J.Jill Inc (JILL) Reports Marginal Decline in Net Sales with Improved Profitability in Q3 2023
Net Sales slightly down by 0.1% year-over-year in Q3 2023, totaling $150.1 million.
Gross Margin improved to 71.8%, a 190 basis points increase from Q3 FY2022.
Operating Income Margin rose by 220 basis points to 14.7% compared to the same period last year.
Net Income per Diluted Share increased to $0.80 from $0.62 in Q3 FY2022.
On December 5, 2023, J.Jill Inc (NYSE:JILL) released its 8-K filing, announcing the financial results for the third quarter ended October 28, 2023. Despite a challenging consumer environment, the company reported a slight decrease in net sales to $150.1 million, down 0.1% from $150.2 million in the same quarter of the previous year. However, J.Jill Inc saw an increase in total company comparable sales by 1.9% and a notable improvement in profitability metrics.
Financial Performance Overview
The company's gross profit for the quarter was $107.8 million, up from $105.0 million in Q3 FY2022, with gross margin increasing to 71.8%. This margin expansion reflects the company's ability to manage costs effectively, particularly in a period of lower freight costs. Operating income also saw a rise to $22.1 million, compared to $18.9 million in the prior year's quarter, with operating income margin increasing to 14.7%.
Net income for the quarter improved to $11.6 million, a jump from $8.9 million in Q3 FY2022. This resulted in a net income per diluted share of $0.80, up from $0.62, including the impact of non-recurring items. Adjusted EBITDA for the quarter was $28.3 million, slightly up from $27.5 million in the third quarter of fiscal 2022, with the adjusted EBITDA margin increasing to 18.8%.
Balance Sheet and Cash Flow Highlights
J.Jill Inc ended the quarter with $64.1 million in cash and $34.2 million of total availability under its revolving credit agreement. Inventory levels were managed down by 5.7% to $56.7 million, compared to $60.1 million at the end of the third quarter of fiscal 2022. This inventory management reflects the company's disciplined approach to capital allocation and operational efficiency.
Management Commentary
Claire Spofford, President and Chief Executive Officer of J.Jill Inc, commented on the results, stating,
Our performance continues to reflect the disciplined execution of our business by the team especially amidst a very dynamic consumer environment. Our results are supported by solid full price selling across our channels and underscores our ability to continue to deliver product and assortments that are versatile, modern and that appeal to our loyal customer."
She also expressed confidence in the company's positioning to achieve its objectives for the remainder of the year.
Outlook and Forward Guidance
Looking ahead, J.Jill Inc expects revenues for the fourth quarter of fiscal 2023 to be approximately flat compared to the fourth quarter of fiscal 2022. Adjusted EBITDA is anticipated to be in the range of $11.0 million to $13.0 million. For the full fiscal year 2023, the company continues to project Adjusted EBITDA dollars to be down in the low-single digits compared to fiscal 2022, factoring in a $2.0 million benefit from the 53rd week in fiscal 2023.
Investors and analysts are invited to review the detailed financial tables and reconciliations of GAAP to non-GAAP financial measures included in the earnings release to gain a deeper understanding of J.Jill Inc's financial position and performance.
For additional information and to participate in the earnings conference call, stakeholders can access the details provided in the earnings release. J.Jill Inc remains committed to transparency and thorough communication with its investors and the broader financial community.
Explore the complete 8-K earnings release (here) from J.Jill Inc for further details.
This article first appeared on GuruFocus.
