J.Jill (NYSE: JILL) reported Q3 EPS of $0.05, $0.06 worse than the analyst estimate of $0.11. Revenue for the quarter came in at $166.1 million versus the consensus estimate of $175.4 million.

Jim Scully, Interim Chief Executive Officer, commented, “While our third quarter results were disappointing, the team is working hard to stabilize the business and drive improvements at a much quicker pace with an immediate focus on operating fundamentals and financial discipline. Our brand has a loyal following, and our attractive store base, combined with our sizable direct business, gives us confidence that we have the key building blocks to once again create value for shareholders.”

For the third quarter ended November 2, 2019:

• Total net sales for the thirteen weeks ended November 2, 2019 decreased $8.0 million to $166.1 million versus $174.1 million for the thirteen weeks ended November 3, 2018.
• Total company comparable sales, which includes comparable store and direct to consumer sales, decreased by 7.0%.
• Direct to consumer net sales represented 43.0% of total net sales, compared to 39.8% in the third quarter of fiscal 2018.
• Gross profit decreased to $106.9 million from $115.5 million in the third quarter of fiscal 2018. Gross margin was 64.4% compared to 66.3% in the third quarter of fiscal 2018.
• SG&A was $98.0 million compared to $101.6 million in the third quarter of fiscal 2018. SG&A as a percentage of total net sales was 59.0% compared to 58.3% in the third quarter of fiscal 2018.
• Income from operations decreased to $9.0 million from $13.9 million in the third quarter of fiscal 2018. Adjusted Income from Operations* was $15.6 million compared to Adjusted Income from Operations of $21.1 million in the third quarter of fiscal 2018.
• Interest expense increased to $4.8 million from $4.7 million in the third quarter of fiscal 2018.
• Income tax expense was $1.8 million compared to $2.5 million in the third quarter of fiscal 2018, and the effective tax rate was 42.5% compared to 27.1% in the third quarter of 2018.
• Net income was $2.4 million compared to $6.7 million in the third quarter of fiscal 2018.
• Diluted earnings per share was $0.05 compared to $0.15 in the third quarter of fiscal 2018.
• Adjusted EBITDA* for the third quarter of fiscal 2019 decreased by 18.8% to $19.6 million from $24.2 million in the third quarter of fiscal 2018. As a percentage of total net sales, Adjusted EBITDA* was 11.8% compared to 13.9% in the third quarter of fiscal 2018.

GUIDANCE:

J.Jill sees Q4 2019 EPS of ($0.16)-($0.14), versus the consensus of $0.06.

J.Jill sees FY2019 EPS of ($0.24)-($0.20), versus the consensus of $0.21.

Outlook

The following guidance for fourth quarter and full year fiscal 2019 does not include any costs associated with the CEO transition announced today, December 5, 2019.

For the fourth quarter of fiscal 2019, we expect total comparable sales to decrease 8% to 10% with total net sales expected to decrease 5% to 7%. Earnings per share are expected to be a loss of $0.14 to $0.16, compared to diluted earnings per share of $0.05 in the fourth quarter of fiscal 2018.

For the full 2019 fiscal year, we expect total comparable sales to decrease 5% to 6% with total net sales expected to decrease 3% to 4%. We now expect Adjusted Diluted Earnings per Share, which excludes the impact of the non-cash impairment charge and other non-recurring expenses in the second quarter fiscal 2019, as well as costs associated with the CEO transition, to be a loss of $0.02 to $0.04 versus our prior Adjusted Diluted Earnings per Share guidance of $0.20 to $0.24. This is compared to diluted earnings per share of $0.69 and Adjusted Diluted Earnings per Share of $0.72 in fiscal 2018.

For earnings history and earnings-related data on J.Jill (JILL) click here.