan a little bit of an increase for our reorders just because we've got a launch next week and they typically buy into a season for a certain amount of weeks. And so you typically see a little lower reorder activity, but then it starts to pick up as we get into April. Michael C. Ray: The other catalyst will be Baby, which launches tomorrow so that is going to drive traffic and we would expect that to have a positive impact on the overall assortment as well. Yes, we are being cautious just simply because of the environment. Kevin J. Sierks: And just to your -- Erika, your question about promotional environment. Not just the handbag category, I'd say it's all retail, if you were just to walk the malls. Particularly into February, you would've seen it, and not just in brick-and-mortar retail, I think extremely promotional online as well. Erika K. Maschmeyer - Robert W. Baird & Co. Incorporated, Research Division: That's definitely fair. Could you talk a bit about the new Chief Experience Officer role and the skills that Bonita is bringing to the table. I guess, sort of why did you create this role and what do you expect to get out of it? Michael C. Ray: Yes, Erika, this is Mike. Actually this is something that evolved over the course of time. We launched a search for a VP of Multichannel back in the fall. And through the course of that period of time, through the course of that search, we were also going through strategic planning. And, really, 1 focus that came out of strategic planning is enhancing our relationship with the consumer. And we, through the course of the interviews, came into contact with Bonita, realized pretty quickly that she was probably -- well, is overqualified for the role that we were pursuing. And so, considering our strategies, considering the need for significant strength, considering having someone that spans both sales and marketing to focus on the customer experience. That's how that came together. It was an opportunity for us to attract some incredible talent on to the team. Bonita really has a nice solid long track record at retail. She started her career in San Francisco after going to FIDM, and worked primarily in boutiques, ended up working for Laura Ashley, managing a number of their stores. Went to work, soon after, for Williams-Sonoma and was ultimately their VP of Sales and Operations. Before she left she spent some time at T-Mobile, heading up their retail sales and operations and then eventually was head of their product development group, focusing on innovation. And then most recently, was with Bath & Body Works, focusing on the consumer experience. So the combination of all of those experiences throughout her career really kind of elevate her to a point where she can help us. She'll have responsibility for all the channels as well, so the Direct segment and the Indirect segment will report up to her. She'll have a strong team. Dave Thompson, Sherry Lance [ph] will continue to execute the strategies, and she'll be focused on elevating the customer experience and really helping us build-out strategies, going forward, for growth.

[Operator Instructions] We'll go next to with Janine Stichter with Telsey Advisory Group. Janine M. Stichter - Telsey Advisory Group LLC: My question was just on pricing, I think you typically reevaluate your pricing annually. And just given the promotions you're seeing, any thoughts of potentially over seeing some of the price increases you took, I guess it was a little over 1 year ago now when you had the cotton headwinds, now that you have a tailwind in cotton? C. Roddy Mann: We're not reconsidering. We think we're good with the price increases that we took. Remember, those price increases were pretty moderate, as it related to the ultimate retail price. So we feel we're in good place there. We're just not necessarily increasing the promotional levels as much as some of our competitors might be, given this environment. We think it's the right thing to do for the brand, it's the right thing to do for the long run. Janine M. Stichter - Telsey Advisory Group LLC: And then just, also, any commentary on the outlets. I think you mentioned that you had seen some good trends there, and that's pretty different from what we're hearing from everyone else, where we've heard about weak outlet traffic. Just any color there will be helpful. Kevin J. Sierks: The traffic in the outlet stores? Janine M. Stichter - Telsey Advisory Group LLC: Yes. Kevin J. Sierks: The traffic in the outlet stores have been somewhat down, but our promotional activity has been working, and it's been helping drive some of our top line.

And we'll take our next question from Peter Wahlstrom with MorningStar Investment Research. Peter Wahlstrom - Morningstar Inc., Research Division: One of your long-term targets, if I recall, is kind of targeting mid- to high-teens revenue growth. And I realize that there are lots of puts and takes in fiscal 2014, whether it's a 53 week year, slow 1Q, weak consumer. Is there a structural change in the medium term outlook or is there something specific to 2014 that we should be thinking about? Kevin J. Sierks: Obviously, the current year, the long-term guidance doesn't apply. As we stated, we've got a lot of strategies around our Indirect channel, with regards to the patterns that we're going to offer to them. Also, with mapping out a long-term strategy to better profitability and productivity out of those retailers. But, nevertheless, that being said, we don't believe there's a fundamental change in our business or in our strategy, so we still feel good for the most part with that long-term guidance. Peter Wahlstrom - Morningstar Inc., Research Division: And I know this was asked previously, but just to clarify. When we're thinking about the applied acceleration in top line, in the back half of fiscal 2014, that's largely predicated on a strengthening macro environment. Is that correct? Kevin J. Sierks: Yes, I think similar to the other retailers, we expect this to impact Q1 and we hope the consumer comes back a little bit more as we exit Q1. Peter Wahlstrom - Morningstar Inc., Research Division: And if you don't see a recovery in the consumer, how does that translate into your recent decisions to not aggressively pull the promotional lever, either at retail or the e-commerce channel? C. Roddy Mann: E-commerce, we planned the same level of discounting as last year. We've continued to be a little more promotional in our outlet stores, and that has driven the top line sales, and we've also got some cost containment programs in place to help better manage the bottom line in light of the uncertain top line. And I think those are some of the things we'll push on, if we need to, if the sales aren't there.

