EXHIBIT 99.1
J.JILL, INC. ANNOUNCES SECOND QUARTER 2022 RESULTS
Continued Disciplined Execution of Operating Model Drives Strong Profitability
Net Sales Growth of 0.7% and Comparable Sales Growth of 0.8% vs. Q2 FY2021
Gross Profit Growth of 2.9% and Gross Margin increase of 150bps vs. Q2 FY2021
Income from Operations grew 19.9% to $28.2M vs. Q2 FY2021
Quincy, MA – September 1, 2022 – J.Jill, Inc. (NYSE:JILL) today announced financial results for the second quarter ended July 30, 2022.
Claire Spofford, President and Chief Executive Officer of J.Jill, Inc. stated, “We are pleased to have delivered a record quarter of Adjusted EBITDA while navigating a volatile consumer environment. Our results reflect the disciplined execution of our operating model focused on driving full price sales, regularly flowing newness, and managing expenses.”
Ms. Spofford, continued, “As we look to the remainder of the year, we plan to continue to execute against our initiatives including investing in our plans for long-term profitable growth while remaining prudent with our expectations related to the consumer. As part of our growth strategy, we are focused on modernizing the J.Jill brand to increase relevance with both new and loyal customers. We recently announced our ‘Welcome Everybody’ campaign focused on delivering an elevated shopping experience online and in stores, that celebrates the totality of all women. We remain confident in our ability to deliver against our objectives and expect to leverage the operating disciplines and stronger foundation we now have in place to continue to drive results.”
For the second quarter ended July 30, 2022:
1
For the twenty-six weeks ended July 30, 2022:
2
Balance Sheet Highlights
*Non-GAAP financial measures. Please see “Non-GAAP Financial Measures” and “Reconciliation of GAAP Net Income to Adjusted EBITDA, Adjusted Income from Operations and Adjusted Net Income” for more information.
Outlook
For the third quarter of fiscal 2022, the Company expects revenues to be flat to down 3.0% compared to the third quarter of fiscal 2021, and for Adjusted EBITDA to be in the range of $21.0 million and $23.0 million.
For fiscal 2022, the Company now expects total capital expenditures of about $15.0 million and to close net 10 to 14 stores, including the opening of up to 2 new stores late in the fourth quarter.
Conference Call Information
A conference call to discuss second quarter 2022 results is scheduled for today, September 1, 2022, at 8:00 a.m. Eastern Time. Those interested in participating in the call are invited to dial (888) 330-3391 or (646) 960-0845 if calling internationally. Please dial in approximately 10 minutes prior to the start of the call and reference Conference ID 2289963 when prompted. A live audio webcast of the conference call will be available online at http://investors.jjill.com/Investors-Relations/News-Events/events.
A taped replay of the conference call will be available approximately two hours following the call and can be accessed both online and by dialing (800) 770-2030 or (647) 362-9199. The pin number to access the telephone replay is 2289963. The telephone replay will be available until Thursday, September 08, 2022.
About J.Jill, Inc.
J.Jill is a premier omnichannel retailer and nationally recognized women’s apparel brand committed to delighting customers with great wear-now product. The brand represents an easy, thoughtful and inspired style that reflects the confidence of remarkable women who live life with joy, passion and purpose. J.Jill offers a guiding customer experience through 247 stores nationwide and a robust ecommerce platform. J.Jill is headquartered outside Boston. For more information, please visit www.jjill.com or http://investors.jjill.com. The information included on our websites is not incorporated by reference herein.
