Women's Apparel Stock J. Jill Gains Despite A Q2 Sales Decline Across 245 Stores

J. Jill, Inc. JILL reported a second-quarter 2023 sales decline of 2.9% year-over-year to $155.7 million, missing the consensus of $152.4 million.

Total company comparable sales decreased by 1.3%. Direct-to-consumer net sales were down 5.1%.

Adjusted EPS was $1.10, compared to $1.24 a year ago, beating the consensus of 80 cents.

Gross profit contracted to $111.4 million compared to $112.5 million in 2Q23, margin expanded to 71.6% from 70.1%, benefiting from lower freight costs.

Operating income was $28.04 million (-0.5% Y/Y), and margin expanded by 43 bps to 18%.

JILL held $48.9 million in cash and $34.2 million of total availability under its revolving credit agreement at the end of the quarter. Inventory decreased 16% Y/Y to $45.7 million.

Adjusted EBITDA for the quarter was $34.55 million (-2.9% Y/Y), and Adjusted EBITDA margin was flat at 22.2%.

J. Jill did not open any new stores in Q2 and ended the quarter with 245 stores.

3Q23 Outlook: J. Jill Expects Q3 revenues to be down in the low single digits year over year, with an adjusted EBITDA Of $23 million-$25 million.

FY23 Outlook: For fiscal 2023, the company now expects Annual Adjusted EBITDA dollars to be down in the low-single digits YoY, compared to prior Adjusted EBITDA dollars to be down mid-single digits. 

The company continues to expect total capital expenditures of about $18 million and a flat store count.

Price Action: JILL shares are trading higher by 4.74% to $24.52 on the last check Thursday.