J. Jill Inc. seems to know what fashion the biggest female consumer is looking for.
In short: A customer with higher incomes and less sensitivity to inflation, coupled with fashion in the market, helped J.Jill’s increase sales in the second quarter.
The strong momentum of the first quarter carried over into the second quarter, where customers continued to purchase novelty fashions with higher AURs with little resistance to elevated prices.
“We saw a strong start to the quarter around Mother’s Day and heard from our store associates that she was generally getting early for her seasonal clothing and shopping for a summer full of events and travel,” analysts told during a call CEO Claire Spofford. Thursday.
Unlike some other chains that saw declines in mid-June, J.Jill saw a slowdown in sales after Mother’s Day, Spofford said.
“As the weather changes and we continue to innovate, we’re standing by her and our organization on the ground about her behaviors and the intent of the purchase,” Spofford said. “We feel confident based on what we’ve heard that she’ll be back to refresh her fall wardrobe.”
The start of the third quarter saw the company working on growing its customer base through a new “Welcome Everybody” campaign that focuses on size inclusion. While the chain has always offered plus sizes, they were in a separate section in stores and some options were only available online. The initiative brought some of the online-only size offerings to stores, though sizes 3X-4X (26-28) will still be available online only. In addition to merging the women’s collections, prices were changed so customers pay the same for an item regardless of size.
J. Jill Inc. has closed six doors this year and plans to close 10 to 14 locations, including the two stores that opened in the fourth quarter.
Net sales: For the three months ended July 30, net sales rose 1 percent to $160.3 million from $159.2 million. Comparable sales rose 0.8 percent, driven by sales in the department store channel.
Store sales increased 2 percent on higher AURs and lower promotions. Direct sales, 46 percent of total sales, fell 0.7 percent.
Chief Financial Officer Mark Webb said inventories rose 12.2 percent at the end of the quarter, driven by an increase in goods in transit after shipments increased a week or two to limit the use of air freight.
Quarterly gross margin was 70.1 percent, up 150 basis points from a year ago, as strategic price increases and cautious promotions offset last year’s product cost inflation and massive freight charges, it said.
For the six months, net sales rose 10 percent to $317.4 million from $288.3 million.
Earnings: Net income was $17.8 million, or $1.25 per diluted share, compared to a net loss of $24.6 million, or $1.98, in the year-ago quarter.
For the third quarter, J.Jill forecast revenue flat at 3 percent. Webb said the company reaffirmed the previous year’s outlook for annual sales to grow “modestly.”
For the six months, net income was $32.3 million, or $2.27 per diluted share, versus a net loss of $43 million, or $3.88, in the same period a year ago.
Getting the CEO: “We want every woman to be able to find her desired fit in products that are uniquely important to her with the confidence that J.Jill has what she’s looking for in beautiful styles and fabrications,” said Spofford.