We'll take our next question from Oliver Chen with Citi. Oliver Chen - Citigroup Inc, Research Division: Regarding the modeling -- a modeling question on Indirect. Should we just model sequentially, on a quarterly basis, that it sees less pressure throughout the quarters? If you could just help us a little, because that line has been so volatile. And my follow-up is in relation to the comp store sales trends. What were the key levers that kind of drove the deceleration? Was it traffic or AUR, and building on that, what are you most constructive of, in terms of the comp levers, for you to achieve your full year target on comps. Kevin J. Sierks: We've held pretty consistent that during the holiday, and even thereafter, that in our full-price stores we're not going to discount any more than we have historically. I think that served us well, especially if you look at our bottom line in Q4. As you look at the outlet stores, we have used those to promote a little bit more, to drive traffic, ultimately to drive sales. And I think we've been successful doing that. And specific to the Indirect channel, it is still a pretty choppy channel. Obviously the reduction in patterns, the lower EOP. Here in Q1, we hope maybe that will settle it down a little bit, make it a little bit more consistent in the year. But I think if you look at our sales last year, it should be a predictor of this year, from a quarter-to-quarter basis, mainly because our product cadence is the same last year as it compares to this year. Oliver Chen - Citigroup Inc, Research Division: So just to be clear, last year it grew 1 and 3, then 7 and 11. Are you saying this year it should become less negative as each quarter goes on? Kevin J. Sierks: I think that's a fair enough. Keep in mind, with regards to Q4, we did have that $2.8 million that we would have expected to hit Q1. If you actually pull that $2.8 million out, the growth rate of the Indirect segment in Q4 would actually reduce from 11% to right around 6%. So I'd just keep that in mind as you're doing your modeling. Oliver Chen - Citigroup Inc, Research Division: And just clarifying what you said about the comps. Are you saying the AUR was flattish but -- you mean you had lower traffic or conversion to get to the slightly negative comp that you just posted? Kevin J. Sierks: Yes, that is correct. Maren Kasper - Wells Fargo Securities, LLC, Research Division: And going forward, the expectation is potentially that traffic helps versus AUR? Kevin J. Sierks: Yes, it is. It's really traffic in the full-price stores.

Our next question comes from Ike Boruchow with Sterne Agee.

Just wanted to focus on the store segment. So I guess in Q4 you had your first negative -- slight negative comp, and you guys did flat for Q1, sorry if I missed this, but is that indicative of where the comps are running quarter-to-date in Q1? And then also I think I heard that you're actually ramping your store growth from 20 stores last year to 23 new stores in 2013. Can you talk about that decision? And if you're comps were to remain weak, would you ever consider pulling back on the store expansion strategy, at least temporary? Kevin J. Sierks: Keep in mind, with regards to the store strategy, we have the infrastructure in place to be able to build more stores. We also have a lot of locations that looked appealing to us, and have good rates, so -- and keep in mind those stores that we open this year don't go into the comp base until the following year. So they're really not going to play into our comparable stores this year. Michael C. Ray: But long term, we don't believe this is where comps are going to settle. We have a lot of initiatives on the table. We mentioned one, in terms of the re-merchandising of the stores. We think that's going to help. And we're focused in other ways to drive comps. So I wouldn't look at this period of time and say this is indicative of what we're going to see going forward. Kevin J. Sierks: Our guidance for Q1 obviously contemplates the first half of this quarter, with regards to comps, and that's why we expect it to be flat in the quarter. But we expect it to be to pick up as the year goes on.

We'll take our final question from Steve Marotta with CL King and Associates. Steven Louis Marotta - CL King & Associates, Inc., Research Division: Just trying to amplify on the last question. Does the flat comp expectation in Q1 assume for acceleration over the next 6 weeks? Kevin J. Sierks: We typically don't try to give our comps by month, because it can be very difficult to, one, predict. But we did start out the quarter slow though, and that's reflected in our flat guidance. Steven Louis Marotta - CL King & Associates, Inc., Research Division: And lastly, very quickly, the $2.8 million swing in sales into 4Q from Q1. Could you quantify that a little bit on an EPS basis, roughly? Kevin J. Sierks: If you were to do the numbers straight from our P&L, it's about $0.01 to our EPS.

This does conclude today's question-and-answer session. I'd like to turn the conference back over to Mr. Ray for any additional or closing remarks. Michael C. Ray: Thank you for joining us today and for your continued interest in Vera Bradley. We look forward to speaking with you during our first quarter conference call, which will be held in June of 5 at 4:30 p.m. Thank you.

Ladies and gentlemen, this does conclude today's teleconference. We thank you for your participation.