Updated at 4:14 p.m. Friday EST
J.Jill, the specialty retailer catering to middle-aged and older women, posted a first quarter marked by strong top and bottom lines, prompting the company to raise its outlook for the year.
Net income for the quarter ended May 4 more than tripled to $16.7 million, or $1.16 per diluted share, from $4.6 million, or 32 cents per share in the first quarter of fiscal 2023.
Adjusted earnings before interest, taxes, depreciation and amortization in the quarter totaled $35.6 million and compared with $31.9 million in the first quarter of fiscal 2023. Adjusted EBITDA margin of 22.1 percent compared with 21.2 percent a year earlier.
Net sales increased 7.5 percent to $161.5 million compared with $150.2 million. The increase includes approximately $7 million due to the calendar shift associated with the 53rd week in fiscal 2023. Comparable sales rose 3.1 percent.
“We are very pleased with our first-quarter results, which exceeded expectations driven by a strong end to the period as we transitioned into the heart of our big season leading up to Mother’s Day,” Claire Spofford, president and chief executive officer of J.Jill Inc., said in a statement Friday. “We are excited and confident about the future of the J.Jill brand and business, and we are making meaningful investments in marketing, systems and new stores to realize its potential. In May, we also announced that we paid down approximately $60 million of debt and initiated an ordinary quarterly dividend program.”
Claire Spofford
Spofford’s tenure at J.Jill has been marked by efforts at raising the brand’s profile, and putting greater focus on selling at full-price casual merchandise appropriate for on the job and after hours. It’s a segment of the apparel business that’s sprung into popularity post-pandemic as people return to working in their offices and want to feel comfortable there in what they wear. J.Jill sells merchandise entirely under its own private label.
For fiscal 2024, the company is raising its guidance and now expects net sales to grow in the range of 1 to 3 percent, compared with fiscal 2023. Adjusted EBITDA is expected to decline in the range of 1 and 3 percent. This guidance reflects the negative impact from the loss of the 53rd week in fiscal 2023 as well as investments to support growth, including approximately $3 million related to an order management system project.
Previously, the company projected 2024 net sales to be flat to up in the low-single digits, and adjusted EBITDA to be down in the midsingle digits.
For the second quarter, incorporating the approximately $7 million negative impact from the calendar shift, the company expects net sales to be flat to down 3 percent compared with a year earlier. The company also expects adjusted EBITDA to be in the range of $27 million to $30 million.
Investors were impressed by J.Jill’s first-quarter performance and outlook and on Friday pushed the stock price up 7.6 percent to $37.89.
In other first-quarter statistics, direct-to-consumer sales, which represented 47 percent of total sales, were up 11.6 percent compared with the first quarter of fiscal 2023.
Gross profit was $117.7 million compared with $108.4 million in the year-ago period. Gross margin was 72.9 percent compared to 72.1 percent in the year-ago period.