3
Non-GAAP Financial Measures
To supplement our unaudited consolidated financial statements presented in accordance with generally accepted accounting principles (“GAAP”), we use the following non-GAAP measures of financial performance:
While we believe that Adjusted EBITDA, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss) and Adjusted Diluted EPS are useful in evaluating our business, they are non-GAAP financial measures that have limitations as analytical tools. Adjusted EBITDA, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss) and Adjusted Diluted EPS should not be considered alternatives to, or substitutes for, Net Income (Loss) or EPS, which are calculated in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate Adjusted EBITDA, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss) and Adjusted Diluted EPS differently or not at all, which reduces the usefulness of such non-GAAP financial measures as tools for comparison. We recommend that you review the reconciliation and calculation of Adjusted EBITDA, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss) and Adjusted Diluted EPS to Net Income (Loss) and EPS, the most directly comparable GAAP financial measures, under “Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA and Adjusted Net Income (Loss) as well as Reconciliation of GAAP Operating Income (Loss) to Adjusted Income (Loss) from Operations” and not rely solely on Adjusted EBITDA, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss), Adjusted Diluted EPS or any single financial measure to evaluate our business.
4
Forward-Looking Statements
This press release contains, and oral statements made from time to time by our representatives may contain, “forward-looking statements.” Forward-looking statements include statements under “Outlook” and other statements identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “projects” and similar references to future periods, or by the inclusion of forecasts or projections. Forward-looking statements are based on our current expectations and assumptions regarding capital market conditions, our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, regional, national or global political, economic, business, competitive, market and regulatory conditions, including risks regarding our ability to manage inventory or anticipate consumer demand; changes in consumer confidence and spending; our competitive environment; our failure to open new profitable stores or successfully enter new markets; the impact of the COVID-19 epidemic on the Company and the economy as a whole; post-pandemic changes in customer behavior and the timeline of economic recovery; and other factors set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 29, 2022. Any forward-looking statement made in this press release speaks only as of the date on which it is made. J.Jill undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
(Tables Follow)
5
J.Jill, Inc.
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
(Amounts in thousands, except share and per share data)
|
| For the Thirteen Weeks Ended |
| |||||
|
| July 30, 2022 |
|
| July 31, 2021 |
| ||
Net sales |
| $ | 160,343 |
|
| $ | 159,236 |
|
Costs of goods sold |
|
| 47,869 |
|
|
| 49,883 |
|
Gross profit |
|
| 112,474 |
|
|
| 109,353 |
|
Selling, general and administrative expenses |
|
| 84,281 |
|
|
| 85,846 |
|
Operating income |
|
| 28,193 |
|
|
| 23,507 |
|
Fair value adjustment of derivative |
|
| — |
|
|
| 625 |
|
Fair value adjustment of warrants - related party (a) |
|
| — |
|
|
| 38,338 |
|
Interest expense |
|
| 3,547 |
|
|
| 4,217 |
|
Interest expense, net - related party |
|
| 929 |
|
|
| 529 |
|
Income (loss) before provision for income taxes |
|
| 23,717 |
|
|
| (20,202 | ) |
Income tax provision |
|
| 5,912 |
|
|
| 4,446 |
|
Net income (loss) and total comprehensive income (loss) |
| $ | 17,805 |
|
| $ | (24,648 | ) |
Net income (loss) per common share attributable to common shareholders |
|
|
|
|
|
| ||
Basic |
| $ | 1.28 |
|
| $ | (1.98 | ) |
Diluted |
| $ | 1.25 |
|
| $ | (1.98 | ) |
Weighted average number of common shares outstanding |
|
|
|
|
|
| ||
Basic |
|
| 13,930,366 |
|
|
| 12,450,351 |
|
Diluted |
|
| 14,252,429 |
|
|
| 12,450,351 |
|
6
J.Jill, Inc.
