J.Jill, Inc. (NYSE:JILL) today announced financial results for the fourth quarter and fiscal year ended February 1, 2020.
James S. Scully, Interim Chief Executive Officer of J.Jill, Inc. stated, “Our fourth quarter results exceeded our expectations as we continued to make progress in balancing a reduction in our inventory levels while maintaining discipline with our bottom line. While pleased to end the year with inventories better positioned, we continue to see great opportunity to instill further operating disciplines within the business.”
Mr. Scully continued, “We have entered fiscal 2020 with strong focus on gross margin stabilization and recovery driven by enhanced inventory discipline and improved product assortments. I want to thank all of our teams for their hard work and dedication to J.Jill. The key tenets of the brand, including our attractive and loyal customer demographic, remain strong and we are focused on building the capabilities to capture the long term opportunities ahead for this brand.”
For the fourth quarter ended February 1, 2020:
For the fiscal year ended February 1, 2020:
The Company made a $5 million voluntary pre-payment of its term loan and ended the fourth quarter fiscal 2019 with $21.5 million in cash. Inventory at the end of the fourth quarter fiscal 2019 decreased to $72.6 million compared to $77.3 million at the end of the fourth quarter of fiscal 2018. The Company opened one store and closed four in the fourth quarter, ending the year with 287 stores.
*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
Beginning in the first quarter 2020, we will report total comparable sales excluding shipping and handling revenue. Please see the restated comparable sales table at the end of our press release.
For the first quarter of fiscal 2020, we expect total comparable sales to decrease 3% to 5% compared to a decrease of 2.4% (as adjusted) for the first quarter of fiscal 2019. Total net sales are expected to decrease 2% to 4%. Diluted earnings per share are expected to be $0.06 to $0.08, compared to diluted earnings per share of $0.10 in the first quarter of fiscal 2019.
For the full 2020 fiscal year, we expect total comparable sales to decrease 3% to 5% compared to a decrease of 3.2% (as adjusted) for the full 2019 fiscal year. Total net sales are expected to decrease 2% to 4% for fiscal 2020. Adjusted earnings per share are expected to be $0.10 to $0.14 compared to Adjusted Diluted Earnings per Share of $0.06 for the full fiscal 2019 year. Adjusted Diluted Earnings per Share excludes the impact of non-cash impairment charges and other non-recurring expenses incurred in fiscal 2019.
Conference Call Information
A conference call to discuss fourth quarter 2019 results is scheduled for today, March 4, 2020, at 8:00 a.m. Eastern Time. Those interested in participating in the call are invited to dial (844) 579-6824 or (763) 488-9145 if calling internationally. Please dial in approximately 10 minutes prior to the start of the call and reference Conference ID 9584162 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 live call and can be accessed both online and by dialing (855) 859-2056 or (404) 537-3406. The pin number to access the telephone replay is 9584162. The telephone replay will be available until Wednesday, March 11, 2020.
About J.Jill, Inc.
J.Jill is a premier omnichannel retailer and nationally recognized women’s apparel brand committed to delighting customers with great wear-now product. The brand represents an easy, thoughtful and inspired style that reflects the confidence of remarkable women who live life with joy, passion and purpose. J.Jill offers a guiding customer experience through more than 280 stores nationwide and a robust e-commerce 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 Income from Operations, Adjusted Net Income 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 Income from Operations, Adjusted Net Income and Adjusted Diluted EPS should not be considered alternatives to, or substitutes for, net income (loss) or EPS, which are calculated in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate Adjusted EBITDA, Adjusted Income from Operations, Adjusted Net Income 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 Income from Operations, Adjusted Net Income and Adjusted Diluted EPS to net income (loss) and EPS, the most directly comparable GAAP financial measures, under “Reconciliation of GAAP Net Income to Adjusted EBITDA” and “Reconciliation of GAAP Net Income to Adjusted Net Income”, “Adjusted Net Income as well as Reconciliation of GAAP Operating Income to Adjusted Income from Operations” and not rely solely on Adjusted EBITDA, Adjusted Income from Operations, Adjusted Net Income, 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.” Forward-looking statements include 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” 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 subject to inherent uncertainties, risks 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 regional, national or global political, economic, business, competitive, market and regulatory conditions, including risks regarding our ability to manage inventory or anticipate consumer demand; changes in consumer confidence and spending; our competitive environment; our failure to open new profitable stores or successfully enter new markets and other factors set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended February 2, 2019. Any forward-looking statement made in this press release 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.
