QUINCY, Mass.--(BUSINESS WIRE)--
J.Jill, Inc. (NYSE:JILL) today announced financial results for the first
quarter ended May 4, 2019.
Linda Heasley, President and CEO of J.Jill, Inc. stated, “We are
disappointed with our first quarter performance and are taking immediate
actions to clear excess inventory and position the business for improved
results in the second half of the year. We are early in the process of
executing against our updated long-term strategies, and our new
leadership team across key areas of the business is now in place and
will begin to have greater impacts on the business. We are incorporating
key learnings from the first quarter and will continue to assess
investments in technology and process improvements to ensure the team
has the tools to satisfy our core customers and capture the
opportunities we see ahead for the J.Jill brand.”
For the first quarter ended May 4, 2019:
-
Total net sales for the thirteen weeks ended May 4, 2019 were $176.5
million versus $181.5 million for the thirteen weeks ended May 5, 2018.
-
Total company comparable sales, which includes comparable store and
direct to consumer sales, decreased by 3.3%.
-
Direct to consumer net sales represented 41.9% of total net sales,
compared to 40.5% in the first quarter of fiscal 2018.
-
Gross profit decreased to $116.3 million from $120.3 million in the
first quarter of fiscal 2018. Gross margin was 65.9% compared to first
quarter gross margin of 66.3% in fiscal 2018.
-
SG&A was $105.4 million compared to $100.3 million in the first
quarter of fiscal 2018. First quarter 2018 SG&A included $1.3 million
of non-recurring expenses and $0.2 million of accelerated stock
compensation expense as a result of a CEO transition. Excluding these
non-recurring expenses, SG&A as a percentage of total net sales was
59.8% compared to 54.4% in the first quarter of fiscal 2018.
-
Income from operations decreased to $10.8 million from $20.0 million
in the first quarter of fiscal 2018, which is inclusive of
non-recurring SG&A expenses.
-
Interest expense increased to $5.0 million from $4.8 million in the
first quarter of fiscal 2018.
-
Income tax expense was $1.4 million compared to $4.0 million in the
first quarter of fiscal 2018, and the effective tax rate was 24.8%
compared to 26.1% in the first quarter of 2018.
-
Net income decreased to $4.4 million from $11.3 million in the first
quarter of fiscal 2018, which is inclusive of non-recurring SG&A
expenses.
-
Diluted earnings per share was $0.10 compared to $0.26 in the first
quarter of fiscal 2018, which included the impact of one-time
expenses. Excluding these impacts, Adjusted Diluted Earnings per Share*
for the first quarter of fiscal 2018 was $0.29.
-
Adjusted EBITDA* for the first quarter of fiscal 2019
decreased by 31.9% to $21.5 million from $31.5 million in the first
quarter of fiscal 2018. As a percentage of total net sales, Adjusted
EBITDA was 12.2% compared to 17.4% in the first quarter of fiscal 2018.
The Company ended the first quarter fiscal 2019 with $14.3 million in
cash. Inventory at the end of the first quarter fiscal 2019 increased to
$85.4 million compared to $77.5 million at the end of the first quarter
of fiscal 2018. The Company opened two stores and closed one in the
first quarter and ended the quarter with 283 stores.
* Non-GAAP financial measures. Please see “Non-GAAP
Financial Measures” and “Reconciliation of GAAP Net Income to Adjusted
EBITDA and Adjusted Net Income” for more information.
Outlook
For the second quarter of fiscal 2019, we expect total comparable sales
to decrease 1% to 3% with total net sales expected to be -1% to +1%.
Diluted earnings per share is expected to be -$0.08 to -$0.10, including
a decrease of approximately $0.03 due to our technology investment,
compared to diluted earnings per share of $0.23 and Adjusted Diluted
Earnings per Share of $0.24 in fiscal 2018.
We are revising our outlook for the full 2019 fiscal year. We expect
total comparable sales to decrease 2% to 4% with total net sales
expected to be flat to -2%. Diluted earnings per share is expected to be
in the range of $0.17 to $0.21, which includes a decrease of $0.09 to
$0.10 due to our technology investments, compared to diluted earnings
per share of $0.69 and Adjusted Diluted Earnings per Share of $0.72 in
fiscal 2018.
