Le Lézard
Classified in: Business, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast

J.Jill, Inc. Announces Third Quarter FY22 Results


J.Jill, Inc. (NYSE:JILL) today announced financial results for the third quarter ended October 29, 2022.

Claire Spofford, President and Chief Executive Officer of J.Jill, Inc. stated, "We delivered better than expected third quarter earnings performance supported by our disciplined approach to flowing newness, full price selling, and inventory and expense management. These results reflect our ability to navigate within a challenging consumer environment as well as the increased planned strategic investments to support our growth strategies, including the August launch of our inclusive sizing initiative and Welcome Everybody campaign. We look forward to expanding on this progress and becoming more relevant for our core customer while also welcoming new customers."

Ms. Spofford, continued, "As we look ahead to the end of the fiscal year, we continue to take a cautious approach to our outlook. That said, we remain focused on executing against our operating model which has delivered strong financial results year to date."

For the third quarter ended October 29, 2022:

For the thirty-nine weeks ended October 29, 2022:

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 fourth quarter of fiscal 2022, the Company expects revenues to be flat to down 3% compared to the fourth quarter of fiscal 2021, and for Adjusted EBITDA to be in the range of $9.0 million and $11.0 million.

For fiscal 2022, the Company expects revenues to grow between 4.0% and 5.0% compared to fiscal 2021, and for Adjusted EBITDA to be in the range of $103 million and $105 million.

For fiscal 2022, the Company now expects total capital expenditures of about $13.0 million. The Company expects to close net 4 stores in the fourth quarter of fiscal 2022, including the opening of 1 new store late in the fourth quarter, ending the year with 243 stores.

Conference Call Information

A conference call to discuss third quarter 2022 results is scheduled for today, December 6, 2022, 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 Tuesday, December 13, 2022.

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 247 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 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 Income (Loss) from Operations, Adjusted Net Income (Loss) 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 (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 Income (Loss) from Operations, Adjusted Net Income (Loss) and Adjusted Diluted EPS to Net Income (Loss) and EPS, the most directly comparable GAAP financial measures, under "Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA and Adjusted Net Income (Loss) as well as Reconciliation of GAAP Operating Income (Loss) to Adjusted Income (Loss) from Operations" and not rely solely on Adjusted EBITDA, 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." 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, but are not limited to, 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; the impact of the COVID-19 epidemic on the Company and the economy as a whole; post-pandemic changes in customer behavior and the timeline of economic recovery; and other factors set forth under "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended January 29, 2022. 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.

Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

(Amounts in thousands, except share and per share data)

 

 

 

For the Thirteen Weeks Ended

 

 

 

October 29, 2022

 

 

October 30, 2021

 

Net sales

 

$

150,204

 

 

$

151,731

 

Costs of goods sold

 

 

45,181

 

 

 

47,196

 

Gross profit

 

 

105,023

 

 

 

104,535

 

Selling, general and administrative expenses

 

 

84,873

 

 

 

85,531

 

Impairment of long-lived assets

 

 

1,300

 

 

 

?

 

Operating income

 

 

18,850

 

 

 

19,004

 

Interest expense

 

 

4,348

 

 

 

4,567

 

Interest expense, net - related party

 

 

1,092

 

 

 

607

 

Income before provision for income taxes

 

 

13,410

 

 

 

13,830

 

Income tax provision

 

 

4,491

 

 

 

2,592

 

Net income and total comprehensive income

 

$

8,919

 

 

$

11,238

 

Net income per common share attributable to common shareholders

 

 

 

 

 

 

Basic

 

$

0.64

 

 

$

0.81

 

Diluted

 

$

0.62

 

 

$

0.79

 

Weighted average number of common shares outstanding

 

 

 

 

 

 

Basic

 

 

13,962,467

 

 

 

13,798,130

 

Diluted

 

 

14,297,925

 

 

 

14,174,218

 

 

J.Jill, Inc.

Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)

(Amounts in thousands, except share and per share data)

 

 

 

For the Thirty-Nine Weeks Ended

 

 

 

October 29, 2022

 

 

October 30, 2021

 

Net sales

 

$

467,616

 

 

$

440,053

 

Costs of goods sold

 

 

140,656

 

 

 

138,339

 

Gross profit

 

 

326,960

 

 

 

301,714

 

Selling, general and administrative expenses

 

 

254,624

 

 

 

250,516

 

Impairment of long-lived assets

 

 

1,408

 

 

 

?

 

Operating income

 

 

70,928

 

 

 

51,198

 

Fair value adjustment of derivative

 

 

?

 

 

 

2,775

 

Fair value adjustment of warrants - related party (a)

 

 

?

 

 

 

56,984

 

Interest expense, net

 

 

11,553

 

 

 

13,130

 

Interest expense, net - related party

 

 

2,823

 

 

 

1,597

 

Income (loss) before provision for income taxes

 

 

56,552

 

 

 

(23,288

)

Income tax provision

 

 

15,413

 

 

 

8,430

 

Net income (loss) and total comprehensive income (loss)

 

$

41,139

 

 

$

(31,718

)

Net Income (loss) per common share attributable to common shareholders:

 

 

 

 

 

 

Basic

 

$

2.95

 

 

$

(2.65

)

Diluted

 

$

2.89

 

 

$

(2.65

)

Weighted average number of common shares outstanding:

 

 

 

 

 

 

Basic

 

 

13,922,460

 

 

 

11,971,405

 

Diluted

 

 

14,240,486

 

 

 

11,971,405

 

(a)

The fair value adjustment of warrants due to the increase in J.Jill's stock price from January 30, 2021 to May 31, 2021.

 

J.Jill, Inc.

Consolidated Balance Sheets

(Unaudited)

(Amounts in thousands, except common share data)

 

 

 

October 29, 2022

 

 

January 29, 2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

90,080

 

 

$

35,957

 

Accounts receivable, net

 

 

7,979

 

 

 

5,811

 

Inventories, net

 

 

60,129

 

 

 

56,024

 

Prepaid expenses and other current assets

 

 

26,490

 

 

 

25,456

 

Total current assets

 

 

184,678

 

 

 

123,248

 

Property and equipment, net

 

 

49,030

 

 

 

57,329

 

Intangible assets, net

 

 

75,069

 

 

 

80,711

 

Goodwill

 

 

59,697

 

 

 

59,697

 

Operating lease assets, net

 

 

120,848

 

 

 

130,744

 

Other assets

 

 

78

 

 

 

120

 

Total assets

 

$

489,400

 

 

$

451,849

 

Liabilities and Shareholders' Deficit

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

47,843

 

 

$

49,924

 

Accrued expenses and other current liabilities

 

 

63,724

 

 

 

48,853

 

Current portion of long-term debt

 

 

2,739

 

 

 

7,692

 

Current portion of operating lease liabilities

 

 

34,517

 

 

 

32,276

 

Total current liabilities

 

 

148,823

 

 

 

138,745

 

Long-term debt, net of discount and current portion

 

 

196,446

 

 

 

196,511

 

Long-term debt, net of discount and current portion - related party

 

 

8,428

 

 

 

5,605

 

Deferred income taxes

 

 

10,233

 

 

 

10,704

 

Operating lease liabilities, net of current portion

 

 

126,205

 

 

 

143,207

 

Other liabilities

 

 

1,257

 

 

 

1,731

 

Total liabilities

 

 

491,392

 

 

 

496,503

 

Commitments and contingencies

 

 

 

 

 

 

Shareholders' Deficit

 

 

 

 

 

 

Common stock, par value $0.01 per share; 50,000,000 shares authorized; 10,151,938 and 10,001,422 shares issued and outstanding at October 29, 2022 and January 29, 2022, respectively

 

 

102

 

 

 

100

 

Additional paid-in capital

 

 

211,268

 

 

 

209,747

 

Accumulated deficit

 

 

(213,362

)

 

 

(254,501

)

Total shareholders' deficit

 

 

(1,992

)

 

 

(44,654

)

Total liabilities and shareholders' deficit

 

$

489,400

 

 

$

451,849

 

 

J.Jill, Inc.

Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA

(Unaudited)

(Amounts in thousands)

 

 

 

For the Thirteen Weeks Ended

 

 

 

October 29, 2022

 

 

October 30, 2021

 

Net income

 

$

8,919

 

 

$

11,238

 

Interest expense, net

 

 

4,348

 

 

 

4,567

 

Interest expense, net - related party

 

 

1,092

 

 

 

607

 

Income tax provision

 

 

4,491

 

 

 

2,592

 

Depreciation and amortization

 

 

6,406

 

 

 

7,227

 

Equity-based compensation expense (b)

 

 

897

 

 

 

789

 

Write-off of property and equipment (c)

 

 

68

 

 

 

171

 

Adjustment for costs to exit retail stores (d)

 

 

?

 

 

 

(471

)

Impairment of long-lived assets (e)

 

 

1,300

 

 

 

?

 

Other non-recurring items (f)

 

 

2

 

 

 

240

 

Adjusted EBITDA

 

$

27,523

 

 

$

26,960

 

Net sales

 

$

150,204

 

 

$

151,731

 

Adjusted EBITDA margin

 

 

18.3

%

 

 

17.8

%

 

 

For the Thirty-Nine Weeks Ended

 

 

 

October 29, 2022

 

 

October 30, 2021

 

 

 

 

 

 

 

 

Net income (loss)

 

$

41,139

 

 

$

(31,718

)

Fair value adjustment of derivative

 

 

?

 

 

 

2,775

 

Fair value adjustment of warrants - related party (a)

 

 

?

 

 

 

56,984

 

Interest expense, net

 

 

11,553

 

 

 

13,130

 

Interest expense, net - related party

 

 

2,823

 

 

 

1,597

 

Income tax provision

 

 

15,413

 

 

 

8,430

 

Depreciation and amortization

 

 

19,450

 

 

 

22,098

 

Equity-based compensation expense (b)

 

 

2,615

 

 

 

1,881

 

Write-off of property and equipment (c)

 

 

231

 

 

 

887

 

Adjustment for costs to exit retail stores (d)

 

 

(246

)

 

 

(1,181

)

Impairment of long lived assets (e)

 

 

1,408

 

 

 

?

 

Other non-recurring items (f)

 

 

6

 

 

 

1,708

 

Adjusted EBITDA

 

$

94,392

 

 

$

76,591

 

Net sales

 

$

467,616

 

 

$

440,053

 

Adjusted EBITDA margin

 

 

20.2

%

 

 

17.4

%

(a)

The fair value adjustment of warrants due to the increase in J.Jill's stock price through May 31, 2021.

(b)

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.

(c)

Represents the net gain or loss on the disposal of fixed assets.

(d)

Represents non-cash adjustments associated with exiting store leases earlier than anticipated.

(e)

Represents impairment of long-lived assets related primarily to right-of-use assets and leasehold improvements.

(f)

Represents items management believes are not indicative of ongoing operating performance, including professional fees, retention expenses and costs related to the COVID-19 pandemic.

 

J.Jill, Inc.

Reconciliation of GAAP Operating Income to Adjusted Income from Operations

(Unaudited)

(Amounts in thousands)

 

 

 

For the Thirteen Weeks Ended

 

 

 

October 29, 2022

 

 

October 30, 2021

 

 

 

 

 

 

 

 

Operating income

 

$

18,850

 

 

$

19,004

 

Adjustment for costs to exit retail stores (a)

 

 

?

 

 

 

(471

)

Impairment of long-lived assets (b)

 

 

1,300

 

 

 

?

 

Other non-recurring items (c)

 

 

2

 

 

 

240

 

Adjusted income from operations

 

$

20,152

 

 

$

18,773

 

 

 

 

 

 

 

 

 

 

For the Thirty-Nine Weeks Ended

 

 

 

October 29, 2022

 

 

October 30, 2021

 

 

 

 

 

 

 

 

Operating income

 

$

70,928

 

 

$

51,198

 

Adjustment for costs to exit retail stores (a)

 

 

(246

)

 

 

(1,181

)

Impairment of long-lived assets (b)

 

 

1,408

 

 

 

?

