J.Jill (NYSE: JILL) reported Q4 EPS of ($0.06), $0.04 better than the analyst estimate of ($0.10). Revenue for the quarter came in at $168.06 million versus the consensus estimate of $163.2 million.

For the fourth quarter ended February 1, 2020:

• Total net sales for the thirteen weeks ended February 1, 2020 decreased $2.8 million to $168.1 million versus $170.9 million for the thirteen weeks ended February 2, 2019.
• Total company comparable sales, which includes comparable store and direct to consumer sales, decreased by 2.8%.
• Direct to consumer net sales represented 47.3% of total net sales, compared to 45.3% in the fourth quarter of fiscal 2018.
• Gross profit decreased to $100.0 million from $107.8 million in the fourth quarter of fiscal 2018. Gross margin was 59.5% compared to 63.1% in the fourth quarter of fiscal 2018.
• SG&A was $101.0 million compared to $99.8 million in the fourth quarter of fiscal 2018. In the fourth quarter of fiscal 2019, SG&A included $2.6 million of expenses of which $0.3 million related to the impairment of long-lived assets, $1.9 million related to other non-recurring expenses and $0.4 million of accelerated stock-based compensation. Excluding non-recurring expenses in fiscal 2019 and 2018, SG&A as a percentage of total net sales was 58.5% compared to 58.4% in the fourth quarter of fiscal 2018.
• Income from operations decreased to a loss of $37.0 million from income of $8.0 million in the fourth quarter of fiscal 2018. Adjusted Income from Operations* was $1.7 million compared to Adjusted Income from Operations* of $8.0 million in the fourth quarter of fiscal 2018.
• Interest expense remained the same at $4.7 million in the fourth quarter of fiscal 2019 and 2018.
• Income tax benefit was $3.2 million compared to an expense of $1.2 million in the fourth quarter of fiscal 2018, and the effective tax rate was 7.6% compared to 37.1% in the fourth quarter of 2018.
• Net income decreased to a loss of $38.6 million compared to an income of $2.1 million in the fourth quarter of fiscal 2018.
• Diluted earnings per share was a loss of $0.88 compared to income of $0.05 in the fourth quarter of fiscal 2018, including the impact of one-time expenses. Excluding these impacts, Adjusted Diluted Earnings per Share* in the fourth quarter of fiscal 2019 was a loss of $0.05 compared to income of $0.05 in the fourth quarter of 2018.

Adjusted EBITDA* for the fourth quarter of fiscal 2019 decreased by 36.2% to $11.8 million from $18.5 million in the fourth quarter of fiscal 2018. As a percentage of total net sales, Adjusted EBITDA* was 7.0% compared to 10.8% in the fourth quarter of fiscal 2018.

James S. Scully, Interim Chief Executive Officer of J.Jill, Inc. stated, “Our fourth quarter results exceeded our expectations as we continued to make progress in balancing a reduction in our inventory levels while maintaining discipline with our bottom line. While pleased to end the year with inventories better positioned, we continue to see great opportunity to instill further operating disciplines within the business.”

Mr. Scully continued, “We have entered fiscal 2020 with strong focus on gross margin stabilization and recovery driven by enhanced inventory discipline and improved product assortments. I want to thank all of our teams for their hard work and dedication to J.Jill. The key tenets of the brand, including our attractive and loyal customer demographic, remain strong and we are focused on building the capabilities to capture the long term opportunities ahead for this brand.”

GUIDANCE:

J.Jill sees Q1 2020 EPS of $0.06-$0.08.

J.Jill sees FY2020 EPS of $0.10-$0.14, versus the consensus of ($0.05).

Beginning in the first quarter 2020, we will report total comparable sales excluding shipping and handling revenue. Please see the restated comparable sales table at the end of our press release.

• For the first quarter of fiscal 2020, we expect total comparable sales to decrease 3% to 5% compared to a decrease of 2.4% (as adjusted) for the first quarter of fiscal 2019. Total net sales are expected to decrease 2% to 4%. Diluted earnings per share are expected to be $0.06 to $0.08, compared to diluted earnings per share of $0.10 in the first quarter of fiscal 2019.
• For the full 2020 fiscal year, we expect total comparable sales to decrease 3% to 5% compared to a decrease of 3.2% (as adjusted) for the full 2019 fiscal year. Total net sales are expected to decrease 2% to 4% for fiscal 2020. Adjusted earnings per share are expected to be $0.10 to $0.14 compared to Adjusted Diluted Earnings per Share of $0.06 for the full fiscal 2019 year. Adjusted Diluted Earnings per Share excludes the impact of non-cash impairment charges and other non-recurring expenses incurred in fiscal 2019.

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