The modest growth includes an approximate $2.0m gain attributed to the fiscal calendar’s 53rd week in 2023.
Despite this growth, the brand faced a slight downturn in total company comparable sales, which encompasses both in-store and direct-to-consumer transactions, with a decrease of 0.8%. Notably, this decline was exacerbated by roughly 50 basis points due to hurricanes disrupting operations during the quarter.
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The company has established strong operational practices and shifted the organisation’s focus to emphasise full-price selling, adopting a strategy aimed at driving a return to growth, Claire Spofford, J.Jill president and CEO said in an earnings call.
Spofford also noted that the robust performance of J.Jill’s range of bottoms contributed to balancing the persistent weakness in dress sales previously mentioned. Despite dresses constituting a lesser proportion of the product mix in the latter half of the year, there has been a noticeable customer shift towards separates.
Additionally, despite a sluggish initial response to seasonal items such as sweaters and outerwear at the start of the period, an uptick in sales was observed as the season progressed, aided by targeted promotional activities and a drop in temperatures.
Key financial highlights for Q3 FY24:
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By GlobalDataJ.Jill reported net income of $12.34 for the quarter, surpassing the $11.61 recorded in Q3 of FY23. Its earnings per diluted share (EPS) remained steady at $0.80 for both current and prior-year quarters, while adjusted diluted EPS rose to $0.89 from $0.83.
The company’s gross profit dipped slightly to $107.97m compared to $108.59m in Q3 FY23, with gross margin falling from 72.0% to 71.4%.
Its selling, general and administrative expenses (SG&A) increased to $88.64 from $86.45m year-over-year; when adjusted for non-recurring items, SG&A as a percentage of net sales grew from 57.7% to 58.4%.
Operating income of J.Jill declined to $19.22m from $22.12m in the same quarter last year, with operating margin decreasing from 14.7% to 12.7%.
The direct-to-consumer segment, accounting for 45.7% of total net sales, saw a parallel increase of 0.3% relative to the third quarter of the previous fiscal year.
During this period, the company expanded its physical presence by opening three new stores and reopening one after relocation earlier in FY24 but also faced a temporary closure due to hurricane damage. As of the end of 2 November 2024, store count of J.Jill was 247 stores.
Spofford stated: “We delivered third quarter results in line with our expectations as we continued to execute the disciplined operating model yielding another quarter of healthy overall margin performance.”
Year-to-date performance:
For the 39 weeks leading up to 2 November 2024, J.Jill saw a net sales increase of 2.2% to $468.0m, up from $457.8m during the equivalent period in FY23. Total company comparable sales rose by 1.4%.
The company’s net income improved to $37.23m from $31.43m, with earnings per diluted share climbing from $2.19 to $2.48.
Gross profit reached $335.10m with a gross margin of 71.6%, slightly down from the previous year’s margin of 71.9%.
Outlook:
For Q4 FY24, J.Jill anticipates a decline in net sales between 4% and 6% compared to the longer fourth quarter of FY23 but expects comparable sales to increase by 1% to 3%. Adjusted EBITDA is projected to be between $12.0m and $14.0m for the quarter.
For the full fiscal year of 2024, expectations are set for net sales to remain relatively flat or rise by up to 1%, with comparable sales increasing by 1% to 2%. However, adjusted EBITDA is forecasted to fall by 5% to 7%, landing between $105.0m and $107.0m.
Despite these projections and the impact of hurricane-related closures, J.Jill is aiming for a net growth of four stores by the end of FY24.
“As we look ahead, we remain steadfast in our operating principles and continue to invest in strategic initiatives such as systems and new stores that we believe will enhance the omni-channel experience and broaden our reach longer-term. In addition to continuing to invest in the business, we are also pleased to further expand our total shareholder return strategy to include a new share repurchase program further underscoring our confidence in the business and the long-term opportunities that remain in front of us,” Claire Spofford added.
J.Jill also announced that Claire Spofford will retire following a distinguished career in retail. Spofford is set to continue in her current role until April 2025, working closely with the executive team and Board of Directors to facilitate a smooth transition.
