Financial Data and Key Metrics Changes - Total company sales for Q1 2025 were approximately $154 million, down 4.9% compared to Q1 2024, with comparable sales declining 5.7% [13][14] - Q1 gross profit was about $110 million, a decrease of $7 million compared to Q1 2024, with a gross margin of 71.8%, down 110 basis points year-over-year [14][15] - Adjusted EBITDA for the quarter was $27.3 million, compared to $35.6 million in Q1 2024, while adjusted net income per diluted share was $0.88, down from $1.22 last year [15][16] - Cash generated from operations was about $5.3 million, resulting in ending cash of approximately $31 million with no borrowings against the ABL [16][22] Business Line Data and Key Metrics Changes - Store sales for Q1 were down about 4.4% compared to Q1 2024, while direct sales, representing about 47% of total sales, were down 5.4% [14] - The increase in SG&A expenses was primarily driven by store expenses associated with five new stores and OMS-related costs, totaling approximately $91 million for the quarter [15] Market Data and Key Metrics Changes - The macroeconomic environment remained volatile, impacting customer behavior, particularly in April and May, leading to a more discerning customer spending pattern [12][13] - Total reported inventories were up about 14% at the end of Q1 compared to the previous year, primarily due to an extra week in the supply chain initiated last year [17] Company Strategy and Development Direction - The company is focused on leveraging investments made in stores, marketing, and systems, with a commitment to maintaining a disciplined approach to inventory management and strategic pricing [9][20] - The new CEO emphasized the importance of building authentic connections with customers and identified opportunities for multichannel expansion and product assortment improvements [5][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term resiliency of the customer base but acknowledged near-term uncertainties related to tariffs and macroeconomic conditions [13][20] - The company has withdrawn its prior full-year guidance to allow the new CEO time to assess the business and develop future strategies [19][56] Other Important Information - The company plans to maintain its quarterly dividend of $0.08 per share and continue share repurchase activities, with approximately $21 million remaining on the repurchase authorization [21][22] - The OMS system cutover was successful, although it had a slightly larger impact on Q1 performance than anticipated, with ongoing efforts to ramp up ship-from-store capabilities [12][38] Q&A Session Summary Question: What strategies were implemented during tariffs at J. McLaughlin, and what are the opportunities for J. Jill? - Management discussed strategies around tariff exposure, including vendor negotiations and order adjustments, while emphasizing the importance of newness in the product assortment [28][30] Question: How is the company planning to roll out new products while managing tariff dynamics? - The company is making small adjustments to the product line and focusing on inventory positioning to align with current demand trends [43][45] Question: What are the plans for new store openings and their performance? - The company has lowered its new store opening guidance due to timing but remains optimistic about long-term growth opportunities, with new stores performing in line with expectations [75][76]

[First Quarter Fiscal 2025 Performance Summary](index=1&type=section&id=First%20Quarter%20Fiscal%202025%20Performance%20Summary) The company reported a decline in key Q1 FY25 financial metrics and introduced commentary from its new CEO [Key Financial Highlights (Q1 FY25 vs Q1 FY24)](index=1&type=section&id=Key%20Financial%20Highlights%20(Q1%20FY25%20vs%20Q1%20FY24)) J.Jill, Inc. reported a decline in key financial metrics for Q1 FY25 compared to Q1 FY24, including net sales, gross profit, and net income | Metric | Q1 FY25 (Millions) | Q1 FY24 (Millions) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | | Net Sales | $153.6 | $161.5 | -4.9% | | Total Company Comparable Sales | -5.7% | N/A | -5.7% | | Direct to Consumer Net Sales (% of total) | 46.7% | N/A | -5.4% | | Gross Profit | $110.4 | $117.7 | -6.3% | | Gross Margin | 71.8% | 72.9% | -1.1 pp | | SG&A | $91.1 | $89.1 | +2.2% | | Operating Income | $19.1 | $28.4 | -32.8% | | Operating Income Margin | 12.4% | 17.6% | -5.2 pp | | Net Income | $11.7 | $16.7 | -30.0% | | Net Income per Diluted Share | $0.76 | $1.16 | -34.4% | | Adjusted EBITDA | $27.3 | $35.6 | -23.3% | | Adjusted EBITDA Margin | 17.8% | 22.1% | -4.3 pp | - Net sales for Q1 FY25 included an approximately **$2 million headwind** related to the OMS cutover[3](index=3&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) The new CEO highlighted the brand's solid fundamentals and strengthening omni-channel capabilities while navigating a challenging macro environment - New CEO Mary Ellen Coyne joined in early May, focusing on immersing in the business, engaging with teams, visiting stores, and interacting with associates and customers[2](index=2&type=chunk) - The company possesses **solid fundamentals**, a lean operating model, and strengthening omni-channel capabilities[2](index=2&type=chunk) - The company is navigating a **challenging macro environment** while establishing plans for the future[2](index=2&type=chunk) [Capital Allocation and Liquidity](index=2&type=section&id=Capital%20Allocation%20and%20Liquidity) The company detailed its capital return activities and provided an overview of its balance sheet and cash flow position [Share Repurchase Authorization](index=2&type=section&id=Share%20Repurchase%20Authorization) The company continued its share repurchase program in Q1 FY25, with $21.0 million remaining under the current authorization | Metric | Q1 FY25 | | :-------------------------------- | :------- | | Shares Repurchased | 186,800 | | Average Price per Share | $18.84 | | Total Cost | ~$3.5 million | - **$21.0 million remained** under the $25.0 million share repurchase program as of May 3, 2025, expiring by December 6, 2026[7](index=7&type=chunk) [Quarterly Dividend Payment](index=2&type=section&id=Quarterly%20Dividend%20Payment) The company declared and paid a quarterly cash dividend and announced the subsequent quarter's dividend - A quarterly cash dividend of **$0.08 per share** was declared on March 19, 2025, payable April 16, 2025[8](index=8&type=chunk) - Another cash dividend of **$0.08 per share** was declared on June 3, 2025, payable July 9, 2025[8](index=8&type=chunk) [Balance Sheet and Cash Flow Overview](index=2&type=section&id=Balance%20Sheet%20and%20Cash%20Flow%20Overview) The company's balance sheet expanded, while cash and cash equivalents decreased and inventory levels rose year-over-year | Metric | May 3, 2025 (Thousands) | Feb 1, 2025 (Thousands) | | :-------------------------------- | :---------------------- | :---------------------- | | Total Assets | $432,896 | $417,699 | | Total Liabilities | $320,923 | $311,930 | | Total Shareholders' Equity | $111,973 | $105,769 | | Cash and Cash Equivalents | $31,245 | $35,427 | | Inventories, net | $60,557 | $61,295 | - Inventory at the end of Q1 FY25 was **$60.6 million**, up from $53.1 million at the end of Q1 FY24[10](index=10&type=chunk) | Metric | Q1 FY25 (Millions) | Q1 FY24 (Millions) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | | Net Cash provided by Operating Activities | $5.3 | $21.5 | -75.3% | | Free Cash Flow | $2.6 | $19.2 | -86.5% | [Business Outlook](index=2&type=section&id=Business%20Outlook) The company withdrew its fiscal 2025 guidance due to macroeconomic uncertainty and a recent leadership transition [Fiscal Year 2025 Guidance Update](index=2&type=section&id=Fiscal%20Year%202025%20Guidance%20Update) J.Jill withdrew its prior fiscal 2025 guidance and suspended forward guidance, except for capital expenditures and store openings - Prior fiscal 2025 guidance has been **withdrawn** due to increased macroeconomic uncertainty and recent leadership transition[9](index=9&type=chunk) - The company is **temporarily suspending** its practice of providing forward guidance, except for total capital expenditures and net new store openings[9](index=9&type=chunk) | Metric | FY25 Outlook | | :-------------------------------- | :-------------------- | | Total Capital Expenditures | $20.0 million to $25.0 million | | Net New Store Growth | 1 to 5 new stores | - The company closed three stores in Q1 FY25, with the store count at **249 stores** at quarter-end, compared to 244 stores at the end of Q1 FY24[10](index=10&type=chunk) [Company Information](index=4&type=section&id=Company%20Information) This section provides an overview of the company's business, recent conference call details, and investor relations contacts [About J.Jill, Inc.](index=4&type=section&id=About%20J.Jill%2C%20Inc.) J.Jill is a national lifestyle brand offering apparel, footwear, and accessories for women through a high-touch, omni-channel experience - J.Jill is a national lifestyle brand providing apparel, footwear, and accessories with an "easy, thoughtful and inspired style"[14](index=14&type=chunk) - The brand operates **over 200 stores** nationwide and a robust e-commerce platform[14](index=14&type=chunk) [Conference Call Information](index=4&type=section&id=Conference%20Call%20Information) A conference call was scheduled for June 11, 2025, to discuss Q1 FY25 results, with replay details provided - Conference call for Q1 FY25 results was scheduled for **June 11, 2025**, at 8:00 a.m. Eastern Time[12](index=12&type=chunk) - A taped replay of the conference call was available until **June 18, 2025**[13](index=13&type=chunk) [Investor Relations Contacts](index=13&type=section&id=Investor%20Relations%20Contacts) Contact information for investor relations and business media inquiries was provided - Investor Relations contact: Caitlin Churchill, ICR, Inc. (investors@jjill.com, 203-682-8200)[45](index=45&type=chunk) - Business and Financial Media contact: Ariel Kouvaras, Sloane & Company (akouvaras@sloanepr.com, 973-897-6241)[45](index=45&type=chunk) [Non-GAAP Financial Measures & Reconciliations](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section defines non-GAAP measures used by the company and provides reconciliations to their nearest GAAP equivalents [Definition of Non-GAAP Measures](index=4&type=section&id=Definition%20of%20Non-GAAP%20Measures) The company defines non-GAAP measures like Adjusted EBITDA and Free Cash Flow, noting they should not be considered substitutes for GAAP results - Non-GAAP measures are used to supplement GAAP financial statements for assessing operating performance and liquidity[15](index=15&type=chunk) - Non-GAAP measures should not be considered alternatives or substitutes for GAAP measures and may not be comparable to those of other companies[16](index=16&type=chunk) - **Adjusted EBITDA** represents net income plus (less) depreciation and amortization, income tax provision, interest expense, interest income, equity-based compensation, and other non-recurring items[15](index=15&type=chunk) - **Adjusted Income from Operations** represents operating income plus (less) equity-based compensation, write-off of property and equipment, adjustment for exited retail stores, impairment of long-lived assets, and other non-recurring items[15](index=15&type=chunk) - **Free Cash Flow** represents cash flow from operations less capital expenditures[15](index=15&type=chunk) [Reconciliation of GAAP Net Income to Adjusted EBITDA](index=9&type=section&id=Reconciliation%20of%20GAAP%20Net%20Income%20to%20Adjusted%20EBITDA) Adjusted EBITDA for Q1 FY25 was $27.3 million, a decrease from $35.6 million in the prior-year quarter | Metric | Q1 FY25 (Thousands) | Q1 FY24 (Thousands) | | :-------------------------------- | :------------------ | :------------------ | | Net income | $11,692 | $16,696 | | Add (Less) Adjustments | $15,643 | $18,951 | | **Adjusted EBITDA** | **$27,335** | **$35,647** | | Net sales | $153,624 | $161,513 | | **Adjusted EBITDA margin** | **17.8%** | **22.1%** | [Reconciliation of GAAP Operating Income to Adjusted Income from Operations](index=10&type=section&id=Reconciliation%20of%20GAAP%20Operating%20Income%20to%20Adjusted%20Income%20from%20Operations) Adjusted Income from Operations for Q1 FY25 was $21.5 million, down from $29.6 million in Q1 FY24 | Metric | Q1 FY25 (Thousands) | Q1 FY24 (Thousands) | | :-------------------------------- | :------------------ | :------------------ | | Operating income | $19,062 | $28,372 | | Add (Less) Adjustments | $2,467 | $1,227 | | **Adjusted income from operations** | **$21,529** | **$29,599** | [Reconciliation of GAAP Net Income to Adjusted Net Income](index=11&type=section&id=Reconciliation%20of%20GAAP%20Net%20Income%20to%20Adjusted%20Net%20Income) Adjusted Net Income for Q1 FY25 was $13.6 million, a decrease from $17.6 million in the prior-year period | Metric | Q1 FY25 (Thousands) | Q1 FY24 (Thousands) | | :-------------------------------- | :------------------ | :------------------ | | Net income | $11,692 | $16,696 | | Adjusted net income | $13,581 | $17,582 | | Adjusted net income per diluted share | $0.88 | $1.22 | [Reconciliation of GAAP Cash from Operations to Free Cash Flow](index=12&type=section&id=Reconciliation%20of%20GAAP%20Cash%20from%20Operations%20to%20Free%20Cash%20Flow) Free Cash Flow for Q1 FY25 was $2.6 million, a significant decrease from $19.2 million in Q1 FY24 | Metric | Q1 FY25 (Thousands) | Q1 FY24 (Thousands) | | :-------------------------------- | :------------------ | :------------------ | | Net cash provided by operating activities | $5,336 | $21,499 | | Less: Capital expenditures | $(2,724) | $(2,312) | | **Free cash flow** | **$2,612** | **$19,187** | [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) This section includes a standard disclaimer regarding the risks and uncertainties associated with forward-looking statements [Forward-Looking Statements Disclaimer](index=6&type=section&id=Forward-Looking%20Statements%20Disclaimer) Forward-looking statements are subject to numerous risks and uncertainties, and actual results may differ materially from expectations - Forward-looking statements are based on current expectations and assumptions and are subject to risks, uncertainties, and changes in circumstances[17](index=17&type=chunk) - Actual results may differ materially due to factors such as economic conditions, consumer spending, competition, supply chain disruptions, and technological changes[17](index=17&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statement[17](index=17&type=chunk) [Consolidated Financial Statements (Unaudited)](index=7&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the company's unaudited consolidated statements of operations, balance sheets, and selected cash flow data [Consolidated Statements of Operations and Comprehensive Income](index=7&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) The statements show a year-over-year decline in net sales, gross profit, operating income, and net income for the first quarter | Metric | For the Thirteen Weeks Ended May 3, 2025 (Thousands) | For the Thirteen Weeks Ended May 4, 2024 (Thousands) | | :-------------------------------- | :--------------------------------------------------- | :--------------------------------------------------- | | Net sales | $153,624 | $161,513 | | Gross profit | $110,357 | $117,737 | | Operating income | $19,062 | $28,372 | | Net income | $11,692 | $16,696 | | Diluted Net income per common share | $0.76 | $1.16 | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) Total assets and liabilities increased as of May 3, 2025, compared to the prior fiscal year-end, while cash and cash equivalents decreased | Metric | May 3, 2025 (Thousands) | February 1, 2025 (Thousands) | | :-------------------------------- | :---------------------- | :---------------------- | | Total assets | $432,896 | $417,699 | | Cash and cash equivalents | $31,245 | $35,427 | | Inventories, net | $60,557 | $61,295 | | Operating lease assets, net | $130,105 | $112,303 | | Total liabilities | $320,923 | $311,930 | | Operating lease liabilities, net of current portion | $117,294 | $104,751 | | Total shareholders' equity | $111,973 | $105,769 | [Selected Cash Flow Information](index=12&type=section&id=Selected%20Cash%20Flow%20Information) Net cash from operating activities decreased significantly in Q1 FY25, contributing to a net decrease in cash and cash equivalents | Metric | For the Thirteen Weeks Ended May 3, 2025 (Thousands) | For the Thirteen Weeks Ended May 4, 2024 (Thousands) | | :-------------------------------- | :--------------------------------------------------- | :--------------------------------------------------- | | Net cash provided by operating activities | $5,336 | $21,499 | | Net cash used in investing activities | $(2,724) | $(2,312) | | Net cash used in financing activities | $(6,794) | $(4,242) | | Net change in cash and cash equivalents | $(4,182) | $14,945 | | Cash and cash equivalents (End of Period) | $31,245 | $77,117 |

