J.Jill (JILL) investor relations material

Executive summary

• Q2 net sales were $154.0 million, down 0.8% year-over-year, with sequential monthly sales improvement and increased customer traffic; comparable sales declined 1.0% due to lower full-price mix and increased promotions.

• Adjusted EBITDA for Q2 was $25.6 million (16.6% margin), down from $30.2 million (19.4% margin) a year ago.

• Net income for Q2 was $10.5 million, up from $8.2 million in the prior year, driven by lower interest expense and absence of debt extinguishment costs.

• Gross margin declined to 68.4% from 70.5% year-over-year, primarily due to higher markdowns, promotional activity, and increased tariffs.

• Strategic focus on expanding the customer base, evolving product assortment, enhancing the customer journey, and improving operational efficiency through technology and process improvements.

Financial highlights

• For the first 26 weeks of FY25, net sales were $307.6 million, down 2.9% year-over-year; net income was $22.2 million, down 10.8%.

• Q2 comparable sales decreased 1.0% year-over-year; direct-to-consumer sales (46.4% of total) declined 2.2%.

• SG&A expenses for Q2 rose to $88.6 million, reflecting higher shipping, CEO transition, occupancy, and IT costs.

• Free cash flow for Q2 was $16.6 million; cash balance at quarter-end was $45.5 million.

• Operating income for Q2 was $16.8 million (10.9% margin), down from $23.0 million (14.8% margin) in the prior year.

Outlook and guidance

• Q3 adjusted EBITDA expected between $18 million and $22 million, including $5 million in incremental tariff costs; sales projected flat to down low single digits, comps down low to mid-single digits.

• Gross margins expected to decline further in Q3 due to tariff pressures.

• Capital expenditures for FY25 projected at $20–$25 million; plan to open 1–5 net new stores.

• The company intends to continue quarterly cash dividends, subject to market conditions and Board discretion.