US' J.Jill expects sales to decline in Q1 FY25 amid challenging market

For the full fiscal 2025, net sales are anticipated to increase by 1 to 3 per cent, with comparable sales ranging from flat to a 2 per cent rise. Adjusted EBITDA is expected to be between $101.0 million and $106.0 million. The company plans to open 5 to 10 new stores, with total capital expenditures of approximately $25.0 million and free cash flow projected at about $40.0 million.

The full-year outlook considers the challenges of the first quarter while factoring in benefits from new store openings and enhanced omni-channel capabilities through the OMS implementation in the latter half of the fiscal, J.Jill said in a press statement.

“As we enter fiscal 2025, despite the uncertain outlook near-term with the slow start to Q1 and continued price sensitivity from customers, I am confident in the team’s ability to continue to operate with discipline while positioning the brand for long-term success. With the implementation of the new order management system underway, a pipeline of new stores building and new leadership with Mary Ellen Coyne joining later this spring, there is much to look forward to as J.Jill enters its next chapter well positioned to lean into growth,” said Claire Spofford, president and chief executive officer (CEO) of J.Jill, Inc.

Fiscal 2024 (FY24) financial overview

J.Jill, Inc’s net sales increased by 0.5 per cent YoY to $610.9 million in FY24 ended February 1, 2025. The comparable sales, including store and direct-to-consumer (DTC) sales, rose by 1.5 per cent, while DTC net sales, accounting for 47.5 per cent of total sales, grew by 1.9 per cent. The gross profit of the company was $429.9 million, with gross margin declining to 70.4 per cent.

Selling, general, and administrative (SG&A) expenses increased to $353.4 million, representing 57.9 per cent of net sales. The operating income fell to $75.7 million, with an operating margin of 12.4 per cent. Adjusted income from operations was $84.9 million, with a margin of 13.9 per cent. Interest expense decreased significantly to $15.7 million, while interest income remained stable at $2.6 million.

The net income increased to $39.5 million, with diluted earnings per share rising to $2.61 from. Adjusted net income per diluted share was $3.47. Adjusted EBITDA declined to $107.1 million, with the EBITDA margin falling to 17.5 per cent. The company opened nine new stores but temporarily closed one due to hurricane damage, leaving a total of 252 stores at the end of the fiscal.

“Fiscal 2024 performance is a testament to our disciplined operating model as we delivered on our objectives while strengthening our balance sheet, implementing robust total shareholder return strategies and investing in new store growth and systems. Although this year was not without challenges as we continued to navigate a dynamic macro environment, I am proud of all that the team has accomplished enabling us to continue to drive strong cash generation supporting the recent increase of the quarterly dividend and ongoing investment in growth strategies and capital priorities,” added Spofford.

Fourth quarter (Q4) financials

In Q4, net sales declined by 4.9 per cent YoY to $142.8 million. Comparable sales, including store and DTC sales, increased by 1.9 per cent. DTC net sales, accounting for 50.5 per cent of total sales, fell by 6.8 per cent.

The gross profit declined to $94.8 million, with gross margin decreasing to 66.3 per cent. SG&A expenses were slightly lower at $89.3 million. The operating income dropped to $5.1 million, with the operating income margin falling to 3.6 per cent. The adjusted income from operations was $9.0 million, with the margin at 6.3 per cent. The company opened five new stores during the quarter.

ALCHEMPro News Desk (SG)