Core Insights - J.Jill, Inc. is expected to report a decline in quarterly earnings to 87 cents per share, down from $1.22 per share in the same period last year [1] - Projected quarterly revenue is $156.77 million, a decrease from $161.51 million a year earlier [1] Dividend Information - J.Jill currently offers an annual dividend yield of 1.87%, translating to a quarterly dividend of $0.08 per share [2] - To achieve a monthly income of $500 from dividends, an investor would need to own approximately 18,750 shares, equating to a total investment of about $321,563 [3] - For a more conservative monthly income goal of $100, an investor would need 3,750 shares, or an investment of around $64,313 [3] Dividend Yield Dynamics - The dividend yield is calculated by dividing the annual dividend payment by the current stock price, which can fluctuate [4] - Changes in stock price directly affect the dividend yield; for instance, if the stock price rises, the yield decreases, and vice versa [4] - The dividend payment itself can also change, impacting the yield; an increase in dividend payment raises the yield if the stock price remains constant [5] Stock Performance - J.Jill shares increased by 1.7%, closing at $17.15 on the previous Monday [5] - Telsey Advisory Group's analyst Dana Telsey has maintained a Market Perform rating on J.Jill with a price target of $21 [6]

Core Viewpoint - The market anticipates a year-over-year decline in J.Jill's earnings due to lower revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - J.Jill is expected to report quarterly earnings of $0.88 per share, reflecting a year-over-year decrease of 27.9%, and revenues are projected at $156.67 million, down 3% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 0.51% higher in the last 30 days, indicating a slight bullish sentiment among analysts [4]. Earnings Surprise Prediction - The Most Accurate Estimate for J.Jill is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +1.71%, although the stock has a Zacks Rank of 4, complicating predictions of an earnings beat [12]. Historical Performance - In the last reported quarter, J.Jill exceeded the expected earnings of $0.22 per share by delivering $0.32, resulting in a surprise of +45.45%. The company has beaten consensus EPS estimates in the last four quarters [13][14]. Conclusion - While J.Jill does not appear to be a strong candidate for an earnings beat, investors should consider other factors influencing stock performance ahead of the earnings release [17].

Core Insights - J.Jill (JILL) has consistently surpassed earnings estimates and is well-positioned for future earnings reports [1][2] Earnings Performance - In the last two quarters, J.Jill has exceeded earnings estimates by an average of 28.35% [2] - For the most recent quarter, J.Jill reported earnings of $0.32 per share, exceeding the expected $0.22 per share by 45.45% [3] - In the previous quarter, the company reported $0.89 per share against an estimate of $0.80 per share, resulting in a surprise of 11.25% [3] Earnings Estimates and Predictions - There has been a favorable change in earnings estimates for J.Jill, with a positive Zacks Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of an earnings beat [6][9] - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [7] - J.Jill currently has an Earnings ESP of +1.71%, suggesting analysts are optimistic about the company's earnings prospects [9] Importance of Earnings ESP - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [8] - A negative Earnings ESP can reduce predictive power but does not necessarily indicate an earnings miss [9] - It is crucial for investors to check a company's Earnings ESP before quarterly releases to improve the chances of successful investment decisions [10]

Part I [Business](index=7&type=section&id=Item%201.%20Business) J.Jill is a national lifestyle brand targeting affluent women aged 45 and older, operating a balanced omnichannel model with retail stores and direct-to-consumer channels - J.Jill is a national lifestyle brand targeting affluent women aged 45 and older with a median household income of approximately **$150,000**[22](index=22&type=chunk)[24](index=24&type=chunk) FY2024 Sales Channel Distribution | Channel | Percentage of Net Sales | | :--- | :--- | | Retail | ~52% | | Direct (Ecommerce/Catalog) | ~48% | - The company operates **252 stores** across **42 states** as of February 1, 2025, and returned to net store growth in Fiscal Year 2024[33](index=33&type=chunk)[37](index=37&type=chunk) - Growth strategy includes attracting new customers, increasing direct sales, and strategically adding a net of **50 new stores** over the next three to five years[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) - In Fiscal Year 2024, approximately **81% of products were sourced through agents** and **19% directly from suppliers**, with India, Indonesia, and Vietnam being the top three sourcing countries by volume[56](index=56&type=chunk)[57](index=57&type=chunk) - As of February 1, 2025, the company employed **1,123 full-time** and **2,126 part-time associates**[65](index=65&type=chunk) [Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from macroeconomic conditions, intense competition, supply chain dependencies, and financial leverage - Business is sensitive to macroeconomic conditions, consumer discretionary spending, and economic downturns, which can negatively impact sales and profitability[75](index=75&type=chunk) - The women's apparel industry is highly competitive, with pressure on pricing, brand recognition, and merchandise assortment from a variety of retailers[87](index=87&type=chunk) - The Direct channel, accounting for **48% of net sales**, is dependent on the effective operation of the e-commerce platform, making the business vulnerable to system failures, cyber-attacks, and changes in digital marketing effectiveness[88](index=88&type=chunk)[92](index=92&type=chunk) - Dependence on third-party, foreign sourcing (**81% through agents in FY2024**) creates risks related to production disruptions, shipping delays, quality control, and compliance with labor laws[111](index=111&type=chunk) - The company's Term Loan and ABL Credit Agreements contain restrictive covenants that limit operational and financial flexibility, including restrictions on incurring debt, making investments, and paying dividends[124](index=124&type=chunk) - As of February 2, 2025, the company is no longer a "smaller reporting company," which increases compliance costs and requires an audit of its internal controls over financial reporting[129](index=129&type=chunk) - Material damage to or interruptions in information systems, including security breaches of customer or employee data, could expose the company to data loss, fines, litigation, and reputational harm[147](index=147&type=chunk)[151](index=151&type=chunk) [Unresolved Staff Comments](index=46&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the SEC - None[175](index=175&type=chunk) [Cybersecurity](index=46&type=section&id=Item%201C.