J.Jill, Inc. (NYSE:JILL) today announced financial results for the first quarter ended April 29, 2023.
Claire Spofford, President and Chief Executive Officer of J.Jill, Inc. stated, “Our first quarter results demonstrate the ongoing execution of our disciplined operating model especially as we anniversaried a strong comparison to last year. Our customer continues to gravitate to the newness we are flowing regularly in our assortment, but has become increasingly discerning with her spending decisions in light of the evolving macro environment. As we move into the remainder of the year, we will maintain our disciplined approach to managing the business as we continue to navigate a dynamic environment.”
For the first quarter ended April 29, 2023:
Balance Sheet Highlights
*Non-GAAP financial measures. Please see “Non-GAAP Financial Measures” and “Reconciliation of GAAP Net Income to Adjusted EBITDA, Adjusted Income from Operations and Adjusted Net Income” for more information.
Outlook
For the second quarter of fiscal 2023, the Company expects revenues to be down mid-single digits compared to the second quarter of fiscal 2022, and for Adjusted EBITDA to be in the range of $26.0 million and $31.0 million.
For fiscal 2023, the Company now expects Annual Adjusted EBITDA dollars to be down mid-single digits compared to fiscal 2022, including approximately $2 million benefit from the 53rd week. The Company continues to expect total capital expenditures of about $18.0 million and a flat store count to end fiscal 2023.
Conference Call Information
A conference call to discuss first quarter 2023 results is scheduled for today, June 7, 2023, at 8:00 a.m. Eastern Time. Those interested in participating in the call are invited to dial (888) 330-3391 or (646) 960-0845 if calling internationally. Please dial in approximately 10 minutes prior to the start of the call and reference Conference ID 2289963 when prompted. A live audio webcast of the conference call will be available online at http://investors.jjill.com/Investors-Relations/News-Events/events.
A taped replay of the conference call will be available approximately two hours following the call and can be accessed both online and by dialing (800) 770-2030 or (647) 362-9199. The pin number to access the telephone replay is 2289963. The telephone replay will be available until Wednesday, June 14, 2023.
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.
Non-GAAP Financial Measures
To supplement our unaudited consolidated financial statements presented in accordance with generally accepted accounting principles (“GAAP”), we use the following non-GAAP measures of financial performance:
While we believe that Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss) and Adjusted Diluted EPS are useful in evaluating our business, they are non-GAAP financial measures that have limitations as analytical tools. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss) and Adjusted Diluted EPS should not be considered alternatives to, or substitutes for, Net Income (Loss), Income (Loss) from Operations or Net Income (Loss) per Diluted Share, which are calculated in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss) and Adjusted Diluted EPS differently or not at all, which reduces the usefulness of such non-GAAP financial measures as tools for comparison. We recommend that you review the reconciliation and calculation of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss) and Adjusted Diluted EPS to Net Income (Loss), Income (Loss) from Operations and Net Income (Loss) per Diluted Share, the most directly comparable GAAP financial measures, under “Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA,” “Reconciliation of GAAP Operating Income to Adjusted Income from Operations” and “Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income” and not rely solely on Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss), Adjusted Diluted EPS or any single financial measure to evaluate our business.
Forward-Looking Statements
This press release contains, and oral statements made from time to time by our representatives may contain, “forward-looking statements.” All statements that address activities, events or developments that we intend, expect or believe may occur in the future are forward-looking statements, including, among others, statements under “Outlook” and other statements identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “projects,” “goal,” “target” (although not all forward-looking statements contain these identifying words) and similar references to future periods, or by the inclusion of forecasts or projections. Forward-looking statements are based on our current expectations and assumptions regarding capital market conditions, our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are inherently subject to a number of risks, uncertainties, potentially inaccurate assumptions and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, regional, national or global political, economic, business, competitive, market and regulatory conditions, including risks regarding: (1) our ability to successfully expand and increase sales, including by opening new retail stores on a profitable basis, to maintain and enhance a strong brand image, and to optimize our omnichannel operations; (2) changes in consumer confidence, preference and spending, and our ability to adapt to such changes; (3) the competitive environment we operate in; (4) post-pandemic changes in consumer behavior and the timeline of overall economic recovery; (5) our level of indebtedness and ability to work with lenders to pursue options to refinance; and (6) other factors that may be described in our filings with the Securities and Exchange Commission (the “SEC”), including the factors set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 28, 2023. You are encouraged to read our filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties. We caution investors, potential investors and others not to place considerable reliance on the forward-looking statements in this press release and in the oral statements made by our representatives. Any such forward-looking statement speaks only as of the date on which it is made. J.Jill undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
(Tables Follow)
J.Jill, Inc.