|
|||||||
|
|
For the Thirteen Weeks Ended |
|||||
|
|
February 1, 2020 |
|
|
February 2, 2019 |
||
Net sales |
|
$ |
168,064 |
|
|
$ |
170,902 |
Cost of goods sold |
|
|
68,030 |
|
|
|
63,081 |
Gross profit |
|
|
100,034 |
|
|
|
107,821 |
Selling, general and administrative expenses |
|
|
100,954 |
|
|
|
99,794 |
Impairment of goodwill |
|
|
31,000 |
|
|
|
— |
Impairment of indefinite-lived intangible assets |
|
|
5,100 |
|
|
|
— |
Operating (loss) income |
|
|
(37,020 |
) |
|
|
8,027 |
Interest expense, net |
|
|
4,719 |
|
|
|
4,696 |
(Loss) income before provision for income taxes |
|
|
(41,739 |
) |
|
|
3,331 |
Income tax (benefit) provision |
|
|
(3,154 |
) |
|
|
1,237 |
Net (loss) income and total comprehensive income |
|
$ |
(38,585 |
) |
|
$ |
2,094 |
Net income per common share attributable to common shareholders |
|
|
|
|
|
|
|
Basic |
|
$ |
(0.88 |
) |
|
$ |
0.05 |
Diluted |
|
$ |
(0.88 |
) |
|
$ |
0.05 |
Weighted average number of common shares outstanding |
|
|
|
|
|
|
|
Basic |
|
|
44,017,340 |
|
|
|
43,060,392 |
Diluted |
|
|
44,017,340 |
|
|
|
44,359,599 |
|
|
For the Fifty-Two Weeks Ended |
|||||
|
|
February 1, 2020 |
|
|
February 2, 2019 |
||
Net sales |
|
$ |
691,345 |
|
|
$ |
706,262 |
Cost of goods sold |
|
|
262,766 |
|
|
|
245,982 |
Gross profit |
|
|
428,579 |
|
|
|
460,280 |
Selling, general and administrative expenses |
|
|
409,069 |
|
|
|
399,042 |
Impairment of goodwill |
|
|
119,428 |
|
|
|
— |
Impairment of indefinite-lived intangible assets |
|
|
12,100 |
|
|
|
— |
Operating (loss) income |
|
|
(112,018 |
) |
|
|
61,238 |
Interest expense, net |
|
|
19,571 |
|
|
|
19,064 |
(Loss) income before provision for income taxes |
|
|
(131,589 |
) |
|
|
42,174 |
Income tax (benefit) provision |
|
|
(3,022 |
) |
|
|
11,649 |
Net (loss) income and total comprehensive income |
|
$ |
(128,567 |
) |
|
$ |
30,525 |
Net (loss) income per common share attributable to common shareholders |
|
|
|
|
|
|
|
Basic |
|
$ |
(2.94 |
) |
|
$ |
0.71 |
Diluted |
|
$ |
(2.94 |
) |
|
$ |
0.69 |
Weighted average number of common shares outstanding |
|
|
|
|
|
|
|
Basic |
|
|
43,749,324 |
|
|
|
42,771,316 |
Diluted |
|
|
43,749,324 |
|
|
|
44,239,751 |
J.Jill, Inc.