%20Cybersecurity) Cybersecurity risk management is overseen by the Audit Committee and CIO, with no material incidents reported as of the filing date - Cybersecurity governance is managed by a team led by the Chief Information Officer (CIO) with oversight from the Audit Committee of the Board[178](index=178&type=chunk) - The company utilizes third-party vendors for enhanced monitoring, penetration testing, and other security assessments[179](index=179&type=chunk) - As of the filing date, the company is not aware of any cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect its business, operations, or financial condition[181](index=181&type=chunk) [Properties](index=47&type=section&id=Item%202.%20Properties) J.Jill leases its corporate headquarters, distribution center, and **252 retail stores** across **42 states**, with most store leases expiring by 2029 - The company operates **252 retail stores** in **42 states**, all of which are leased. The average store size is approximately **3,700 square feet**[183](index=183&type=chunk) Lease Expiration Schedule for Retail Stores | Fiscal Years Lease Terms Expire | Number of Stores | | :--- | :--- | | 2024 – 2026 | 112 | | 2027 – 2029 | 115 | | 2030 – 2032 | 10 | | 2033 and later | 15 | - The principal executive offices are in Quincy, MA (lease expires Dec 2027), and the **520,000 sq. ft. distribution center** is in Tilton, NH (lease expires Sep 2030)[182](index=182&type=chunk) [Legal Proceedings](index=48&type=section&id=Item%203.%20Legal%20Proceedings) A class action regarding a stock repurchase program was dismissed after the board amended the program, with the company paying **$450,000** in fees - A class action complaint was filed in December 2024 alleging breach of fiduciary duties related to a stock repurchase program approved in December 2024[186](index=186&type=chunk) - To resolve the litigation, the board amended the repurchase program to prevent it from causing TowerBrook's ownership to exceed **49.9%** of outstanding voting stock[187](index=187&type=chunk) - The action was dismissed, and the company agreed to pay **$450,000** in attorneys' fees and expenses to the plaintiff[188](index=188&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=49&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) J.Jill's common stock trades on NYSE; the company paid **$2.9 million** in dividends and initiated a **$25.0 million** share repurchase program in FY2024 - The company's common stock trades on the New York Stock Exchange (NYSE) under the symbol "JILL"[192](index=192&type=chunk) - In Fiscal Year 2024, the Board declared a quarterly cash dividend of **$0.07 per share**, with total dividend payments amounting to **$2.9 million**[194](index=194&type=chunk) - A share repurchase program of up to **$25.0 million** was authorized on December 6, 2024. As of February 1, 2025, the company had repurchased **19,831 shares** and had **$24.5 million** remaining under the authorization[199](index=199&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=51&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) FY2024 net sales increased **0.5%** to **$610.9 million**, with net income rising **9.1%** to **$39.5 million**, supported by significant debt reduction and strong liquidity [Results of Operations](index=54&type=section&id=Results%20of%20Operations) FY2024 net sales increased **0.5%** to **$610.9 million**, driven by comparable sales growth, while gross margin declined to **70.4%** and net income rose **9.1%** to **$39.5 million** Consolidated Results of Operations (FY2024 vs. FY2023) | (in thousands) | FY 2024 | FY 2023 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $610,857 | $608,043 | 0.5% | | Gross profit | $429,856 | $430,782 | (0.2)% | | Operating income | $75,702 | $86,050 | (12.0)% | | Net income | $39,483 | $36,201 | 9.1% | - The increase in net sales was due to a total company comparable sales increase of **1.5%**, partially offset by the loss of the 53rd week included in Fiscal Year 2023[225](index=225&type=chunk) - Gross margin decreased from **70.8%** in FY2023 to **70.4%** in FY2024, driven by an increase in promotional activities and increased freight costs[227](index=227&type=chunk) - SG&A expenses increased by **$8.8 million** (**2.6%**), primarily due to higher professional fees, stock-based compensation, shipping, and marketing costs[228](index=228&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) As of February 1, 2025, J.Jill maintained strong liquidity with **$35.4 million** cash and **$35.7 million** ABL availability, having repaid **$94.2 million** of Term Loan principal in FY2024 Liquidity Position as of Feb 1, 2025 | Metric | Amount (in millions) | | :--- | :--- | | Cash and cash equivalents | $35.4 | | ABL Facility Availability | $35.7 | | Term Loan Principal Balance | $74.3 | - In Fiscal Year 2024, the company repaid **$94.2 million** in principal under the Term Loan Credit Agreement, including voluntary prepayments totaling **$85.4 million**[251](index=251&type=chunk) FY2024 Cash Flow Summary | (in thousands) | Amount | | :--- | :--- | | Net cash provided by operating activities | $65,036 | | Net cash used in investing activities | ($17,755) | | Net cash used in financing activities | ($74,026) | - In June 2024, the company completed an equity offering, selling **1,000,000 shares** and raising net proceeds of **$29.5 million**, which were used for debt repayment and general corporate purposes[239](index=239&type=chunk)[514](index=514&type=chunk)[515](index=515&type=chunk) [Critical Accounting Policies and Significant Estimates](index=60&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Estimates) Critical accounting policies involve significant estimates for revenue recognition, inventory valuation, and annual impairment assessments of long-lived assets, goodwill, and intangible assets - Critical accounting estimates include revenue recognition (sales returns, gift card breakage), inventory valuation, and impairment assessments for goodwill, intangible assets, and long-lived assets[271](index=271&type=chunk) - The company evaluates goodwill and its indefinite-lived trade name for impairment annually. A quantitative analysis is performed every three years, with a qualitative assessment in other years. The FY2024 qualitative test indicated no impairment[277](index=277&type=chunk)[285](index=285&type=chunk)[448](index=448&type=chunk) - In FY2024, the company recorded noncash impairment charges of **$0.8 million**, primarily related to leasehold improvements and a right-of-use asset for its corporate headquarters[168](index=168&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk) - In January 2025, the company transitioned to a self-insured group health insurance program and accrues for costs based on known claims and estimates of incurred but not reported (IBNR) claims[294](index=294&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk from **$74.3 million** in variable-rate Term Loan borrowings, with a **10%** rate change impacting FY2024 net income by **$5.8 million** - The company is subject to interest rate risk from variable-rate borrowings under its Credit Facilities, with **$74.3 million** outstanding under the Term Loan Facility as of February 1, 2025[296](index=296&type=chunk) - A **10%** change in the current interest rate would have affected net income by **$5.8 million** during Fiscal Year 2024[296](index=296&type=chunk) [Controls and Procedures](index=65&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of February 1, 2025, with an unqualified audit opinion - Management concluded that as of February 1, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[300](index=300&type=chunk) - Management assessed internal control over financial reporting using the COSO framework and concluded it was effective as of February 1, 2025[303](index=303&type=chunk) - The independent registered public accounting firm, Grant Thornton LLP, issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting[304](index=304&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Compensation, Security Ownership, and Principal Accountant Fees](index=67&type=section&id=Items%2010%2C%2011%2C%2012%2C%2013%2C%20and%2014) Information for Items 10-14, covering governance, compensation, and ownership, is incorporated by reference from the company's 2024 proxy statement - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the company's definitive proxy statement for its 2024 Annual Meeting of Stockholders, to be filed within 120 days of the fiscal year-end[310](index=310&type=chunk)[312](index=312&type=chunk)[313](index=313&type=chunk)[314](index=314&type=chunk)[315](index=315&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=68&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists financial statements and an index of exhibits, including key corporate documents, filed or incorporated by reference - This section contains the index to the consolidated financial statements and a list of exhibits filed with or incorporated by reference into the Form 10-K[317](index=317&type=chunk)[319](index=319&type=chunk) Consolidated Financial Statements [Consolidated Balance Sheets](index=76&type=section&id=Consolidated%20Balance%20Sheets) As of February 1, 2025, total assets were **$417.7 million**, liabilities decreased to **$311.9 million** due to debt reduction, and shareholders' equity increased to **$105.8 million** Consolidated Balance Sheet Highlights (in thousands) | | Feb 1, 2025 | Feb 3, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$417,699** | **$428,180** | | Cash and cash equivalents | $35,427 | $62,172 | | Inventories, net | $61,295 | $53,259 | | **Total Liabilities** | **$311,930** | **$390,962** | | Long-term debt, net | $69,419 | $120,595 | | **Total Shareholders' Equity** | **$105,769** | **$37,218** | [Consolidated Statements of Operations and Comprehensive Income](index=77&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) FY2024 net sales were **$610.9 million**, with a gross margin of **70.4%** and net income of **$39.5 million**, or **$2.61 per diluted share** Consolidated Statement of Operations (in thousands, except per share data) | | FY 2024 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | | Net sales | $610,857 | $608,043 | $618,528 | | Gross profit | $429,856 | $430,782 | $425,310 | | Operating income | $75,702 | $86,050 | $78,734 | | Net income | $39,483 | $36,201 | $42,175 | | Diluted EPS | $2.61 | $2.51 | $2.95 | [Consolidated Statements of Cash Flows](index=79&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) FY2024 operating cash flow was **$65.0 million**, with **$74.0 million** used in financing activities, resulting in a **$26.8 million** net decrease in cash Consolidated Statement of Cash Flows (in thousands) | | FY 2024 | FY 2023 | | :--- | :--- | | Net cash provided by operating activities | $65,036 | $63,313 | | Net cash used in investing activities | ($17,755) | ($16,934) | | Net cash used in financing activities | ($74,026) | ($71,260) | | Net change in cash and cash equivalents | ($26,750) | ($24,881) | | Cash and cash equivalents, end of period | $35,790 | $62,540 | [Notes to Consolidated Financial Statements](index=80&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail significant accounting policies, revenue disaggregation, debt facilities, fair value, leases, income taxes, and shareholders' equity transactions [Note 9. Debt](index=99&type=section&id=Note%209.