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For the Thirteen Weeks Ended |
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|||||
|
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April 29, 2023 |
|
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April 30, 2022 |
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||
Net sales |
|
$ |
149,420 |
|
|
$ |
157,069 |
|
Costs of goods sold |
|
|
41,880 |
|
|
|
47,606 |
|
Gross profit |
|
|
107,540 |
|
|
|
109,463 |
|
Selling, general and administrative expenses |
|
|
82,146 |
|
|
|
85,578 |
|
Operating income |
|
|
25,394 |
|
|
|
23,885 |
|
Loss on debt refinancing |
|
|
12,702 |
|
|
|
— |
|
Interest expense, net |
|
|
5,057 |
|
|
|
3,658 |
|
Interest expense, net - related party |
|
|
1,074 |
|
|
|
802 |
|
Income before provision for income taxes |
|
|
6,561 |
|
|
|
19,425 |
|
Income tax provision |
|
|
1,965 |
|
|
|
5,010 |
|
Net income and total comprehensive income |
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$ |
4,596 |
|
|
$ |
14,415 |
|
Net income per common share attributable to common shareholders |
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|
|
|
|
|
||
Basic |
|
$ |
0.32 |
|
|
$ |
1.04 |
|
Diluted |
|
$ |
0.32 |
|
|
$ |
1.02 |
|
Weighted average number of common shares outstanding |
|
|
|
|
|
|
||
Basic |
|
|
14,250,811 |
|
|
|
13,874,546 |
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Diluted |
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|
14,510,008 |
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|
|
14,171,082 |
|
J.Jill, Inc.
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April 29, 2023 |
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January 28, 2023 |
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Assets |
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|
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Current assets: |
|
|
|
|
|
|
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Cash and cash equivalents |
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$ |
27,891 |
|
|
$ |
87,053 |
|
Accounts receivable |
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|
8,153 |
|
|
|
7,039 |
|
Inventories, net |
|
|
53,788 |
|
|
|
50,585 |
|
Prepaid expenses and other current assets |
|
|
17,313 |
|
|
|
16,143 |
|
Total current assets |
|
|
107,145 |
|
|
|
160,820 |
|
Property and equipment, net |
|
|
53,791 |
|
|
|
53,497 |
|
Intangible assets, net |
|
|
71,452 |
|
|
|
73,188 |
|
Goodwill |
|
|
59,697 |
|
|
|
59,697 |
|
Operating lease assets, net |
|
|
115,564 |
|
|
|
119,118 |
|
Other assets |
|
|
318 |
|
|
|
97 |
|
Total assets |
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$ |
407,967 |
|
|
$ |
466,417 |
|
Liabilities and Shareholders’ Equity (Deficit) |
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|
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|
|
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Current liabilities: |
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|
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|
|
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Accounts payable |
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$ |
41,858 |
|
|
$ |
39,306 |
|
Accrued expenses and other current liabilities |
|
|
38,846 |
|
|
|
49,730 |
|
Current portion of long-term debt |
|
|
8,750 |
|
|
|
3,424 |
|
Current portion of operating lease liabilities |
|
|
34,160 |
|
|
|
34,527 |
|
Total current liabilities |
|
|
123,614 |
|
|
|
126,987 |
|
Long-term debt, net of discount and current portion |
|
|
151,787 |
|
|
|
195,517 |
|
Long-term debt, net of discount and current portion - related party |
|
|
— |
|
|
|
9,719 |
|
Deferred income taxes |
|
|
9,956 |
|
|
|
10,059 |
|
Operating lease liabilities, net of current portion |
|
|
118,361 |
|
|
|
123,101 |
|
Other liabilities |
|
|
924 |
|
|
|
1,253 |
|
Total liabilities |
|
|
404,642 |
|
|
|
466,636 |
|
Commitments and contingencies |
|
|
|
|
|
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Shareholders’ Equity (Deficit) |
|
|
|
|
|
|
||
Common stock, par value $0.01 per share; 50,000,000 shares authorized; 10,580,802 and 10,165,361 shares issued and outstanding at April 29, 2023 and January 28, 2023, respectively |
|
|
107 |
|
|
|
102 |
|
Additional paid-in capital |
|
|
210,948 |
|
|
|
212,005 |
|
Accumulated deficit |
|
|
(207,730 |
) |
|
|
(212,326 |
) |
Total shareholders’ equity (deficit) |
|
|
3,325 |
|
|
|
(219 |
) |
Total liabilities and shareholders’ equity (deficit) |
|
$ |
407,967 |
|
|
$ |
466,417 |
|
J.Jill, Inc.