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
(Amounts in thousands, except share and per share data)
|
| For the Twenty-Six Weeks Ended |
| |||||
|
| July 30, 2022 |
|
| July 31, 2021 |
| ||
Net sales |
| $ | 317,412 |
|
| $ | 288,322 |
|
Costs of goods sold |
|
| 95,475 |
|
|
| 91,143 |
|
Gross profit |
|
| 221,937 |
|
|
| 197,179 |
|
Selling, general and administrative expenses |
|
| 169,859 |
|
|
| 164,985 |
|
Operating income |
|
| 52,078 |
|
|
| 32,194 |
|
Fair value adjustment of derivative |
|
| — |
|
|
| 2,775 |
|
Fair value adjustment of warrants - related party (a) |
|
| — |
|
|
| 56,984 |
|
Interest expense, net |
|
| 7,205 |
|
|
| 8,563 |
|
Interest expense, net - related party |
|
| 1,731 |
|
|
| 990 |
|
Income (loss) before provision for income taxes |
|
| 43,142 |
|
|
| (37,118 | ) |
Income tax provision |
|
| 10,922 |
|
|
| 5,838 |
|
Net income (loss) and total comprehensive income (loss) |
| $ | 32,220 |
|
| $ | (42,956 | ) |
Net loss per common share attributable to common shareholders: |
|
|
|
|
|
| ||
Basic |
| $ | 2.32 |
|
| $ | (3.88 | ) |
Diluted |
| $ | 2.27 |
|
| $ | (3.88 | ) |
Weighted average number of common shares outstanding: |
|
|
|
|
|
| ||
Basic |
|
| 13,902,457 |
|
|
| 11,058,351 |
|
Diluted |
|
| 14,211,768 |
|
|
| 11,058,351 |
|
7
J.Jill, Inc.
Consolidated Balance Sheets
(Unaudited)
(Amounts in thousands, except common share data)
|
| July 30, 2022 |
|
| January 29, 2022 |
| ||
Assets |
|
|
|
|
|
| ||
Current assets: |
|
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 61,856 |
|
| $ | 35,957 |
|
Accounts receivable |
|
| 4,090 |
|
|
| 5,811 |
|
Inventories, net |
|
| 54,383 |
|
|
| 56,024 |
|
Prepaid expenses and other current assets |
|
| 25,608 |
|
|
| 25,456 |
|
Total current assets |
|
| 145,937 |
|
|
| 123,248 |
|
Property and equipment, net |
|
| 50,427 |
|
|
| 57,329 |
|
Intangible assets, net |
|
| 76,949 |
|
|
| 80,711 |
|
Goodwill |
|
| 59,697 |
|
|
| 59,697 |
|
Operating lease assets, net |
|
| 127,165 |
|
|
| 130,744 |
|
Other assets |
|
| 97 |
|
|
| 120 |
|
Total assets |
| $ | 460,272 |
|
| $ | 451,849 |
|
Liabilities and Shareholders’ Deficit |
|
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
|
| ||
Accounts payable |
| $ | 40,184 |
|
| $ | 49,924 |
|
Accrued expenses and other current liabilities |
|
| 45,584 |
|
|
| 48,853 |
|
Current portion of long-term debt |
|
| 2,739 |
|
|
| 7,692 |
|
Current portion of operating lease liabilities |
|
| 34,667 |
|
|
| 32,276 |
|
Total current liabilities |
|
| 123,174 |
|
|
| 138,745 |
|
Long-term debt, net of discount and current portion |
|
| 196,009 |
|
|
| 196,511 |
|
Long-term debt, net of discount and current portion - related party |
|
| 7,336 |
|
|
| 5,605 |
|
Deferred income taxes |
|
| 10,704 |
|
|
| 10,704 |
|
Operating lease liabilities, net of current portion |
|
| 133,295 |
|
|
| 143,207 |
|
Other liabilities |
|
| 1,535 |
|
|
| 1,731 |
|
Total liabilities |
|
| 472,053 |
|
|
| 496,503 |
|
Commitments and contingencies |
|
|
|
|
|
| ||
Shareholders’ Deficit |
|
|
|
|
|
| ||
Common stock, par value $0.01 per share; 50,000,000 shares authorized; 10,148,504 and 10,001,422 shares issued and outstanding at July 30, 2022 and January 29, 2022, respectively |
|
| 102 |
|
|
| 100 |
|
Additional paid-in capital |
|
| 210,398 |
|
|
| 209,747 |
|
Accumulated deficit |
|
| (222,281 | ) |
|
| (254,501 | ) |
Total shareholders’ deficit |
|
| (11,781 | ) |
|
| (44,654 | ) |
Total liabilities and shareholders’ deficit |
| $ | 460,272 |
|
| $ | 451,849 |
|
8
J.Jill, Inc.