%20Debt) As of February 1, 2025, the Term Loan balance was **$74.3 million** after **$94.2 million** in FY2024 repayments, with **$35.7 million** available under the ABL facility - On April 5, 2023, the company entered into a new Term Loan Credit Agreement for **$175.0 million**, maturing May 8, 2028[462](index=462&type=chunk) - In FY2024, the company made voluntary principal prepayments of **$85.4 million** on the Term Loan, resulting in a total principal repayment of **$94.2 million** for the year[251](index=251&type=chunk)[468](index=468&type=chunk) - As of Feb 1, 2025, the remaining principal balance on the Term Loan was **$74.3 million**. The company had no borrowings under its ABL Facility and **$35.7 million** of availability[468](index=468&type=chunk)[479](index=479&type=chunk) [Note 15. Shareholders' Equity](index=111&type=section&id=Note%2015.%20Shareholders%27%20Equity) In FY2024, the company raised **$29.5 million** from an equity offering, initiated a **$25.0 million** share repurchase program, and paid **$2.9 million** in dividends - On June 14, 2024, the company completed an equity offering, selling **1,000,000 shares** for net proceeds of **$29.5 million** after underwriting discounts and commissions[513](index=513&type=chunk)[514](index=514&type=chunk) - A **$25.0 million** share repurchase program was approved on December 6, 2024. During FY2024, the company repurchased **19,831 shares** for **$0.5 million**[516](index=516&type=chunk)[517](index=517&type=chunk) - During FY2024, the company paid cash dividends of **$0.21 per share**, totaling **$2.9 million**[519](index=519&type=chunk) [Note 17. Share-Based Payment](index=113&type=section&id=Note%2017.%20Share-Based%20Payment) FY2024 share-based compensation expense was **$6.9 million**, with **$6.9 million** unrecognized for RSUs and **$4.3 million** for PSUs as of February 1, 2025 - Total share-based compensation expense was **$6.9 million**, **$3.8 million**, and **$3.5 million** for Fiscal Years 2024, 2023, and 2022, respectively[526](index=526&type=chunk) - As of February 1, 2025, there was **$6.9 million** of total unrecognized compensation expense related to unvested RSUs and **$4.3 million** related to unvested PSUs[533](index=533&type=chunk)[537](index=537&type=chunk) - On December 9, 2024, the Board awarded **100,000 liability-classified performance-based stock options** to a consultant, Elm St Advisors, LLC[417](index=417&type=chunk)[527](index=527&type=chunk)

Core Viewpoint - J.Jill, Inc. reported muted fiscal Q4 results and anticipates continued weakness in Q1, yet the company maintains solid performance metrics [1]. Financial Performance - The company's fiscal Q4 results were released on March 19, indicating a relatively weak financial performance [1]. - Expectations for Q1 remain low, suggesting ongoing challenges in the retail environment [1]. Investment Perspective - The investment philosophy focuses on identifying mispriced securities through understanding financial drivers, often revealed by DCF model valuation [1].

Financial Data and Key Metrics Changes - For the full year 2024, total sales were approximately $611 million, with comparable sales growth of 1.5% [24] - Gross margin was reported at 70.4%, while adjusted EBITDA was $107 million [25] - Adjusted net income per diluted share increased to $3.47, reflecting a 4% rise compared to the previous year [38] Business Line Data and Key Metrics Changes - In Q4 2024, total company sales were $143 million, down approximately 5% compared to Q4 2023 [31] - Store sales for Q4 decreased by 3%, primarily due to calendar impacts, while direct sales as a percentage of total sales were 50.5% [33] - The company saw strength in categories such as bottoms, outerwear, knit tops, and sleepwear during the quarter [12][110] Market Data and Key Metrics Changes - The company experienced challenges in traffic, which was reflected in the overall sales performance [76] - The direct-to-consumer channel showed a shift towards markdowns, contrasting with the full-price orientation of store sales [101] Company Strategy and Development Direction - The company plans to continue expanding its store count, with expectations to grow by 5 to 10 stores by the end of fiscal 2025 [51] - Investments in new stores and technology systems are prioritized to enhance the omni-channel experience [19][45] - The implementation of a new order management system (OMS) is expected to unlock new capabilities and improve operational efficiency [20][45] Management's Comments on Operating Environment and Future Outlook - The management noted that fiscal 2025 has started slowly, with consumer sentiment and adverse weather impacting performance [21] - The company is taking a prudent approach to its outlook for Q1 and the remainder of the year, considering the current economic uncertainties [21][49] - Management expressed confidence in the brand's growth potential and the effectiveness of its operating model despite challenges [22][53] Other Important Information - The company ended the year with a healthy cash position, supporting a recently announced dividend increase [15] - Total reported inventories were up about 15% compared to the end of Q4 last year, primarily due to strategic shipping decisions [41] Q&A Session Summary Question: Can you elaborate on the Q1 headwinds? - Management identified three main headwinds: adverse weather, consumer sentiment concerns, and the OMS implementation [59][60] Question: What benefits do you expect from the OMS? - The OMS is expected to provide operational efficiencies and enhance omni-channel capabilities, starting with ship-from-store functionalities [64][66] Question: How do you view gross margin trends for the year? - Management indicated that Q1 will be the most challenging comparison, with expectations for flat gross margins overall [73] Question: What are the promotional strategies moving forward? - The company aims to maintain a disciplined promotional approach while responding to consumer price sensitivity [92][95] Question: How did store and digital channels perform differently? - Store sales remained more full-price oriented, while digital channels shifted more towards markdowns [101]