|
|||||||
|
|
February 1, 2020 |
|
|
February 2, 2019 |
||
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash |
|
$ |
21,527 |
|
|
$ |
66,204 |
Accounts receivable |
|
|
6,568 |
|
|
|
4,007 |
Inventories, net |
|
|
72,599 |
|
|
|
77,349 |
Prepaid expenses and other current assets |
|
|
22,256 |
|
|
|
27,734 |
Total current assets |
|
|
122,950 |
|
|
|
175,294 |
Property and equipment, net |
|
|
107,645 |
|
|
|
118,044 |
Intangible assets, net |
|
|
112,814 |
|
|
|
136,177 |
Goodwill |
|
|
77,597 |
|
|
|
197,026 |
Operating lease assets, net |
|
|
211,332 |
|
|
|
— |
Other assets |
|
|
1,650 |
|
|
|
447 |
Total assets |
|
$ |
633,988 |
|
|
$ |
626,988 |
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
43,053 |
|
|
$ |
55,012 |
Accrued expenses and other current liabilities |
|
|
42,712 |
|
|
|
45,306 |
Current portion of long-term debt |
|
|
8,187 |
|
|
|
2,799 |
Current portion of operating lease liabilities |
|
|
33,875 |
|
|
|
— |
Total current liabilities |
|
|
127,827 |
|
|
|
103,117 |
Long-term debt, net of discount and current portion |
|
|
225,812 |
|
|
|
237,464 |
Operating lease liabilities, net of current portion |
|
|
208,800 |
|
|
|
— |
Deferred income taxes |
|
|
31,034 |
|
|
|
41,842 |
Other liabilities |
|
|
1,950 |
|
|
|
30,770 |
Total liabilities |
|
|
595,423 |
|
|
|
413,193 |
Shareholders’ Equity |
|
|
|
|
|
|
|
Common stock, par value $0.01 per share; 250,000,000 shares authorized;
|
|
|
441 |
|
|
|
437 |
Additional paid-in capital |
|
|
125,078 |
|
|
|
121,635 |
Accumulated (deficit) earnings |
|
|
(86,954 |
) |
|
|
91,723 |
Total shareholders’ equity |
|
|
38,565 |
|
|
|
213,795 |
Total liabilities and shareholders’ equity |
|
$ |
633,988 |
|
|
$ |
626,988 |
J.Jill, Inc.
|
|||||||
|
|
For the Thirteen Weeks Ended |
|||||
|
|
February 1, 2020 |
|
|
February 2, 2019 |
||
Net (loss) income |
|
$ |
(38,585 |
) |
|
$ |
2,094 |
Interest expense, net |
|
|
4,719 |
|
|
|
4,696 |
Income tax (benefit) provision |
|
|
(3,154 |
) |
|
|
1,237 |
Depreciation and amortization |
|
|
9,618 |
|
|
|
9,351 |
Equity-based compensation expense (a) |
|
|
428 |
|
|
|
1,056 |
Write-off of property and equipment (b) |
|
|
66 |
|
|
|
41 |
Impairment of goodwill and indefinite-lived intangible assets |
|
|
36,100 |
|
|
|
— |
Impairment of long-lived assets (c) |
|
|
261 |
|
|
|
— |
Other non-recurring expenses (d) |
|
|
2,337 |
|
|
|
— |
Adjusted EBITDA |
|
$ |
11,790 |
|
|
$ |
18,475 |
|
|
|
|
|
|
|
|
|
|
For the Fifty-Two Weeks Ended |
|||||
|
|
February 1, 2020 |
|
|
February 2, 2019 |
||
Net (loss) income |
|
$ |
(128,567 |
) |
|
$ |
30,525 |
Interest expense, net |
|
|
19,571 |
|
|
|
19,064 |
Income tax (benefit) provision |
|
|
(3,022 |
) |
|
|
11,649 |
Depreciation and amortization |
|
|
37,925 |
|
|
|
36,749 |
Equity-based compensation expense (a) |
|
|
3,972 |
|
|
|
4,010 |
Write-off of property and equipment (b) |
|
|
151 |
|
|
|
128 |
Impairment of goodwill and indefinite-lived intangible assets |
|
|
131,528 |
|
|
|
— |
Impairment of long-lived assets (c) |
|
|
2,325 |
|
|
|
— |
Other non-recurring expenses (d) |
|
|
1,597 |
|
|
|
1,346 |
Adjusted EBITDA |
|
$ |
65,480 |
|
|
$ |
103,471 |
(a) |
Represents expenses associated with equity incentive instruments granted to our management. Incentive instruments are accounted for as equity-classified awards with the related compensation expense recognized based on fair value at the date of the grants. |
(b) |
Represents net gain or loss on the disposal of fixed assets. |
(c) |
Represents impairment of long-lived assets and the change in use of a right-of-use asset. |
(d) |
Represents items management believes are not indicative of ongoing operating performance. For the fifty-two weeks ended February 1, 2020 these expenses are primarily composed of a gain from insurance proceeds, restructuring costs and expenses related to a CEO transition. For the fifty-two weeks ended February 2, 2019, these expenses include costs related to a CEO transition. |
J.Jill, Inc.