 

Other non-recurring items (c)

 

 

6

 

 

 

1,708

 

Adjusted income from operations

 

$

72,096

 

 

$

51,725

 

(a)

Represents non-cash adjustments associated with exiting store leases earlier than anticipated.

(b)

Represents impairment of long-lived assets related primarily to right-of-use assets and leasehold improvements.

(c)

Represents items management believes are not indicative of ongoing operating performance, including professional fees, retention expenses and costs related to the COVID-19 pandemic.

 

J.Jill, Inc.

Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income

(Unaudited)

(Amounts in thousands, except share and per share data)

 

 

 

For the Thirteen Weeks Ended

 

 

 

October 29, 2022

 

 

October 30, 2021

 

Net income and total comprehensive income

 

$

8,919

 

 

$

11,238

 

Add: Income tax provision

 

 

4,491

 

 

 

2,592

 

Income before provision for income tax

 

 

13,410

 

 

 

13,830

 

Add: Adjustment for costs to exit retail stores (b)

 

 

?

 

 

 

(471

)

Add: Impairment of long-lived assets (c)

 

 

1,300

 

 

 

?

 

Add: Other non-recurring items (d)

 

 

2

 

 

 

240

 

Adjusted income before income tax provision

 

 

14,712

 

 

 

13,599

 

Less: Adjusted tax provision (e)

 

 

3,737

 

 

 

4,379

 

Adjusted net income

 

$

10,975

 

 

$

9,220

 

 

 

 

 

 

 

 

Adjusted net income per share attributable to common shareholders

 

 

 

 

 

 

Basic

 

$

0.79

 

 

$

0.67

 

Diluted

 

$

0.77

 

 

$

0.65

 

Weighted average number of common shares

 

 

 

 

 

 

Basic

 

 

13,962,467

 

 

 

13,798,130

 

Diluted

 

 

14,297,925

 

 

 

14,174,218

 

 

 

For the Thirty-Nine Weeks Ended

 

 

 

October 29, 2022

 

 

October 30, 2021

 

Net income (loss) and total comprehensive income (loss)

 

$

41,139

 

 

$

(31,718

)

Add: Income tax provision

 

 

15,413

 

 

 

8,430

 

Income (loss) before provision for income tax

 

 

56,552

 

 

 

(23,288

)

Add: Fair value adjustment of derivative

 

 

?

 

 

 

2,775

 

Add: Fair value adjustment of warrants - related party (a)

 

 

?

 

 

 

56,984

 

Add: Adjustment for costs to exit retail stores (b)

 

 

(246

)

 

 

(1,181

)

Add: Impairment of long-lived assets (c)

 

 

1,408

 

 

 

?

 

Add: Other non-recurring items (d)

 

 

6

 

 

 

1,708

 

Adjusted income before income tax provision

 

 

57,720

 

 

 

36,998

 

Less: Adjusted tax provision(e)

 

 

14,661

 

 

 

11,913

 

Adjusted net income

 

$

43,059

 

 

$

25,085

 

 

 

 

 

 

 

 

Adjusted net income per share attributable to common shareholders

 

 

 

 

 

 

Basic

 

$

3.09

 

 

$

2.10

 

Diluted

 

$

3.02

 

 

$

1.84

 

Weighted average number of common shares

 

 

 

 

 

 

Basic

 

 

13,922,460

 

 

 

11,971,405

 

Diluted

 

 

14,240,486

 

 

 

13,657,543

 

(a)

The fair value adjustment of warrants due to the increase in J.Jill's stock price through May 31, 2021.

(b)

Represents non-cash adjustments associated with exiting store leases earlier than anticipated.

(c)

Represents impairment of long-lived assets related primarily to right-of-use assets and leasehold improvements.

(d)

Represents items management believes are not indicative of ongoing operating performance, including professional fees, retention expenses and costs related to the COVID-19 pandemic.

(e)

The adjusted tax provision for adjusted net income is estimated by applying a rate of 25.4% for the third quarter of fiscal 2022 and 32.2% for the third quarter of fiscal 2021 to the adjusted income before income tax provision.

 


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