Financial Performance

J.Jill ‘Disappointed’ with First Quarter Financial Results

The retailer fell short on earnings and revenue last quarter and same-store sales dropped more than 3%.
J.Jill ‘Disappointed’ with First Quarter Financial Results

J.Jill shares fell 52% Thursday after the women’s apparel brand reported first-quarter profit and sales declines and gave weak guidance.

With 283 stores and an e-commerce platform, the retailer reported total net sales for the 13 weeks ended May 4, 2019, were $174.5 million versus $181.5 million for the 13 weeks (the prior year) ended on May 5, 2018.

“We are disappointed with our first quarter performance and are taking immediate actions to clear excess inventory and position the business for improved results in the second half of the year,” explained Linda Heasley, president and CEO of J.Jill.

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“We are early in the process of executing against our updated long-term strategies, and our new leadership team across key areas of the business is now in place and will begin to have greater impacts on the business,” she said.

J.Jill ended the first quarter fiscal 2019 with $14.3 million in cash. Inventory at the end of the first quarter fiscal 2019 increased to $85.4 million compared to $77.5 million at the end of the first quarter of fiscal 2018. The company opened two stores, closed one store in the first quarter, and ended the quarter with 283 stores.

The company is “incorporating key learnings from the first quarter,” Heasley added, “and will continue to assess investments in technology and process improvements to ensure the team has the tools to satisfy our core customers and capture the opportunities we see ahead for the J.Jill brand.”

For the second quarter of fiscal 2019, J.Jill expects total comparable sales to decrease 1% to 3% with total net sales expected to be -1% to +1%. Diluted earnings per share is expected to be -$0.08 to -$0.10, including a decrease of approximately $0.03 due to the company’s technology investments, compared with diluted earnings per share of $0.23 and adjusted diluted earnings per share of $0.24 in fiscal 2018.

The company is revising its outlook for the full 2019 fiscal year. It expects total comparable sales to fall 2% to 4% with total net sales expected to be flat to -2%. Diluted earnings per share is expected to be in the range of $0.17 to $0.21, which includes a decrease of $0.09 to $0.10 due to technology investments, compared with diluted earnings per share of $0.69 and adjusted diluted earnings per share of $0.72 in fiscal 2018.

Among J.Jill’s other reported results were:

  • Total company comparable sales, which includes comparable store and direct to consumer sales, decreased by 3.3%.
  • Direct to consumer net sales represented 41.9% of total net sales, compared with 40.5% in the first quarter of fiscal 2018.
  • Gross profit decreased to $116.3 million from $120.3 million in the first quarter of fiscal 2018. Gross margin was 65.9% compared with first quarter gross margin of 66.3% in fiscal 2018.
  • Income from operations decreased to $10.8 million from $20.0 million in the first quarter of fiscal 2018, which is inclusive of non-recurring SG&A expenses.
  • Net income decreased to $4.4 million from $11.3 million in the first quarter of fiscal 2018, which is inclusive of non-recurring SG&A expenses.

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