J.Jill, Inc. (NYSE:JILL) today announced financial results for the first
quarter fiscal 2017 ended April 29, 2017.
Paula Bennett, President and CEO of J.Jill, Inc. stated, "We are pleased
with our start to the year and our ability to consistently capitalize on
the strengths of our omni-channel data-driven business model. Our first
quarter performance was strong, highlighted by total comparable sales
growth of 9.9% and adjusted net income growth of about 50% versus last
year. This quarter further exemplifies how well positioned we are to
continue to capture market share and drive bottom-line earnings."
Ms. Bennett continued, "Our team is hyper-focused on our customer – who
she is, what she wants, and what is relevant to her. With this always in
mind, we will continue to delight her with the product assortment and
omni-channel shopping experience that brings her to J.Jill and builds
the great loyalty she has with our brand. We are confident we have the
right formula and approach in place to continue to drive these
consistent positive results and to deliver against our goals for 2017
and beyond."
For the first quarter ended April 29, 2017:
Total net sales increased by 12.5% to $166.1 million from $147.7
million in the first quarter of fiscal 2016.
Total company comparable sales, which includes comparable store sales
and direct to consumer comparable sales, increased by 9.9%.
Direct to consumer net sales represented 42.6% of total net sales, up
from 40.7% in the first quarter of fiscal 2016.
Gross profit increased to $115.6 million from $101.5 million in the
first quarter of fiscal 2016. As a percentage of total net sales,
gross profit was 69.6% compared to 68.7% in the first quarter of
fiscal 2016.
SG&A was $97.0 million compared to $87.1 million in the first quarter
of fiscal 2016, and as a percentage of total net sales was 58.4%
compared to 59.0% in the first quarter of fiscal 2016. First quarter
2017 SG&A included $3.6 million of net non-recurring expenses compared
to $1.1 million of net non-recurring expenses incurred in first
quarter fiscal 2016 related to the Company's initial public offering.
Income from operations, inclusive of non-recurring SG&A expenses,
increased to $18.6 million, and as a percentage of total net sales was
11.2% compared to 9.8% in the first quarter of fiscal 2016.
Adjusted EBITDA* for the first quarter of fiscal 2017
increased by 19.7% to $31.0 million from $25.9 million in the first
quarter of fiscal 2016.
Income tax expense increased to $5.6 million from $4.2 million in the
first quarter of fiscal 2016, and the effective tax rate was 41.1%
compared to 41.2% in the first quarter of 2016.
Diluted earnings per share were $0.18 compared to $0.14 in the first
quarter of fiscal 2016.
Adjusted diluted earnings per share* for first quarter of
fiscal 2017, which excludes net non-recurring expenses, were $0.24
compared to adjusted diluted earnings per share of $0.16 in the first
quarter of fiscal 2016.
The Company ended the first quarter fiscal 2017 with $15.3 million in
cash and cash equivalents, compared to $13.5 million at the end of
fiscal 2016. Inventory at the end of the first quarter fiscal 2017
increased by 10.4% to $73.6 million compared to $66.6 million at the end
of fiscal 2016. The Company opened one net new store in the first
quarter fiscal 2017 and ended the quarter with 276 stores.
* Non-GAAP financial measures. Please see "Non-GAAP Financial
Measures" and "Reconciliation of GAAP Net Income to Adjusted EBITDA and
Adjusted Net Income" for more information.
Outlook
For the second quarter of fiscal 2017, we expect total comparable sales
to increase in the high single digits. GAAP diluted earnings per share
are expected to be in the range of $0.26 to $0.28. Adjusted diluted
earnings per share, which excludes approximately $0.9 million of
non-recurring expenses associated with the company's initial public
offering, are expected to be in the range of $0.27 to $0.29. Both GAAP
and adjusted diluted earnings per share include approximately $0.3
million of public company costs not incurred in 2016. This guidance
assumes 43.7 million shares outstanding and an income tax expense rate
of approximately 40%.
For the full 2017 fiscal year, on a 52-week basis, we expect total
comparable sales to increase in the high single digits. GAAP diluted
earnings per share are expected to be in the range of $0.72 to $0.76.
