JILL - Earnings call 3 2024

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Operator

Good morning. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to the J.Jill Third Quarter 2023 Earnings Conference Call. On today's call are Claire Spofford, President and Chief Executive Officer; and Mark Webb, Executive Vice President, Chief Financial Officer and Chief Operating Officer.

[Operator Instructions] Before we begin, I need to remind you that certain comments made during these remarks may constitute forward-looking statements and are made pursuant to and within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 as amended.

Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from such statements. are the uncertainties J.Jill's release and filings. SEC risks described press in and Those made press and on this statements update forward-looking The this statements. as undertake obligation December these not forward-looking recording release of X, does XXXX, J.Jill any to are on --

refer adjusted release is measures J.Jill remarks. the financial press these December or available measures X, financial may Finally, reconciliation versus schedule non-GAAP non-GAAP during issued XXXX. A showing to certain the GAAP in

today's do press Relations call you of will not one have visiting you the Claire. jjill.com. I of by copy If obtain release, a at over to the may the page now Investor turn website

Claire Spofford

our hello, review more will before and will third Thank and everyone. to you, on I you then provide this begin an for operator, our few performance detail. initiatives outlook by joining strategic financial to update of discussion our over Mark morning. from quarter us our in a turning and performance Thank highlights call the reviewing

pleased deliver We particular quarter, to strong the operating us enabled with our earlier EBITDA saw solid our the by season. model, to reception strength product customer transitional as which expectations. our we continued in performance execution above We of and and supported disciplined are our fall adjusted sales third quarter our entered

in our we particular well as assortment to core by to This sweaters quarter, customer as loyal versatile, quarter, nice our appeal deliver third continued that base. growth the flow modern in Throughout collections that wovens. in and were strength highlighted product the drove

retail and the direct were we and full prior top delivered to saw price within channels, pleased we quarter. line well we sequential perform both result, a our improvement across As with compared the direct

direct. to of see continued file. on both across prior but customers everywhere growth of we're joy women strength celebrate QX, across As and totality in the our we particular and to assortment In we channels new-to-brand and our aspects their ease, fuel customer to build with momentum with not only journey have leveraging strength in discussed calls,

Wearever our than Our continuing average with new-to-brand target initiative support are are younger consistent customer, customers our but size and demographic. to our inclusivity of sub-brand acquisition who

During the which would successfully from wear across of comparison. Day despite launched and We the Labor initiative carry delivered last all year work size versatile launch quarter, customers our inclusivity we them extended could after growth Works the day. with Wearever pleased that pieces and were anniversaried selection, capsule sizes their third that and highlighted tougher our to throughout also

a quarter launch digital brand customer our compared have opportunities our these ahead, sequential fueling the to pleased the summer efforts, will look capsules are perspective marketing benefits channel well as avenue These an into the health we our to to we driven customer and continue strategies audiences. influencer and this awareness both we to as made our and successfully lean as from growth periodically the this file. Throughout leveraged as efficiencies along direct broadening helped the in to enhancements with we As for from giving customer top the earlier improvement support well exposure tactics experience online providing QX. new quarter, of with the line

actions fit the certain categories, While elevated in customer again believe with have seeing rates discerning particularly the Model we spend, from to return guide we been with impact Shop we're impact as have and the and can able for our mitigate become The find ensuring an we right her that fit taken features, her. has customer more understands the through updated by our partially

to to effectively elements and both investing with drive in factors, we order continue we in within our operate discipline order channels are external While we cannot control all in balanced control manage growth. all to

POS new this a efficient previously, already system in and experience which mentioned stores. a we is positive year, implemented more customer yielding As

omnichannel more summary, better-than-expected embarking enable we on operate look OMS with expect discipline, strong continue has capabilities. to we updating flow this this future. In also are which that supported will project an We forward results quarter We yielded initiative the generation. on and to important cash productive in you our

experience great loyal chooses have with whenever our a us. We shop to brand and we continuing enhance she across wonderful channels to to a are customer, with invest and our wherever

