QUINCY, Mass.–(BUSINESS WIRE)--J.Jill, Inc. (NYSE:JILL) today announced financial results for the first quarter of fiscal year 2024.
Claire Spofford, President and Chief Executive Officer of J.Jill, Inc. stated, “We are very pleased with our first quarter results which exceeded expectations driven by a strong end to the period as we transitioned into the heart of our big season leading up to Mother’s Day. We are excited and confident about the future of the J.Jill brand and business, and we are making meaningful investments in marketing, systems, and new stores to realize its potential. In May, we also announced that we paid down approximately $60 million of debt and initiated an ordinary quarterly dividend program.”
For the first quarter ended May 4, 2024:
- Net sales for the first quarter of fiscal 2024 increased 7.5% to $161.5 million compared to $150.2 million for the first quarter of fiscal 2023. The increase includes approximately $7.0 million of benefit due to the calendar shift associated with the 53rd week in fiscal 2023.
- Total company comparable sales, which includes comparable store and direct to consumer sales, increased by 3.1% for the first quarter of fiscal 2024.
- Direct to consumer net sales, which represented 47.0% of net sales, were up 11.6% compared to the first quarter of fiscal 2023.
- Gross profit was $117.7 million compared to $108.4 million in the first quarter of fiscal 2023. Gross margin was 72.9% compared to 72.1% in the first quarter of fiscal 2023.
- SG&A was $89.1 million compared to $83.0 million in the first quarter of fiscal 2023. Excluding non-recurring items from both periods, SG&A as a percentage of total net sales was 55.4% compared to 55.2% for the first quarter of fiscal 2023.
- Operating income was $28.4 million compared to $25.4 million in the first quarter of fiscal 2023. Operating income margin for the first quarter of fiscal 2024 was 17.6% compared to 16.9% in the first quarter of fiscal 2023. Adjusted Income from Operations* was $29.6 million compared to $26.3 million in the first quarter of fiscal 2023.
- Interest expense was $6.4 million compared to $6.7 million in the first quarter of fiscal 2023. Interest income was $1.0 million compared to $0.6 million in the first quarter of fiscal 2023.
- During the first quarter of fiscal 2024, the Company recorded an income tax provision of $6.2 million compared to $2.0 million in the first quarter of fiscal 2023 and the effective tax rate was 27.2% compared to 29.9% in the first quarter of fiscal 2023.
- Net Income was $16.7 million compared to $4.6 million in the first quarter of fiscal 2023.
- Net Income per Diluted Share was $1.16 compared to $0.32 in the first quarter of fiscal 2023. Adjusted Net Income per Diluted Share* in the first quarter of fiscal 2024 was $1.22 compared to $1.01 in the first quarter of fiscal 2023.
- Adjusted EBITDA* for the first quarter of fiscal 2024 was $35.6 million compared to $31.9 million in the first quarter of fiscal 2023. Adjusted EBITDA margin* for the first quarter of fiscal 2024 was 22.1% compared to 21.2% in the first quarter of fiscal 2023.
- The Company did not open any new stores in the first quarter of fiscal 2024 ending the quarter with 244 stores.
Balance Sheet Highlights
- Net Cash provided by Operating Activities for the first quarter of fiscal 2024 was $21.5 million compared to $7.9 million for the first quarter of fiscal 2023. Free cash flow* was $19.2 million compared to $4.9 million for the first quarter of fiscal 2023. The Company ended the first quarter of fiscal 2024 with a cash balance of $77.1 million.
- Inventory at the end of the first quarter of fiscal 2024 was $53.1 million compared to $53.8 million at the end of the first quarter of fiscal 2023.
*Non-GAAP financial measures. Please see “Non-GAAP Financial Measures” and “Reconciliation of GAAP Net Income to Adjusted EBITDA,” “Reconciliation of GAAP Operating Income to Adjusted Income from Operations,” “Reconciliation of GAAP Net Income to Adjusted Net Income” and “Reconciliation of GAAP Cash from Operations to Free Cash Flow” for more information.
Subsequent Events
On May 14, 2024, the Company announced that it completed a series of debt principal payments and that its Board of Directors approved a new quarterly dividend program.
The Company made a voluntary debt prepayment of $58.2 million on May 10, 2024. The voluntary prepayment was in lieu of and incremental to the previously expected Excess Cash Flow payment of $26.6 million, which was rejected by the lenders. Following the voluntary prepayment on May 10, 2024, the Company’s cash balance was $28.2 million.
In addition, the Board of Directors declared an initial quarterly cash dividend of $0.07 per share of the Company’s common stock. The dividend is payable on June 12, 2024, to stockholders of record as of May 29, 2024. The Company intends to pay dividends quarterly in the future, subject to market conditions and approval by the Board of Directors.
Outlook
For the second quarter of fiscal 2024, incorporating the approximately $7.0 million negative impact from the calendar shift, the Company expects net sales to be flat to down 3% compared to the second quarter of fiscal 2023. The Company also expects Adjusted EBITDA to be in the range of $27.0 million to $30.0 million.
For fiscal 2024, the Company is raising its guidance and now expects net sales to grow in the range of 1% to 3% compared to fiscal 2023, and for Adjusted EBITDA to decline in the range of 1% and 3% compared to the 53-week fiscal 2023. This guidance reflects the negative impact from the loss of the 53rd week in fiscal 2023 of $7.9 million in net sales and $2.2 million in Adjusted EBITDA as well as investments to support profitable sales growth, including approximately $3 million in operating expenses related to the Company’s Order Management System (“OMS”) project.
Excluding the impact of the 53rd week as well as the operating expense investment in the OMS project, the Company expects fiscal 2024 net sales to grow in the range of 2% to 4% and Adjusted EBITDA to grow in the range of 1% to 3% compared to the prior year.
The Company continues to expect total capital expenditures of approximately $26.0 million and net store count growth of up to 5 stores to end fiscal 2024.
About J.Jill, Inc.
J.Jill is a national lifestyle brand that provides apparel, footwear and accessories designed to help its customers move through a full life with ease. The brand represents an easy, thoughtful and inspired style that celebrates the totality of all women and designs its products with its core brand ethos in mind: keep it simple and make it matter. J.Jill offers a high touch customer experience through over 200 stores nationwide and a robust ecommerce platform. J.Jill is headquartered outside Boston. For more information, please visit www.jjill.com or http://investors.jjill.com. The information included on our websites is not incorporated by reference herein.