Adjusted diluted earnings per share, which excludes approximately $5.0
million of non-recurring expenses associated with the company's initial
public offering, are expected to be in the range of $0.80 to $0.84. Both
GAAP and adjusted diluted earnings per share include approximately $1.4
million of public company costs not incurred in 2016.
The 53rd week of fiscal 2017, which has not been included in
the 52-week basis outlook given above, is expected to contribute an
additional $9.0 million in sales and approximately $0.01 of earnings per
share.
Conference Call Information
A conference call to discuss first quarter fiscal 2017 results is
scheduled for today, May 31, 2017, at 8:00 a.m. Eastern Time. Those
interested in participating in the call are invited to dial (877)
201-0168 or (647) 788-4901 if calling internationally. Please dial in
approximately 10 minutes prior to the start of the call and reference
Conference ID 5602577 when prompted. A live audio webcast of the
conference call will be available online at http://investors.jjill.com/Investors-Relations/News-Events.
A taped replay of the conference call will be available approximately
two hours following the live call and can be accessed both online and by
dialing (800) 585-8367 or (416) 621-4642. The pin number to access the
telephone replay is 5062577. The telephone replay will be available
until Wednesday, June 7, 2017.
About J.Jill, Inc.
J.Jill is an omni-channel premier retailer and nationally recognized
women's apparel brand committed to delighting our customers with a great
wear-now product. The J.Jill brand represents an easy, relaxed, inspired
style that reflects the confidence and comfort of a woman with a rich,
full life. J.Jill operates an omni-channel platform that delivers a
seamless experience to our customers through 276 stores nationwide and a
robust ecommerce experience. J.Jill is headquartered outside Boston. For
more information, please visit www.JJill.com.
The information included on our website is not incorporated by reference
herein.
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:
Adjusted EBITDA, which represents net income (loss) plus interest
expense, provision (benefit) for income taxes, depreciation and
amortization, equity-based compensation expense, write-off of property
and equipment, and other non-recurring expenses, primarily consisting
of outside legal and professional fees associated with the initial
public offering. We present Adjusted EBITDA on a consolidated basis
because our management uses it as a supplemental measure in assessing
our operating performance, and we believe that it is helpful to
investors, securities analysts and other interested parties as a
measure of our comparative operating performance from period to
period. We also use Adjusted EBITDA as one of the primary methods for
planning and forecasting overall expected performance of our business
and for evaluating on a quarterly and annual basis actual results
against such expectations. Further, we recognize Adjusted EBITDA as a
commonly used measure in determining business value and as such, use
it internally to report results.
Adjusted Net Income, which represents net income (loss) plus other
non-recurring expenses, primarily consisting of outside legal and
professional fees associated with the initial public offering. We
present Adjusted Net Income on a consolidated basis because our
management uses it as a supplemental measure in assessing our
operating performance, and we believe that it is helpful to investors,
securities analysts and other interested parties as a measure of our
comparative operating performance from period to period.
Adjusted Earnings per Share ("Adjusted EPS") represents Adjusted Net
Income divided by the number of shares outstanding. Adjusted EPS is
presented as a supplemental measure in assessing our operating
performance, and we believe that it is helpful to investors,
securities analysts and other interested parties as a measure of our
comparative operating performance from period to period.
While we believe that Adjusted EBITDA, Adjusted Net Income, and Adjusted
EPS are useful in evaluating our business, they are non-GAAP financial
measures that have limitations as analytical tools. Adjusted EBITDA,
Adjusted Net Income, and Adjusted 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 Net Income, and Adjusted 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 Net Income, and Adjusted EPS to
net income (loss) and EPS, the most directly comparable GAAP financial
measures, under "Reconciliation of GAAP Net Income to Adjusted EBITDA
and Adjusted Net Income" and not rely solely on Adjusted EBITDA,
Adjusted Net Income, Adjusted EPS, or any single financial measure to
evaluate our business.
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" offering
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 regional, national or global political, economic,
business, competitive, market and regulatory conditions, including risk
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 and other factors set forth under "Risk Factors" in
the Form 10K. 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)
J.Jill, Inc.
