Exhibit 99.1
FOR IMMEDIATE RELEASE Approved by: Olga L. Conley
- --------------------- Chief Financial Officer
(617) 376-4300
URL: http://www.jjill.com
Contact: Investor Relations:
Suzanne Rosenberg/
Priya Akhoury
Press: Michael McMullan/
Kate Talbot
Morgen-Walke Associates, Inc.
(212) 850-5600
THE J. JILL GROUP REPORTS RECORD SETTING FISCAL 2000 RESULTS
COMPANY ACHIEVES 4TH QUARTER EPS OF $0.63 ON 44.4% NET SALES INCREASE
QUINCY, MA, FEBRUARY 26, 2001 - THE J. JILL GROUP, INC. (NASDAQ: JILL)
today reported financial results for the fourth quarter and fiscal year
ended December 30, 2000. Net sales for the fourth quarter increased by
44.4% to $88.4 million from $61.2 million reported in the prior year.
Operating income for the quarter totaled $12.0 million or 13.6% of net
sales compared to a loss from operations of $2.1 million last year. Net
income for the period was $6.7 million or $0.63 per diluted share versus a
net loss of $1.5 million or $0.15 per share in the comparable period last
year. During the fourth quarter ended December 25, 1999 J. Jill recorded
special charges totaling $711,000 primarily associated with its decision to
shutdown its Nicole Summers catalog concept.
Gross margin for the fourth quarter improved to 36.0% compared to last
year's 32.2% (last year's number has been adjusted to exclude special
markdown charges totaling $711,000 or 1.2%) primarily as a result of
productivity improvements achieved in J. Jill's operations and fulfillment
facility, as well as the leveraging of fixed costs.
Selling, general and administrative expenses as a percentage of net sales
improved dramatically to 22.4% this year from 34.4% last year. This
improvement is attributable primarily to better productivity per catalog
mailed and to a lesser extent, general and administrative expense leverage.
For the fiscal year ended December 30, 2000 J. Jill recorded net sales of
$246.3 million compared to $250.3 million in the prior year. Operating
income for the twelve-month period was $23.4 million or 9.5% of net sales
compared to $538,000 in the prior year. Net income for the period was $12.8
million or $1.23 per diluted share versus a loss of $684,000 or $0.07 per
share in the comparable period last year.
Gordon R. Cooke, President and Chief Executive Officer, commented, "Not
only was the fourth quarter of fiscal 2000 record-setting in terms of net
sales, operating margin and earnings per share but it also completed a
tremendously successful fiscal year for the J. Jill Group. It is
particularly gratifying that these results were achieved while we were
making significant investments in our retail store rollout and our
e-commerce website."
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"We opened 20 J. Jill stores in fiscal 2000, bringing our total store count
to 22 by year-end. Given the sales these stores generated during fiscal
2000, we believe that the sales per square foot of our stores exceeded mall
averages and were competitive with other well-known specialty retailers.
E-commerce sales totaled $35.0 million, a 510% increase over 1999 and
represented 16.0% of our total direct channel volume.
In addition, excluding sales from Nicole Summers, fiscal 2000 J. Jill
direct channel net sales totaled $217.9 million virtually equal to the
prior year - a significant accomplishment considering we reduced circulated
square inches by 18%," Mr. Cooke continued.
Year-end inventory balances increased by 74.5% to $37.9 million at December
30, 2000 due to the earlier timing of spring season receipts and the need
to carry inventory to support 22 stores this year versus only 2 last year.
Other current assets increased to $10.4 million or 75.6% as a result of
increased receivables from the Holiday 2000 deferred billing promotion and
landlord allowances receivable. Property and equipment balances increased
by 38.7% to $65.2 million as a result of investments made in the retail
rollout and the new corporate headquarters. Accounts payable and accrued
expenses grew by 48.5% to $34.6 million primarily as a result of the
increased inventory position, increased accruals related to the retail
expansion and accrued income taxes.
Regarding the J. Jill Group's future financial performance, Mr. Cooke
commented, "Our first three catalog mailings for the Spring season all
exceeded internal sales projections. This past week, however, we saw our
first indication of a slowdown in customer demand. It is far too early,
however, to predict whether this slowdown will continue or what impact it
may have on our overall business. We believe our current merchandise
assortment, inventory management, creative presentation, and operational
execution are consistent with the standards established during the past
year when we achieved an outstanding sales and profit performance. It is
unclear, however, to what extent declining consumer confidence and economic
uncertainty will impact the entire retail sector including J. Jill."
The company is maintaining its 2001 fiscal year financial targets
previously announced on October 31, 2000, but due to the current economic
environment and lack of visibility to the remainder of the year, is
providing quarterly guidance for only the first quarter of fiscal 2001.
For the first quarter of fiscal 2001, the company expects net sales to
increase by 28% to 30% over the prior year's comparable quarter and
earnings per diluted share to be between $0.04 and $0.06 based on projected
weighted average shares outstanding of 12.2 million this year versus 10.2
million last year.
These are J. Jill's targets, not predictions of actual performance.
