J.Jill(US:JILL)2025-06-11 13:00Financial 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but acknowledged near-term uncertainties related to tariffs and macroeconomic conditions [13][20] - The company has withdrawn its prior full-year guidance to allow the new CEO time to assess the business and develop future strategies [19][56] Other Important Information - The company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]