J.Jill(US:JILL)2025-09-03 13:00Financial Data and Key Metrics Changes - Total company sales for Q2 2025 were approximately $154 million, down 0.8% compared to Q2 2024, with comparable sales down 1% [10][11] - Adjusted EBITDA for the quarter was $25.6 million, compared to $30.2 million in Q2 2024 [12] - Gross profit for Q2 was about $105 million, down approximately $4 million from Q2 2024, with a gross margin of 68.4%, down 210 basis points year-over-year [11][12] - Adjusted net income per diluted share was $0.81, compared to $1.05 last year [12] Business Line Data and Key Metrics Changes - Store sales increased by 0.4% compared to Q2 2024, driven by three net new stores [11] - Direct sales, representing about 46% of total sales, decreased by approximately 2% compared to Q2 2024 [11] Market Data and Key Metrics Changes - The company experienced improved sales trends month-over-month in Q2, particularly in June and July, attributed to clearance activities and promotional efforts [10][23] - The company ended the quarter with clean inventories, having successfully cleared excess inventory units [15] Company Strategy and Development Direction - The company aims to expand its customer base by evolving product assortments, enhancing the customer journey, and improving operational efficiency [4][5] - Plans to open 50 new stores by the end of 2029, with two new stores expected to open in Q3 2025 [7][18] - The company is focusing on leveraging technology, including AI, to enhance operational capabilities and customer experience [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the consumer's gradual return and the company's ability to navigate inflation and tariffs [9][42] - The company anticipates adjusted EBITDA for Q3 2025 to be in the range of $18 to $22 million, with sales expected to be flat to down low single digits [17] - Tariff impacts are projected to be approximately $5 million in Q3, with ongoing efforts to mitigate these costs through vendor negotiations and strategic pricing [17][18] Other Important Information - The company generated $17 million in free cash flow during the quarter, ending with $46 million in cash [10][14] - Capital expenditures for the quarter were about $3 million, focused on store improvements and the launch of ship-from-store capabilities [15] Q&A Session Summary Question: What drove the improvement in June and July? - The improvement was driven by clearance activities and a good customer response to promotions, particularly in July [23] Question: Expectations for promotional levels in the second half? - Promotional levels will depend on consumer acceptance of price increases, with a range of outcomes anticipated [26][43] Question: Opportunities for change and innovation after 100 days in the business? - Management noted cultural shifts and a focus on growing the customer file through product, customer journey, and operational improvements [33] Question: Thoughts on the state of the consumer? - The consumer is slowly returning, with optimism for Q3 as tariff concerns settle [42] Question: Changes in merchandising and customer engagement strategies? - The company is implementing a non-tender rewards program and adjusting marketing strategies to enhance customer engagement [48][51]