J.Jill(JILL) Seeking Alpha·2024-09-12 12:38Core Viewpoint - J.Jill's stock fell nearly 40% following a reduction in guidance despite a slight growth in comparable sales, indicating concerns about future traffic trends and overall revenue performance [2][3]. Group 1: 2Q24 Results and Guidance - J.Jill reported a 0.9% year-over-year decline in revenues, but a 1.7% growth on a comparable basis, which is relatively positive in the current apparel market context [3]. - The company experienced a deceleration in growth from 3% in Q1 to 1.7% in Q2, with management warning of worsening traffic trends in July and August [3]. - Guidance for Q3 comparables has been reduced to a decline of 0.5%, with adjusted EBITDA expectations now down between 3% and 9% [3]. - Gross margins are expected to be challenged in the second half of 2024 due to declining sales and increased inventory levels, which rose 15% year-over-year [3]. - SG&A expenses increased by 3.4 million for the year [3]. Group 2: Capital Structure and Financial Health - The company issued 1 million shares at 94 million to 0.07 quarterly dividend while holding debt has raised questions about capital allocation strategies [3][4]. Group 3: Valuation and Market Position - J.Jill's market capitalization is approximately 410 million, reflecting a decrease due to debt repayments [4]. - Expected adjusted EBITDA for the year is projected to be between 108 million, leading to a net income range of 52 million [4][5]. - The current EV/NOPAT is about 7.2x and P/E is approximately 7.3x, indicating a current earnings yield of 14%, which is considered reasonable but reflects the company's reliance on revenue growth [4][5].