Conference Call Information
A conference call to discuss first quarter 2019 results is scheduled for
today, May 30, 2019, 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
4596864 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 4596864. The telephone replay will be available
until Thursday, June 6, 2019.
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.
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:
-
Adjusted EBITDA, which represents net income (loss) plus interest
expense, provision (benefit) for income taxes, depreciation and
amortization, equity-based compensation expense, write-off of property
and equipment, and other non-recurring expenses and one-time items. We
present Adjusted EBITDA on a consolidated basis because management
uses it as a supplemental measure in assessing our operating
performance, and we believe that it is helpful to investors,
securities analysts and other interested parties as a measure of our
comparative operating performance from period to period. We also use
Adjusted EBITDA as one of the primary methods for planning and
forecasting overall expected performance of our business and for
evaluating on a quarterly and annual basis actual results against such
expectations. Further, we recognize Adjusted EBITDA as a commonly used
measure in determining business value and as such, use it internally
to report results.
-
Adjusted Net Income, which represents net income (loss) plus other
non-recurring expenses and one-time items. We present Adjusted Net
Income on a consolidated basis because management uses it as a
supplemental measure in assessing our operating performance, and we
believe that it is helpful to investors, securities analysts and other
interested parties as a measure of our comparative operating
performance from period to period.
-
Adjusted Diluted Earnings per Share (“Adjusted Diluted EPS”)
represents Adjusted Net Income divided by the number of fully diluted
shares outstanding. Adjusted Diluted EPS is presented as a
supplemental measure in assessing our operating performance, and we
believe that it is helpful to investors, securities analysts and other
interested parties as a measure of our comparative operating
performance from period to period.
While we believe that Adjusted EBITDA, 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 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 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 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 Adjusted Net Income” and not rely solely on Adjusted
EBITDA, 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 risk 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 10K. 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)
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J.Jill, Inc.
Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
(Amounts in thousands, except share and per share data)
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For the Thirteen Weeks Ended
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May 4, 2019
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May 5, 2018
|
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Net sales
|
|
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$
|
176,452
|
|
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$
|
181,541
|
|
Cost of goods sold
|
|
|
|
60,196
|
|
|
|
61,200
|
|
Gross profit
|
|
|
|
116,256
|
|
|
|
120,341
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Selling, general and administrative expenses
|
|
|
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105,445
|
|
|
|
100,294
|
|
Operating income
|
|
|
|
10,811
|
|
|
|
20,047
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|
Interest expense
|
|
|
|
5,007
|
|
|
|
4,817
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Income before provision for income taxes
|
|
|
|
5,804
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|
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15,230
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Provision for income taxes
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|
|
1,438
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|
|
|
3,972
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Net income and total comprehensive income
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$
|
4,366
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|
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$
|
11,258
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Net income per common share attributable to common shareholders
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|
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Basic
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$
|
0.10
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|
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$
|
0.27
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Diluted
|
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$
|
0.10
|
|
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$
|
0.26
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Weighted average number of common shares outstanding
|
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|
|
|
|
|
|
|
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Basic
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43,327,519
|
|
|
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42,216,331
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Diluted
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|
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44,478,153
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43,407,414
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J.Jill, Inc.