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For the Thirteen Weeks Ended |
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April 29, 2023 |
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April 30, 2022 |
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Net income |
|
$ |
4,596 |
|
|
$ |
14,415 |
|
Interest expense, net |
|
|
5,057 |
|
|
|
3,658 |
|
Interest expense, net - related party |
|
|
1,074 |
|
|
|
802 |
|
Income tax provision |
|
|
1,965 |
|
|
|
5,010 |
|
Depreciation and amortization |
|
|
5,571 |
|
|
|
6,713 |
|
Equity-based compensation expense (a) |
|
|
878 |
|
|
|
742 |
|
Write-off of property and equipment (b) |
|
|
20 |
|
|
|
92 |
|
Adjustment for costs to exit retail stores (c) |
|
|
— |
|
|
|
(243 |
) |
Loss on debt refinancing (d) |
|
|
12,702 |
|
|
|
— |
|
Impairment of long-lived assets (e) |
|
|
— |
|
|
|
108 |
|
Adjusted EBITDA |
|
$ |
31,863 |
|
|
$ |
31,297 |
|
Net sales |
|
$ |
149,420 |
|
|
$ |
157,069 |
|
Adjusted EBITDA margin |
|
|
21.3 |
% |
|
|
19.9 |
% |
(a) | Represents expenses associated with equity incentive instruments granted to our management and board of directors. Incentive instruments are accounted for as equity-classified awards with the related compensation expense recognized based on fair value at the date of the grant. |
|
(b) | Represents the net gain or loss on the disposal of fixed assets. |
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(c) | Represents non-cash adjustments associated with exiting store leases earlier than anticipated. |
|
(d) | Represents loss on the repayment of Priming Term Loan Credit Agreement and the Subordinated Term Loan Credit Agreement. |
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(e) | Represents impairment of long-lived assets related to leasehold improvements. |
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J.Jill, Inc.
|
||||||||
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|
For the Thirteen Weeks Ended |
|
|||||
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|
April 29, 2023 |
|
|
April 30, 2022 |
|
||
|
|
|
|
|
|
|
||
Operating income |
|
$ |
25,394 |
|
|
$ |
23,885 |
|
Adjustment for costs to exit retail stores (a) |
|
|
— |
|
|
|
(243 |
) |
Impairment of long-lived assets (b) |
|
|
— |
|
|
|
108 |
|
Adjusted income from operations |
|
$ |
25,394 |
|
|
$ |
23,750 |
|
|
|
|
|
|
|
|
(a) | Represents non-cash adjustments associated with exiting store leases earlier than anticipated. |
|
(b) | Represents impairment of long-lived assets related to leasehold improvements. |
|
J.Jill, Inc.
|
||||||||
|
|
For the Thirteen Weeks Ended |
|
|||||
|
|
April 29, 2023 |
|
|
April 30, 2022 |
|
||
Net income and total comprehensive income |
|
$ |
4,596 |
|
|
$ |
14,415 |
|
Add: Income tax provision |
|
|
1,965 |
|
|
|
5,010 |
|
Income before provision for income tax |
|
|
6,561 |
|
|
|
19,425 |
|
Add: Adjustment for costs to exit retail stores (a) |
|
|
— |
|
|
|
(243 |
) |
Add: Loss on debt refinancing (b) |
|
|
12,702 |
|
|
|
— |
|
Add: Impairment of long-lived assets (c) |
|
|
— |
|
|
|
108 |
|
Adjusted income before income tax provision |
|
|
19,263 |
|
|
|
19,290 |
|
Less: Adjusted tax provision (d) |
|
|
5,374 |
|
|
|
4,900 |
|
Adjusted net income |
|
$ |
13,889 |
|
|
$ |
14,390 |
|
|
|
|
|
|
|
|
||
Adjusted net income per share attributable to common shareholders |
|
|
|
|
|
|
||
Basic |
|
$ |
0.97 |
|
|
$ |
1.04 |
|
Diluted |
|
$ |
0.96 |
|
|
$ |
1.02 |
|
Weighted average number of common shares |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Basic |
|
|
14,250,811 |
|
|
|
13,874,546 |
|
Diluted |
|
|
14,510,008 |
|
|
|
14,171,082 |
|
(a) | Represents non-cash adjustments associated with exiting store leases earlier than anticipated. |
|
(b) | Represents loss on the repayment of Priming Term Loan Credit Agreement and the Subordinated Term Loan Credit Agreement. |
|
(c) | Represents impairment of long-lived assets related to leasehold improvements. |
|
(d) | The adjusted tax provision for adjusted net income is estimated by applying a rate of 27.9% for the first quarter of fiscal 2023 and 25.4% for the first quarter of fiscal 2022 to the adjusted net income before income tax provision. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230607005247/en/
Investor Relations:
Caitlin Churchill
ICR, Inc.
[email protected]
203-682-8200
Business and Financial Media:
Ariel Kouvaras
Sloane & Company
[email protected]
973-897-6241
Brand Media:
Meredith Schwenk
J.Jill, Inc.
[email protected]
617-376-4399