J.Jill(US:JILL)2022-03-22 15:17Financial Data and Key Metrics Changes - Fiscal 2021 saw total sales grow to $585 million, a 37% increase compared to 2020, with gross margin improving by 980 basis points versus 2020 and 540 basis points compared to 2019 [5][17] - Adjusted EBITDA for fiscal 2021 reached $92 million, reflecting a significant year-over-year increase and a 620 basis point expansion compared to pre-COVID 2019 levels [6][17] - Q4 total company sales were $145 million, up 15% from Q4 2020, but down 14% compared to Q4 2019 [21][22] Business Line Data and Key Metrics Changes - Store sales in Q4 increased over 62% compared to Q4 2020, but were down 21% compared to 2019 levels [22] - Direct sales accounted for 52% of total sales in Q4, down 9% from the previous year due to lower markdown sales, partially offset by higher full-price sales [23] Market Data and Key Metrics Changes - Store traffic was negatively impacted by the Omicron variant during the holiday season but showed recovery later in January as cases declined [9] - The company ended the year with inventory levels down 3.5% compared to the end of 2020, indicating a healthier balance of full-price versus markdown units [26] Company Strategy and Development Direction - The company aims to modernize the J.Jill brand and value proposition, attract new customers through strategic marketing, and drive growth in high-potential sub-brands like Pure Jill and J.Jill Fit [13] - Future growth will focus on disciplined inventory and expense management, with plans for new store openings in high-potential locations [12][32] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver continued traction and results despite macro-related headwinds, emphasizing a disciplined approach to managing the business [15] - The company expects sales growth of 11% to 14% in Q1 2022 compared to Q1 2021, with adjusted EBITDA projected between $20 million and $22 million [28] Other Important Information - Capital expenditures for the year are expected to increase to between $15 million and $18 million, focusing on technology investments and new store openings [33][61] - The company plans to close approximately 10 stores in fiscal 2022 while selectively reviewing opportunities for new store openings [32] Q&A Session Summary Question: Inventory levels and their impact on sales - Management acknowledged that lower inventory levels constrained sales in Q4 but emphasized the importance of reducing markdowns as part of their operating model strategy [40][41] Question: Freight expenses and product strength - Management indicated that freight expenses are expected to remain elevated in the first half of the year, while product categories like dresses and travel outfits are seeing strong demand [51][56] Question: Employee turnover and labor market challenges - Management reported a relatively low turnover rate and successful talent acquisition despite a tight labor market [72][73] Question: Consumer health amid inflation - Management noted that their consumer base remains strong and less susceptible to inflationary pressures, with no significant impact on business observed so far [76][77] Question: Plans for excess cash and debt management - Management expressed interest in improving the capital structure and reducing debt, while also considering options for utilizing excess cash [78][79]