Financial Data and Key Metrics Changes - For the full year 2024, total sales were approximately $611 million, with comparable sales growth of 1.5% and gross margin of 70.4% [18][26] - Adjusted EBITDA for the year was $107 million, while adjusted net income per diluted share was $3.47, reflecting a 4% increase [26][27] - Free cash flow for the year was $47 million, with cash from operations generating $65 million [27][28] Business Line Data and Key Metrics Changes - In Q4, total company sales were $143 million, down approximately 5% compared to the previous year [21] - Direct sales accounted for 50.5% of total sales in Q4, down 6.8% year-over-year due to a shift into markdown selling [24] - The strongest categories in Q4 included bottoms, outerwear, knit tops, and sleepwear, supported by marketing campaigns [9][80] Market Data and Key Metrics Changes - The retail channel saw a 1.9% increase in comparable sales for Q4, driven by strong conversion and average unit retail (AUR) [22] - Store sales for Q4 were down 3% due to calendar impacts, but new stores contributed approximately $1.1 million in revenue [22][23] - The company ended the year with a total of 252 stores, reflecting a net increase of eight stores [30] Company Strategy and Development Direction - The company plans to continue investing in new store growth, with expectations to open 20 to 25 net new stores by the end of 2026 [34] - The implementation of a new order management system (OMS) is expected to enhance omni-channel capabilities and improve customer experience [31][32] - Marketing strategies are being diversified, including geo-targeted efforts to drive customer engagement and store traffic [12][56] Management's Comments on Operating Environment and Future Outlook - The management noted that fiscal 2025 has started slowly, with consumer sentiment and adverse weather impacting performance [14][15] - The company is taking a prudent approach to its outlook for Q1 and the remainder of the year, considering macroeconomic uncertainties [15][19] - Management expressed confidence in the brand's potential for growth, emphasizing the importance of disciplined operating principles [16][36] Other Important Information - The company initiated a quarterly dividend and share buyback program, marking the first such actions since its IPO in 2017 [10][18] - Total reported inventories were up about 15% compared to the previous year, but normalized inventories were only up about 3% [29][84] - The company expects to spend approximately $25 million in capital expenditures for fiscal 2025, focusing on new stores and OMS rollout [35] Q&A Session Summary Question: Can you elaborate on the Q1 headwinds? - Management identified three main headwinds: adverse weather, consumer sentiment concerns, and the OMS implementation [40][41] Question: What benefits do you expect from the OMS? - The OMS is expected to provide operational efficiencies and enhance omni-channel capabilities, starting to yield benefits in the back half of the year [43][45] Question: How do you view gross margin trends for the year? - Management indicated that Q1 will be the most challenging comparison, with expectations for flat gross margins overall [50][52] Question: What are the traffic trends and how are you driving digital customers to stores? - Traffic has been challenged, but the company is testing geo-targeted marketing to drive store traffic [54][56] Question: How are promotions being managed in the current environment? - The company aims to maintain a disciplined promotional approach while responding to consumer price sensitivity [66][70] Question: What differences are observed between stores and digital channels? - Stores are more full-price oriented, while digital channels have shifted more towards markdowns [74]

Core Viewpoint - J.Jill reported quarterly earnings of $0.32 per share, exceeding the Zacks Consensus Estimate of $0.22 per share, and showing an increase from $0.23 per share a year ago, indicating a 45.45% earnings surprise [1] Financial Performance - The company achieved revenues of $142.84 million for the quarter ended January 2025, surpassing the Zacks Consensus Estimate by 0.88%, although this represents a decline from $149.45 million in the same quarter last year [2] - Over the last four quarters, J.Jill has exceeded consensus EPS estimates four times and topped revenue estimates three times [2] Stock Performance - J.Jill shares have declined approximately 32.6% since the beginning of the year, contrasting with the S&P 500's decline of 4.5% [3] - The current Zacks Rank for J.Jill is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $1.32 on revenues of $166.05 million, and for the current fiscal year, it is $3.62 on revenues of $630.7 million [7] - The trend of estimate revisions for J.Jill is mixed, which could change following the recent earnings report [6] Industry Context - The Retail - Apparel and Shoes industry, to which J.Jill belongs, is currently ranked in the bottom 40% of over 250 Zacks industries, suggesting potential challenges ahead [8]