Historically, J. Jill's performance has deviated, often materially, from
its targets. These statements do not include the potential of any business
risks, opportunities or developments that may occur after February 26,
2001. J. Jill does not expect to report on its progress during the quarter,
or comment on it to analysts or investors, until after it has closed the
books on the quarter and appropriately disclosed the results.
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"We remain committed to the multi-channel combination of "mail, mall and
web", which we believe is the most powerful formula in specialty retailing
today. Going forward, we will continue to emphasize profitability in our
"direct" business, which includes our catalogs and e-commerce website,
while striving to maintain the size of this channel. We intend to rely
primarily on our retail channel for our future growth. Currently, we have
23 stores open, including the new Burlington, Massachusetts store that
opened on February 15, 2001. Our plans for fiscal 2001 call for opening an
additional 24 stores and we have already committed to 17 locations.
Importantly, the incremental funding from the recently completed private
placement provides the company with the financial power to fuel an
aggressive top-line growth plan in the years ahead," concluded Mr. Cooke.
The J. Jill Group's conference call to discuss fourth quarter and fiscal
2000 earnings will be broadcast live today at 10:00 a.m. Eastern Time at
www.vcall.com and www.jjillgroup.com, and will be archived online within
one hour of the completion of the conference call. This archive will be
available for 48 hours.
The J. Jill Group is a leading retailer of high quality women's apparel,
accessories and footwear. The company currently markets its products
through its specialty retail stores, catalogs, and e-commerce website. J.
JILL is designed to appeal to active, affluent women age 35 and older.
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THIS PRESS RELEASE CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS WITHIN THE
MEANING OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. VARIOUS FACTORS COULD CAUSE THE RESULTS OF
THE J. JILL GROUP TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS
EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. SUCH FACTORS
INCLUDE, BUT ARE NOT LIMITED TO THE FOLLOWING: THE CONTINUED SUCCESS OR
POSSIBLE FUTURE FAILURE OF THE RETAIL STORE INITIATIVE; THE ABILITY OF J.
JILL TO EFFECTIVELY MANAGE ITS OPERATIONS AND GROWTH IN A MULTIPLE
DISTRIBUTION CHANNEL ENVIRONMENT; THE AVAILABILITY, TERMS AND DEPLOYMENT OF
CAPITAL; SIGNIFICANT CHANGES IN CUSTOMER ACCEPTANCE OF J. JILL'S PRODUCT
OFFERINGS; CHANGES IN COMPETITION IN THE APPAREL INDUSTRY; CHANGES IN
CONSUMER SPENDING, FASHION TRENDS AND CONSUMER PREFERENCES; CHANGES IN, OR
THE FAILURE TO COMPLY WITH, FEDERAL AND STATE TAX AND OTHER GOVERNMENT
REGULATIONS; THE CUSTOMARY RISKS OF PURCHASING MERCHANDISE ABROAD,
INCLUDING LONGER LEAD TIMES, HIGHER INITIAL PURCHASE COMMITMENTS AND
FOREIGN CURRENCY FLUCTUATIONS; POSSIBLE FUTURE INCREASES IN EXPENSES AND
LABOR AND EMPLOYEE BENEFIT COSTS; THE ABILITY OF J. JILL TO ATTRACT AND
RETAIN QUALIFIED PERSONNEL; BUSINESS ABILITIES AND JUDGMENT OF MANAGEMENT;
THE EXISTENCE OR ABSENCE OF BRAND AWARENESS; THE EXISTENCE OR ABSENCE OF
PUBLICITY, ADVERTISING AND PROMOTIONAL EFFORTS; THE SUCCESS OR FAILURE OF
OPERATING INITIATIVES; THE MIX OF J. JILL'S SALES BETWEEN FULL PRICE AND
LIQUIDATION MERCHANDISE; GENERAL ECONOMIC AND BUSINESS CONDITIONS AND OTHER
FACTORS, INCLUDING THOSE DETAILED FROM TIME TO TIME IN J. JILL'S SEC
REPORTS, INCLUDING ITS CURRENT REPORT ON FORM 8-K FILED ON JANUARY 16, 2001
J. JILL DISCLAIMS ANY INTENT OR OBLIGATION TO UPDATE THESE FORWARD-LOOKING
STATEMENTS.