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
(Unaudited)
(Amounts in thousands)
|
| For the Thirteen Weeks Ended |
| |||||
|
| July 30, 2022 |
|
| July 31, 2021 |
| ||
Net income (loss) |
| $ | 17,805 |
|
| $ | (24,648 | ) |
Fair value adjustment of derivative |
|
| — |
|
|
| 625 |
|
Fair value adjustment of warrants - related party (a) |
|
| — |
|
|
| 38,338 |
|
Interest expense, net |
|
| 3,547 |
|
|
| 4,217 |
|
Interest expense, net - related party |
|
| 929 |
|
|
| 529 |
|
Income tax provision |
|
| 5,912 |
|
|
| 4,446 |
|
Depreciation and amortization |
|
| 6,331 |
|
|
| 7,295 |
|
Equity-based compensation expense (b) |
|
| 976 |
|
|
| 649 |
|
Write-off of property and equipment (c) |
|
| 71 |
|
|
| 630 |
|
Adjustment for costs to exit retail stores (d) |
|
| (3 | ) |
|
| 9 |
|
Other non-recurring items (e) |
|
| 4 |
|
|
| 616 |
|
Adjusted EBITDA |
| $ | 35,572 |
|
| $ | 32,706 |
|
Net sales |
| $ | 160,343 |
|
| $ | 159,236 |
|
Adjusted EBITDA margin |
|
| 22.2 | % |
|
| 20.5 | % |
|
| For the Twenty-Six Weeks Ended |
| |||||
|
| July 30, 2022 |
|
| July 31, 2021 |
| ||
|
|
|
|
|
|
| ||
Net income (loss) |
| $ | 32,220 |
|
|
| (42,956 | ) |
Fair value adjustment of derivative |
|
| - |
|
|
| 2,775 |
|
Fair value adjustment of warrants - related party (a) |
|
| - |
|
|
| 56,984 |
|
Interest expense, net |
|
| 7,205 |
|
|
| 8,563 |
|
Interest expense, net - related party |
|
| 1,731 |
|
|
| 990 |
|
Income tax provision |
|
| 10,922 |
|
|
| 5,838 |
|
Depreciation and amortization |
|
| 13,044 |
|
|
| 14,871 |
|
Equity-based compensation expense (b) |
|
| 1,718 |
|
|
| 1,092 |
|
Write-off of property and equipment (c) |
|
| 163 |
|
|
| 716 |
|
Adjustment for costs to exit retail stores (d) |
|
| (246 | ) |
|
| (710 | ) |
Impairment of long lived assets (f) |
|
| 108 |
|
|
| — |
|
Other non-recurring items (e) |
|
| 4 |
|
|
| 1,468 |
|
Adjusted EBITDA |
| $ | 66,869 |
|
| $ | 49,631 |
|
Net sales |
| $ | 317,412 |
|
| $ | 288,322 |
|
Adjusted EBITDA margin |
|
| 21.1 | % |
|
| 17.2 | % |
9
J.Jill, Inc.
Reconciliation of GAAP Operating Income to Adjusted Income from Operations
(Unaudited)
(Amounts in thousands)
|
| For the Thirteen Weeks Ended |
| |||||
|
| July 30, 2022 |
|
| July 31, 2021 |
| ||
|
|
|
|
|
|
| ||
Operating income |
| $ | 28,193 |
|
| $ | 23,507 |
|
Adjustment for costs to exit retail stores (a) |
|
| (3 | ) |
|
| 9 |
|
Other non-recurring items (c) |
|
| 4 |
|
|
| 616 |
|
Adjusted income from operations |
| $ | 28,194 |
|
| $ | 24,132 |
|
|
|
|
|
|
|
| ||
|
| For the Twenty-Six Weeks Ended |
| |||||
|
| July 30, 2022 |
|
| July 31, 2021 |
| ||
|
|
|
|
|
|
| ||
Operating income |
| $ | 52,078 |
|
| $ | 32,194 |
|
Adjustment for costs to exit retail stores (a) |
|
| (246 | ) |
|
| (710 | ) |
Impairment of long-lived assets (b) |
|
| 108 |
|
|
| — |
|
Other non-recurring items (c) |
|
| 4 |
|
|
| 1,468 |
|
Adjusted income from operations |
| $ | 51,944 |
|
| $ | 32,952 |
|
10
J.Jill, Inc.
Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income
(Unaudited)
(Amounts in thousands, except share and per share data)
|
| For the Thirteen Weeks Ended |
| |||||
|
| July 30, 2022 |
|
| July 31, 2021 |
| ||
Net income (loss) and total comprehensive income (loss) |
| $ | 17,805 |
|
| $ | (24,648 | ) |
Add: Income tax provision |
|
| 5,912 |
|
|
| 4,446 |
|
Income (loss) before provision for income tax |
|
| 23,717 |
|
|
| (20,202 | ) |
Add: Fair value adjustment of derivative |
|
| — |
|
|
| 625 |
|
Add: Fair value adjustment of warrants - related party (a) |
|
| — |
|
|
| 38,338 |
|
Add: Adjustment for costs to exit retail stores (b) |
|
| (3 | ) |
|
| 9 |
|
Add: Other non-recurring items (d) |
|
| 4 |
|
|
| 616 |
|
Adjusted income before income tax provision |
|
| 23,718 |
|
|
| 19,386 |
|
Less: Adjusted tax provision (e) |
|
| 6,024 |
|
|
| 6,242 |
|
Adjusted net income |
| $ | 17,694 |
|
| $ | 13,144 |
|
|
|
|
|
|
|
| ||
Adjusted net income per share attributable to common shareholders |
|
|
|
|
|
| ||
Basic |
| $ | 1.27 |
|
| $ | 1.06 |
|
Diluted |
| $ | 1.24 |
|
| $ | 0.93 |
|
Weighted average number of common shares |
|
|
|
|
|
| ||
Basic |
|
| 13,930,366 |
|
|
| 12,450,351 |
|
Diluted |
|
| 14,252,429 |
|
|
| 14,092,520 |
|
|
| For the Twenty-Six Weeks Ended |
| |||||
|
| July 30, 2022 |
|
| July 31, 2021 |
| ||
Net income (loss) and total comprehensive income (loss) |
| $ | 32,220 |
|
| $ | (42,956 | ) |
Add: Income tax provision |
|
| 10,922 |
|
|
| 5,838 |
|
Income (loss) before provision for income tax |
|
| 43,142 |
|
|
| (37,118 | ) |
Add: Fair value adjustment of derivative |
|
| — |
|
|
| 2,775 |
|
Add: Fair value adjustment of warrants - related party (a) |
|
| — |
|
|
| 56,984 |
|
Add: Adjustment for costs to exit retail stores (b) |
|
| (246 | ) |
|
| (710 | ) |
Add: Impairment of long-lived assets (c) |
|
| 108 |
|
|
| — |
|
Add: Other non-recurring items (d) |
|
| 4 |
|
|
| 1,468 |
|
Adjusted income before income tax provision |
|
| 43,008 |
|
|
| 23,399 |
|
Less: Adjusted tax provision(e) |
|
| 10,924 |
|
|
| 7,534 |
|
Adjusted net income |
| $ | 32,084 |
|
| $ | 15,865 |
|
|
|
|
|
|
|
| ||
Adjusted net income per share attributable to common shareholders |
|
|
|
|
|
| ||
Basic |
| $ | 2.31 |
|
| $ | 1.43 |
|
Diluted |
| $ | 2.26 |
|
| $ | 1.17 |
|
Weighted average number of common shares |
|
|
|
|
|
| ||
Basic |
|
| 13,902,457 |
|
|
| 11,058,351 |
|
Diluted |
|
| 14,211,768 |
|
|
| 13,586,297 |
|
11
Contacts:
Investor Relations:
Caitlin Churchill
ICR, Inc.
investors@jjill.com
203-682-8200
Business and Financial Media:
Ariel Kouvaras
Sloane & Company
akouvaras@sloanepr.com
973-897-6241
Brand Media:
Meredith Schwenk
J.Jill, Inc.
media@jjill.com
617-376-4399
12