|
|||||||
|
|
For the Thirteen Weeks Ended |
|||||
|
|
February 1, 2020 |
|
|
February 2, 2019 |
||
Net (loss) income |
|
$ |
(38,585 |
) |
|
$ |
2,094 |
Interest expense, net |
|
|
4,719 |
|
|
|
4,696 |
Income tax (benefit) provision |
|
|
(3,154 |
) |
|
|
1,237 |
Impairment of goodwill and indefinite-lived intangible assets |
|
|
36,100 |
|
|
|
— |
Impairment of long-lived assets(a) |
|
|
261 |
|
|
|
— |
Other non-recurring expenses (b) |
|
|
2,337 |
|
|
|
— |
Adjusted Income from Operations |
|
$ |
1,678 |
|
|
$ |
8,027 |
|
|
For the Fifty-Two Weeks Ended |
|||||
|
|
February 1, 2020 |
|
|
February 2, 2019 |
||
Net (loss) income |
|
$ |
(128,567 |
) |
|
$ |
30,525 |
Interest expense, net |
|
|
19,571 |
|
|
|
19,064 |
Income tax (benefit) provision |
|
|
(3,022 |
) |
|
|
11,649 |
Impairment of goodwill and indefinite-lived intangible assets |
|
|
131,528 |
|
|
|
— |
Impairment of long-lived assets(a) |
|
|
2,325 |
|
|
|
— |
Other non-recurring expenses(b) |
|
|
1,597 |
|
|
|
1,346 |
Adjusted Income from Operations |
|
$ |
23,432 |
|
|
$ |
62,584 |
(a) |
Represents impairment of long-lived assets and the change in use of a right-of-use asset. |
(b) |
Represents items management believes are not indicative of ongoing operating performance. For the fifty-two weeks ended February 1, 2020 these expenses are primarily composed of a gain from insurance proceeds, restructuring costs and expenses related to a CEO transition. For the fifty-two weeks ended February 2, 2019, these expenses include costs related to a CEO transition |
J.Jill, Inc.
|
|||||||
|
|
For the Thirteen Weeks Ended |
|||||
|
|
February 1, 2020 |
|
|
February 2, 2019 |
||
Net (loss) income and total comprehensive income |
|
$ |
(38,585 |
) |
|
$ |
2,094 |
Add: Income tax (benefit) provision |
|
|
(3,154 |
) |
|
|
1,237 |
(Loss) income before income tax provision (benefit) |
|
|
(41,739 |
) |
|
|
3,331 |
Add: Impairment of goodwill and indefinite-lived intangible assets |
|
|
36,100 |
|
|
|
— |
Add: Impairment of long-lived assets (a) |
|
|
261 |
|
|
|
— |
Add: Other non-recurring expenses(b) |
|
|
1,911 |
|
|
|
— |
Add: Accelerated equity-based compensation expense |
|
|
426 |
|
|
|
— |
Adjusted (loss) income before provision for income taxes |
|
|
(3,041 |
) |
|
|
3,331 |
Less: Adjusted Tax Provision (c) |
|
|
(822 |
) |
|
|
1,237 |
Adjusted net (loss) income |
|
$ |
(2,219 |
) |
|
$ |
2,094 |
Adjusted net (loss) income per common share attributable to common shareholders |
|
|
|
|
|
|
|
Basic |
|
$ |
(0.05 |
) |
|
$ |
0.05 |
Diluted |
|
$ |
(0.05 |
) |
|
$ |
0.05 |
Weighted average number of common shares outstanding |
|
|
|
|
|
|
|
Basic |
|
|
44,017,340 |
|
|
|
43,060,392 |
Diluted |
|
|
44,017,340 |
|
|
|
44,359,599 |
|
|
For the Fifty-Two Weeks Ended |
|||||
|
|
February 1, 2020 |
|
|
February 2, 2019 |
||
Net (loss) income and total comprehensive income |
|
$ |
(128,567 |
) |
|