(TABLES TO FOLLOW)
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THE J. JILL GROUP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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THREE MONTHS ENDED TWELVE MONTHS ENDED
(UNAUDITED)
IN THOUSANDS, EXCEPT PER SHARE DATA DEC. 30,2000 DEC. 25, 1999 DEC. 30, 2000 DEC. 25, 1999
- ------------------------------------ ------------ ------------- ------------- -------------
Net sales $88,372 $61,198 $246,309 $250,281
Cost of products and merchandising 56,597 41,509 160,819 169,186
Special markdowns -- 711 -- 2,359
Selling, general and administrative expenses 19,781 21,052 62,084 74,570
Special charges -- -- -- 3,628
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Operating income (loss) 11,994 (2,074) 23,406 538
Interest expense, net 456 447 1,387 1,622
Provision for (benefit from) income taxes 4,845 (975) 9,195 (400)
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Net income (loss) before cumulative effect 6,693 (1,546) 12,824 (684)
Cumulative effect of accounting change -- -- (65) --
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Net income (loss) $6,693 ($1,546) $12,759 ($684)
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EARNINGS PER SHARE -- BEFORE SPECIAL CHARGES:
Basic earnings (loss) per share $0.66 ($0.11) $1.27 $0.31
Weighted average shares outstanding 10,065 9,990 10,031 9,879
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Diluted earnings (loss) per share $0.63 ($0.11) $1.23 $0.30
Weighted average shares outstanding 10,612 9,990 10,388 10,473
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EARNINGS PER SHARE:
Basic earnings (loss) per share $0.66 ($0.15) $1.27 ($0.07)
Weighted average shares outstanding 10,065 9,990 10,031 9,879
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Diluted earnings (loss) per share $0.63 ($0.15) $1.23 ($0.07)
Weighted average shares outstanding 10,612 9,990 10,388 9,879
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THE J. JILL GROUP
NET SALES SUMMARY
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THREE MONTHS ENDED TWELVE MONTHS ENDED
IN THOUSANDS - UNAUDITED DEC. 30, 2000 DEC. 25, 1999 DEC. 30, 2000 DEC. 25, 1999
- ------------------------ ------------- ------------- ------------- -------------
J. Jill direct $72,095 $56,450 $217,920 $217,530
J. Jill retail 16,773 954 28,308 954
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J. Jill total 88,868 57,404 246,228 218,484
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Nicole Summers 141 4,170 1,524 33,724
Other (637) (376) (1,443) (1,927)
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Total net sales $88,372 $61,198 $246,309 $250,281
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THE J. JILL GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
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IN THOUSANDS DEC, 30, 2000 DEC. 25, 1999
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ASSETS:
Cash and cash equivalents $2,001 $5,948
Assets held for sale -- 2,313
Inventory 37,874 21,705
Prepaid catalog expenses 4,116 3,963
Deferred income taxes 7,455 10,083
Other current assets 10,430 5,940
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Total current assets 61,876 49,952
Property and equipment 65,194 46,995
Deferred income taxes 1,702 3,065
Other non-current assets 1,365 1,347
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Total assets 130,137 101,359
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LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses 34,550 23,262
Current portion of long-term debt 4,010 3,137
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Total current liabilities 38,560 26,399
Long-term debt 17,375 19,098
Other non-current liabilities 4,960 --
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Total liabilities 60,895 45,497
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Capital stock 63,620 62,999
Accumulated earnings (deficit) 5,622 (7,137)
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Total stockholders' equity 69,242 55,862
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Total liabilities and stockholders' equity $130,137 $101,359
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THE J. JILL GROUP
STORE LISTING LOCATION OPENING DATE
Natick Mall Boston, MA November 1999
Providence Place Providence, RI December 1999
Water Tower Chicago, IL April 2000
Mall of America Minneapolis, MN April 2000
Pacific Place Seattle, WA April 2000
The Westchester White Plains, NY May 2000
Tysons Corner McLean, VA June 2000
Flatiron Crossing Denver, CO August 2000
Galleria @ Roseville Sacramento, CA August 2000
Ridgedale Center Minneapolis, MN August 2000
Old Orchard Chicago, IL September 2000
Pioneer Place Portland, OR September 2000
Southpark Mall Charlotte, NC September 2000
Walt Whitman Long Island, NY October 2000
Sommerset Collection Detroit, MI October 2000
Riverchase Galleria Birmingham, AL October 2000
Main Place Santa Ana, CA October 2000
Walden Galleria Buffalo, NY November 2000
Town Center Boca Raton Boca Raton, FL November 2000
Perimeter Mall Atlanta, GA November 2000
South Shore Plaza Boston, MA November 2000
Crabtree Valley Raleigh, NC November 2000
Burlington Mall Boston, MA February 2001
FISCAL 2001 PROPOSED LOCATIONS:
Cherry Creek Denver, CO Spring 2001
Topanga Plaza Los Angeles, CA Spring 2001
Tucson Mall Tucson, AZ Spring 2001
San Francisco Center San Francisco, CA Spring 2001
Plaza Frontenac St. Louis, MO Spring 2001
Freehold Mall Freehold, NJ Spring 2001
Glendale Galleria Los Angeles, CA Spring 2001
Willow Bend Dallas, TX Fall 2001
Mall at Green Hills Nashville, TN Fall 2001
Paseo Colorado Pasadena, CA Fall 2001
Polaris Fashion Place Columbus, OH Fall 2001
Aspen Grove Denver, CO Fall 2001
Willowbrook Mall Willowbrook, NJ Fall 2001
The Gateway Salt Lake City, UT Fall 2001
Sherman Oaks Los Angeles, CA Fall 2001
Chandler Fashion Center Chandler, AZ Fall 2001
Kierland Commons Scottsdale, AZ Fall 2001
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