And we Friday say her spend customer see that with fourth Cyber is some her the over period. our Monday did pull continued to in as continued into but uncertainty. the later the the to mentioned, impervious resilient not of quarter, start We've quarter, strengthening which macro back Black I third promotional

we As historically the to year, achieve and well given believe profitability the smallest our from perspective, And remainder of a period year. while this a are sales prudent the the maintaining our differently positioned reminder, us a remain our survey objectives trends outlook retail customer of work, from fourth we our for positioning we peers. for recent quarter and many is current

I will to in call to detail. and our results Mark? more the outlook Mark now turn over review

Mark Webb

everyone. you, good morning, Claire, Thank and

show disciplined, the purposeful the of environment. especially model, Our strength benefits of results operating our amidst macro a again the J.Jill and dynamic brand

new the Sales above customers both and floor guided EBITDA quarter. sets, adjusted levels in responded actualized particularly to as well early

for sales compared of for once last disciplined company clean compared sales X.X% end again $XXX quarter was inventory to quarter company sales flow versus XXXX. QX levels. Total year's negative third the the strong and million, cash comp. QX in Store XXXX management resulted quarter quarter comparable for to X% inventory were about on were in increased addition, In X.X% flat stores. flat QX the Total fewer

by were lower the retails a fiscal channel unit sales as were representing by markdown X.X%, QX. units third a Direct sold sold. sales to to the XXXX, quarter. of sales in down per primarily improvement units fewer were direct of quarter in offset transaction percentage total average sequential the driven Compared Higher XX% compared

contributed. points was million QX up promotions QX costs versus and XXXX margin freight strong selling to compared all underlying first QX price $XXX full in QX as million, favorability basis total $X.X company gross gross cost and AUCs, profit XXX up was XXXX. lower XX.X%,

last $XX.X due to were lower EBITDA of in year increases wage $XX.X and amortization. press up Please million million selling costs compared QX a expenses in overhead, refer for adjusted $XX.X depreciation was in by $XX.X to offset million quarter, and reconciliation the today's SG&A EBITDA. partially X% XXXX. to inflation, Adjusted primarily million were general to as compared release

Turning to cash flow.

end of XXXX. with Third cash X% in generating X of cash operations another and against compared at ending to $XX QX were strong QX borrowings $XX quarter million down marked Inventories end from the of the ABL. million and quarter,

have supply result, disruption And chain the our in the first quarter, normalized. last are half of we now comparisons experienced mentioned XXXX. year-over-year anniversaried more As as a

end in year, inventories of That the impact we of said, expect higher week, reported week levels at we as that to forward we XXrd end the the the in-transit as goods look resulting shipped inventory the to year. spring

impact, to a of compared be expect result inventory last up As reported total end to this of year. we QX at the

expenditures XXX quarter million We neither about compared were $X with about and million opened the the in to quarter closed ended stores stores. Capital $X or last year.

to the third of pleased completed during our POS system We quarter. rollout are new the have

in broader now step with and in transactions The kicking legacy replace is OMS. or step new efficiency customer the The to project off plan of a line-busting upgrade fulfillment management enhance the that is first plan improve next add a omni capabilities store, in system will system, to mobile our enterprise and opportunities. order

train on OMS. on We capabilities to are the and of our continue to POS excited staff the new begin work

to that incredible and take a and moment want with team this make success. hard worked They the and a congratulate I dedication executed pride thank project POS replacement. to the professional

store So to IS, and thank the teams, congratulations. corporate you, and

Turning now to our outlook.

operate environment. dynamic to a continue in We

into quarter start before the of Friday As strengthening the end at fourth on elevated Claire Cyber carried levels Monday, promotion. mentioned, softness the the of that we saw somewhat at albeit Black of third quarter

to prudent outlook Given to this, with of the cautious approach respect for we our take year. a believe the remainder it's

quarter, to our full sales of outlook $XX EBITDA to in QX low versus be million the the fourth to be And compared last be year. single adjusted flat we $XX and down for For in digits year, range EBITDA we expect for million. to the to are maintaining adjusted XXXX approximately