Consolidated Balance Sheets
(Unaudited)
(Amounts in thousands)
April 29, 2017
January 28, 2017
Assets
Current assets
Cash
$
15,332
$
13,468
Accounts receivable
10,457
3,851
Inventories, net
73,583
66,641
Prepaid expenses and other current assets
19,054
18,559
Receivable from related party
2,227
1,922
Total current assets
120,653
104,441
Property and equipment, net
102,359
102,322
Intangible assets, net
159,852
163,483
Goodwill
197,026
197,026
Other assets
863
1,033
Total assets
$
580,753
$
568,305
Liabilities and Shareholders' / Members' Equity
Current liabilities
Accounts payable
$
38,540
$
38,438
Accrued expenses and other current liabilities
47,821
46,121
Current portion of long-term debt
2,799
2,799
Total current liabilities
89,160
87,358
Long-term debt, net of discount and current portion
264,243
264,440
Deferred income taxes
72,887
73,511
Other liabilities
23,243
20,132
Total liabilities
449,533
445,441
Shareholders' / Members' Equity
Common stock
437
-
Common units
-
-
Contributed capital
-
116,743
Additional paid-in capital
116,635
-
Accumulated earnings
14,148
6,121
Total shareholders' / members' equity
131,220
122,864
Total liabilities and shareholders' / members' equity
$
580,753
$
568,305
J.Jill, Inc.
Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
(Amounts in thousands, except share and per share data)
For the Thirteen Weeks Ended
April 29, 2017
April 30, 2016
Net sales
$
166,126
$
147,665
Cost of goods sold
50,518
46,159
Gross profit
115,608
101,506
Selling, general and administrative expenses
97,033
87,072
Operating income
18,575
14,434
Interest expense
4,945
4,112
Income before provision for income taxes
13,630
10,322
Provision for income taxes
5,603
4,249
Net income and total comprehensive income
$
8,027
$
6,073
Net income per common share attributable to common shareholders
Basic
$
0.19
$
0.14
Diluted
$
0.18
$
0.14
Weighted average number of common shares outstanding
Basic
42,518,143
43,747,944
Diluted
43,680,485
43,747,944
J.Jill, Inc.
Reconciliation of GAAP Net Income to Adjusted EBITDA
(Unaudited)
(Amounts in thousands)
For the Thirteen Weeks Ended
April 29, 2017
April 30, 2016
Net income
$
8,027
$
6,073
Interest expense
4,945
4,112
Provision for income taxes
5,603
4,249
Depreciation and amortization
8,799
10,261
Equity-based compensation expense (a)
24
75
Write-off of property and equipment (b)
2
-
Other non-recurring expenses (c)
3,585
1,108
Adjusted EBITDA
$
30,985
$
25,878
(a): Represents expenses associated with equity incentive
instruments granted to our management. Incentive instruments are
accounted for as equity-classified awards with the related
compensation expense recognized based on fair value at the date of
the grants.
(b): Represents net gain or loss on the disposal of fixed assets.
(c): Represents items management believes are not indicative of
ongoing operating performance. These expenses are primarily composed
of legal and professional fees associated with the initial public
offering completed March 9, 2017.
J.Jill, Inc.
Reconciliation of GAAP Net Income to Adjusted Net Income
(Unaudited)
(Amounts in thousands)
For the Thirteen Weeks Ended
April 29, 2017
April 30, 2016
Net income and total comprehensive income
$
8,027
$
6,073
Add: Provision for income taxes
5,603
4,249
Income before provision for income taxes
13,630
10,322
Add: Other non-recurring expenses(a)
3,585
1,108
Adjusted Income before provision for income taxes
17,215
11,430
Less: Adjusted Tax Provision(b)
6,886
4,572
Adjusted net income
$
10,329
$
6,858
Adjusted net income per common share attributable to common
shareholders
Basic
$
0.24
$
0.16
Diluted
$
0.24
$
0.16
Weighted average number of common shares outstanding
Basic
42,518,143
43,747,944
Diluted
43,680,485
43,747,944
(a): Represents items management believes are not indicative of
ongoing operating performance. These expenses are primarily composed
of legal and professional fees associated with the initial public
offering completed March 9, 2017.
(b): The adjusted tax provision for adjusted net income is estimated
by applying 40% to the adjusted income before provision for income
taxes.