$ |
30,525 |
Add: Income tax (benefit) provision |
|
|
(3,022 |
) |
|
|
11,649 |
(Loss) income before income tax provision (benefit) |
|
|
(131,589 |
) |
|
|
42,174 |
Add: Impairment of goodwill and indefinite-lived intangible assets |
|
|
131,528 |
|
|
|
— |
Add: Impairment of long-lived assets (a) |
|
|
2,325 |
|
|
|
— |
Add: Other non-recurring expenses(b) |
|
|
1,171 |
|
|
|
1,346 |
Add: Accelerated equity-based compensation expense |
|
|
426 |
|
|
|
244 |
Adjusted Income before provision for income taxes |
|
|
3,861 |
|
|
|
43,764 |
Less: Adjusted Tax Provision (c) |
|
|
1,042 |
|
|
|
12,079 |
Adjusted net income |
|
$ |
2,819 |
|
|
$ |
31,685 |
Adjusted net income per common share attributable to common shareholders |
|
|
|
|
|
|
|
Basic |
|
$ |
0.06 |
|
|
$ |
0.74 |
Diluted |
|
$ |
0.06 |
|
|
$ |
0.72 |
Weighted average number of common shares outstanding |
|
|
|
|
|
|
|
Basic |
|
|
43,749,324 |
|
|
|
42,771,316 |
Diluted |
|
|
43,749,324 |
|
|
|
44,239,751 |
(a) |
Represents impairment of long-lived assets related to the change in use of a right-of-use asset. |
(b) |
Represents items management believes are not indicative of ongoing operating performance. For the fifty-two weeks ended February 1, 2020 these expenses are primarily composed of a gain from insurance proceeds and restructuring costs. For the fifty-two weeks ended February 2, 2019, these expenses include costs related to a CEO transition. |
(c) |
The adjusted tax provision for adjusted net income is estimated by applying a rate of 27% for FY19, 37.1% for the thirteen weeks ended February 2, 2019 and 27.6 for FY18, to the adjusted income before provision for income taxes. |
J.Jill, Inc.
|
|||||||||||||||||
|
|
|
|||||||||||||||
|
|
February 1, 2020 |
|
November 2, 2019 |
|
August 3, 2019 |
|
May 4, 2019 |
|
February 2, 2019 |
|
November 3, 2018 |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Reported |
|
-2.8% |
|
-7.0% |
|
-1.2% |
|
-3.3% |
|
-1.7% |
|
1.0% |
|||||
As Adjusted |
|
-2.7% |
|
-6.9% |
|
-0.9% |
|
-2.4% |
|
-1.1% |
|
1.2% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Thirteen Weeks Ended |
|||||||||||||||
|
|
August 4, 2018 |
|
May 5, 2018 |
|
February 3, 2018 |
|
October 28, 2017 |
|
July 29, 2017 |
|
April 29, 2017 |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Reported |
|
2.2% |
|
2.3% |
|
8.9% |
|
-0.6% |
|
7.8% |
|
9.9% |
|||||
As Adjusted |
|
1.8% |
|
2.5% |
|
9.1% |
|
0.1% |
|
8.3% |
|
9.9% |
|
|
For the Fiscal Year Ended |
|||||||
|
|
February 1, 2020 |
|
February 2, 2019 |
|
February 3, 2018 |
|||
|
|
|
|
|
|
|
|
|
|
As Reported |
|
-3.6% |
|
0.9% |
|
6.4% |
|||
As Adjusted |
|
-3.2% |
|
1.1% |
|
6.8% |
|||
View source version on businesswire.com: https://www.businesswire.com/news/home/20200304005142/en/
Investors:
Caitlin Churchill
ICR, Inc.
[email protected]
203-682-8200
Media:
Chris Gayton
J.Jill, Inc.
[email protected]
617-689-7916