J.Jill (JILL) Q1 2025 earnings summary

Executive summary

• Net sales grew 7.5% year-over-year to $161.5 million in Q1 2024, with comparable sales up 3.1% and direct-to-consumer sales up 11.6%.

• Adjusted EBITDA reached $35.6 million, with margin expanding to 22.1%, and operating income increased to $28.4 million.

• Net income surged 263% to $16.7 million, with diluted EPS of $1.16, up from $0.32 in the prior year.

• Strategic investments are being made in marketing, omni-channel infrastructure, and new store openings, with plans to open up to 50 stores in five years.

• Paid down $60 million in debt and initiated a quarterly dividend program, reflecting strong cash generation and confidence in future performance.

Financial highlights

• Gross profit was $117.7 million, with gross margin at 72.9%, up 80 basis points year-over-year, driven by higher full price sales.

• SG&A expenses were $89.1 million, mainly due to increased marketing, higher sales, and wage inflation.

• Interest expense was $6.4 million, with interest income of $1.0 million.

• Operating cash flow was $21.5 million, with a quarter-end cash balance of $77.1 million and inventory at $53.1 million.

• Free cash flow was $19.2 million, up from $4.9 million year-over-year.

Outlook and guidance

• Q2 2024 net sales expected to be flat to down 3% year-over-year, with a $7 million negative impact from a calendar shift; adjusted EBITDA guidance is $27–$30 million.

• Full-year 2024 outlook raised: net sales growth of 1%-3%, gross margin about flat, and adjusted EBITDA down 1%-3% versus 2023 (53-week year).

• Excluding the 53rd week and OMS investment, fiscal 2024 revenue expected to rise 2%-4% and adjusted EBITDA up 1%-3% year-over-year.

• Net store count to grow by up to 5 in 2024, with capital expenditures expected at $26 million.

• The company declared its first quarterly cash dividend of $0.07 per share, payable June 12, 2024, and intends to pay dividends quarterly.