Consolidated Balance Sheets
(Unaudited)
(Amounts in thousands, except common share data)
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May 4, 2019
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February 2, 2019
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Assets
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Current assets:
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Cash
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$
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14,290
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$
|
66,204
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Accounts receivable
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7,647
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|
4,007
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Inventories, net
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85,369
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77,349
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Prepaid expenses and other current assets
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28,102
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27,734
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Total current assets
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135,408
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175,294
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Property and equipment, net
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116,477
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118,044
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Intangible assets, net
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133,361
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136,177
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Goodwill
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197,026
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197,026
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Operating lease assets, net
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221,262
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—
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Other assets
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|
306
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|
|
|
447
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Total assets
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$
|
803,840
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$
|
626,988
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Liabilities and Shareholders’ Equity
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Current liabilities:
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Accounts payable
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$
|
55,102
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|
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$
|
55,012
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Accrued expenses and other current liabilities
|
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48,460
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|
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|
45,306
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Current portion of long-term debt
|
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2,799
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|
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2,799
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Current portion of operating lease liabilities
|
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32,677
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|
|
—
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Total current liabilities
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139,038
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103,117
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Long-term debt, net of discount and current portion
|
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237,120
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|
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237,464
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Deferred income taxes
|
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|
41,039
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|
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|
41,842
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Operating lease liabilities, net of current portion
|
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|
216,493
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|
|
|
—
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Other liabilities
|
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|
2,150
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|
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|
30,770
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Total liabilities
|
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635,840
|
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413,193
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Commitments and contingencies
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Shareholders’ Equity
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Common stock, par value $0.01 per share; 250,000,000 shares
authorized;
44,097,797 and 43,672,418 shares issued and outstanding at May 4,
2019 and
February 2, 2019, respectively
|
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441
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|
437
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Additional paid-in capital
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121,565
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121,635
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Accumulated earnings
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45,994
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91,723
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Total shareholders’ equity
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168,000
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|
|
|
213,795
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Total liabilities and shareholders’ equity
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$
|
803,840
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$
|
626,988
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|
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J.Jill, Inc.
Reconciliation of GAAP Net Income to Adjusted EBITDA
(Unaudited)
(Amounts in thousands)
|
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For the Thirteen Weeks Ended
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May 4, 2019
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May 5, 2018
|
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Net income
|
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$
|
4,366
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$
|
11,258
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Interest expense, net
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5,007
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|
4,817
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Provision for income taxes
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1,438
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3,972
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Depreciation and amortization
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9,452
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9,357
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Equity-based compensation expense (a) |
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1,202
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|
760
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Write-off of property and equipment (b) |
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6
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12
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Other non-recurring expenses (c) |
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—
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1,346
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Adjusted EBITDA
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$
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21,471
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$
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31,522
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(a):
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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 grants.
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(b):
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Represents net gain or loss on the disposal of fixed assets.
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(c):
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Represents items management believes are not indicative of ongoing
operating performance. For the thirteen weeks ended May 5, 2018,
these expenses include costs related to a CEO transition.
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J.Jill, Inc.
Reconciliation of GAAP Net Income to Adjusted Net Income
(Unaudited)
(Amounts in thousands, except share and per share data)
|
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For the Thirteen Weeks Ended
|
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May 4, 2019
|
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May 5, 2018
|
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Net income and total comprehensive income
|
|
$
|
4,366
|
|
|
$
|
11,258
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|
Add: Provision for income taxes
|
|
|
1,438
|
|
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|
3,972
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Income before provision for income taxes
|
|
|
5,804
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|
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|
15,230
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Add: Other non-recurring expenses(a) |
|
|
—
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1,346
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Add: Accelerated equity-based compensation
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—
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244
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Adjusted Income before provision for income taxes
|
|
|
5,804
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|
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|
16,820
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Less: Adjusted Tax Provision(b) |
|
|
1,567
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|
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|
4,373
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Adjusted net income
|
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$
|
4,237
|
|
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$
|
12,447
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Adjusted net income per common share attributable to common
shareholders
|
|
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Basic
|
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$
|
0.10
|
|
|
$
|
0.29
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Diluted
|
|
$
|
0.10
|
|
|
$
|
0.29
|
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Weighted average number of common shares outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
|
43,327,519
|
|
|
|
42,216,331
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Diluted
|
|
|
44,478,153
|
|
|
|
43,407,414
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(a):
|
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Represents items management believes are not indicative of ongoing
operating performance. For the thirteen weeks ended May 5, 2018,
these expenses include costs related to a CEO transition.
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(b):
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The adjusted tax provision for adjusted net income is estimated by
applying the effective tax rates of 27.0% and 26.0% for the thirteen
weeks ended May 4, 2019 and May 5, 2018, respectively, to the
adjusted income before provision for income taxes.
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View source version on businesswire.com:
https://www.businesswire.com/news/home/20190530005100/en/
Investors:
Caitlin Churchill/Joseph Teklits
ICR, Inc.
investors@jjill.com
203-682-8200
Media:
Chris
Gayton
J.Jill, Inc.
media@jjill.com
617-689-7916
Source: J.Jill, Inc.