J.Jill(JILL) - 2026 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements This section presents unaudited condensed consolidated financial statements for Q1 2025, showing declines in net sales, net income, and operating cash flow compared to the prior year Condensed Consolidated Balance Sheets As of May 3, 2025, total assets increased to $432.9 million, liabilities to $320.9 million, and shareholders' equity to $112.0 million Condensed Consolidated Balance Sheets (in thousands) | | May 3, 2025 | February 1, 2025 | | :--- | :--- | :--- | | Total current assets | $122,310 | $122,030 | | Total assets | $432,896 | $417,699 | | Total current liabilities | $124,053 | $127,108 | | Total liabilities | $320,923 | $311,930 | | Total shareholders' equity | $111,973 | $105,769 | Condensed Consolidated Statements of Operations and Comprehensive Income For Q1 2025, net sales decreased 4.9% to $153.6 million, and net income fell 30.0% to $11.7 million, with diluted EPS at $0.76 Statement of Operations Highlights (in thousands, except per share data) | Metric | For the Thirteen Weeks Ended May 3, 2025 | For the Thirteen Weeks Ended May 4, 2024 | | :--- | :--- | :--- | | 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 EPS | $0.76 | $1.16 | | Cash dividends declared per common share | $0.08 | $— | Condensed Consolidated Statements of Cash Flows Net cash from operating activities significantly decreased to $5.3 million, while cash used in investing and financing activities increased for Q1 2025 Cash Flow Summary (in thousands) | Activity | For the Thirteen Weeks Ended May 3, 2025 | For the Thirteen Weeks Ended May 4, 2024 | | :--- | :--- | :--- | | 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 | Notes to Condensed Consolidated Financial Statements These notes detail accounting policies, revenue disaggregation by channel, debt, share repurchase, dividend programs, and share-based compensation - Effective March 2025, the company revised its Direct sales returns reserve methodology and reduced the return window, with no material impact[37] Disaggregation of Revenue (in thousands) | Channel | For the Thirteen Weeks Ended May 3, 2025 | For the Thirteen Weeks Ended May 4, 2024 | | :--- | :--- | :--- | | Retail | $81,813 | $85,607 | | Direct | $71,811 | $75,906 | | Net sales | $153,624 | $161,513 | - The company repurchased 186,800 shares for $3.5 million under its share repurchase program, with $21.0 million remaining available as of May 3, 2025[74][75] - A quarterly cash dividend of $0.08 per share, totaling $1.2 million, was paid, with a subsequent dividend declared on June 3, 2025[77][79] Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes Q1 2025 net sales and gross margin declines to lower full-price sales and increased promotions, resulting in a 30.0% drop in net income Results of Operations Q1 2025 net sales decreased 4.9% to $153.6 million, gross profit fell 6.3% to $110.4 million, and operating income declined 32.8% to $19.1 million Q1 2025 vs Q1 2024 Performance (in thousands) | Metric | Q1 2025 (Thirteen Weeks Ended May 3, 2025) | Q1 2024 (Thirteen Weeks Ended May 4, 2024) | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net sales | $153,624 | $161,513 | $(7,889) | (4.9)% | | Gross profit | $110,357 | $117,737 | $(7,380) | (6.3)% | | SG&A expenses | $91,088 | $89,112 | $1,976 | 2.2% | | Operating income | $19,062 | $28,372 | $(9,310) | (32.8)% | | Net income | $11,692 | $16,696 | $(5,004) | (30.0)% | - Net sales decreased primarily due to a 5.7% decline in comparable sales, driven by lower full-price mix and increased promotions[132] - Gross margin decreased from 72.9% to 71.8% due to lower full-price mix and increased promotional activities[134] Liquidity and Capital Resources As of May 3, 2025, the company had $31.2 million in cash and $35.7 million ABL availability, with operating cash flow decreasing to $5.3 million - As of May 3, 2025, the company held $31.2 million in cash and $35.7 million available under its ABL Facility[141] - In Fiscal Year 2024, the company made voluntary principal prepayments totaling $85.4 million on its Term Loan Credit Agreement[145] - Net cash from operating activities decreased by $16.1 million to $5.3 million, driven by a $5.0 million drop in net income and a $9.5 million negative change in working capital[149] - Net cash used in financing activities totaled $6.8 million, primarily for share repurchases ($3.5 million), taxes ($2.0 million), and dividends ($1.2 million)[153][17] Quantitative and Qualitative Disclosures About Market Risk No material changes in market risk exposure occurred during Q1 2025 compared to the Fiscal Year 2024 Annual Report disclosures - There have been no material changes in the company's market risk exposure during the first quarter of Fiscal Year 2025[167] Controls and Procedures As of May 3, 2025, disclosure controls and procedures were deemed effective, with no material changes to internal control over financial reporting - Management concluded that the company's disclosure controls and procedures are effective as of May 3, 2025[169] - No changes to internal control over financial reporting materially affected controls during Q1 Fiscal Year 2025[170] PART II. OTHER INFORMATION Legal Proceedings A class action concerning a stock repurchase program was dismissed as moot after the board amended the program, with the company paying $450,000 in fees - A class action complaint was filed on December 19, 2024, alleging breach of fiduciary duties related to a stock repurchase program[172] - To resolve litigation, the board amended the repurchase program to prevent TowerBrook Funds from owning more than 49.9% of voting stock[173] - The action was dismissed as moot, and the company agreed to pay $450,000 in attorneys' fees and expenses[175] Risk Factors As of the filing date, there have been no material changes to the risk factors previously disclosed in the Fiscal Year 2024 Annual Report - As of this Quarterly Report, there have been no material changes to previously disclosed risk factors in the 2024 Annual Report[178] Unregistered Sales of Equity Securities and Use of Proceeds Under its $25.0 million program, the company repurchased 186,800 shares for $3.5 million, with $21.0 million remaining available Share Repurchase Activity (Thirteen weeks ended May 3, 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Value Remaining ($) | | :--- | :--- | :--- | :--- | | Feb 2 - Mar 1, 2025 | — | $— | $24,477,079 | | Mar 2 - Apr 5, 2025 | 186,800 | $18.84 | $20,957,463 | | Apr 6 - May 3, 2025 | — | $— | $20,957,463 | | Total | 186,800 | | $20,957,463 | Other Information This section discloses that CEO Claire Spofford and CFO Mark Webb entered into Rule 10b5-1 trading plans for potential share sales - CEO Claire Spofford entered a Rule 10b5-1 trading plan for the potential sale of up to 67,500 shares of common stock[182] - CFO Mark Webb entered a Rule 10b5-1 trading plan for the potential sale of up to 30,000 shares of common stock[184]