million include from $X the the XXrd week. fourth year EBITDA As approximate full a quarter benefit reminder, and an adjusted

close count, the focused on in year we facilities full store $XX quarter count store we to capital, POS flat XXXX with and expect end X projects. stores and respect to about to to spend fourth investments Regarding still And with technology, OMS to and expect capital the year. last stores million

in operating opportunities to growth cash continue very generation, we on continue track to summary, shareholder operate positioning to returns. and and disciplined year profitable deliver the us of total another and model business strong to a well In flow evaluating drive investing remain

back to it I you, questions. will operator Thank hand now and the for

Operator

Riley first Jeff [Operator Lick from Instructions] from Your question B. comes Financial.

Jeffrey Lick

third third Guys, quarter referenced wrap of quarter. -- the was the bit the quarter, Congrats unpack at fourth there Friday obviously what nice that the could promotional wonder the work. and could into you on then with referenced just the you've wondering and kind but then a I into of you of you you -- Black the also little survey quarter, Friday I the quarter customer the Black end then learned observations if and third weakness fourth could a if pickup. quarter the end you Maybe seeing period? you're

Claire Spofford

mind intent to a did of how to of coming slowdown quarter of We least discernment our sort part which to understand the kind on macro of she's about where Sure. environment, things attributed more feeling at of customers general. do, survey Thanks, purchase customer. Jeff. out see pulse in the we this sort relative every do We just is QX,

there, And uncertainty. see level macro we concern given there a is is which the that understandable did of

see to softness we out that, pay QX. and we So did of attention coming

As continue to that trend. we see we entered QX,

see weekend, Black levels, promotions where the were those that, some we Black did moved macro do to their into continue as Friday powder of the held did not to Monday some see we softness over think unlike Cyber competitive initiating period we we promotional some her and our promotional coming into environment earlier, the -- did Friday level of QX promotions. on We the or respond I the people

that So our her And I guide the a obviously color, in we're quarter. continuing reflected bit little fourth more and watch is for that's cautiousness very behavior just think to carefully.

Jeffrey Lick

And then one Mark. for

you the the if QX imply talked would we guidance X where have that imply some also especially there and of for that. in your just you place getting might POS benefits now wrap about. from wondering if that's to could that's be with then and the there and just P&L in look With in comment of continue in X kind ago, guidance on that at OMS I was you gross room the -- anything shine your XQ place environment the years to gross -- less promotional relative it to would margins

Mark Webb

Sure, we in just and benefit another gross a Yes, QX. think of Jeff. operating we've gross drivers I freight were in the margin the hallmark the this are diminishing that to drivers margin, of strength and the be Thanks. though indicated continues model, year. QX, with The is freight, throughout pleased it in it the

So that benefit a benefit, will QX. of benefit a small of into -- a less be continue less to but

for we've We that first AUCs in. environment. that's starting to operating cotton the environment the price X last see price a we're selling promotional were benefit which bit of to with talked Then a full a about, and function go going late the cited lower underlying forward. be other on broke year, cost and that us come really tailwind really That as a cotton, drivers is we

start. that happy promotions. as bit continue deploy AUC of Claire we question, benefit needed that course end some into it with But if for played opportunity obviously, go your softer to to forward us was out to over response the QX, just a though, of how does the the in create mentioned the than Again, as

in the the expecting be cautious year And promotions. is certainly be the guide has with we're approach, time It's Black to environment. started mentioned the Cyber Monday, I and a think this and for as of it to we've promotional Friday

to we ready So stand do that.

OMS. you mentioned POS, then And

Sorry, do want to you follow up?

Jeffrey Lick

at And doing if could compare was who's to maybe I maybe is the what underappreciated. ask the ahead. all you Gap great go I be No, your in you then about had lessons also, done Yes. contrast some it that. here life would going this think previous of you're and because just

Mark Webb

it's gotten let Well, have deployed -- out to have is QX. the store a happy staff, roll super system, so in you the noticed new fleet full me customers the thing. The When OMS, new it POS, technology. a -- great

are a We still technology. learning new

that's So to going continue.

respect we of enhance with enable it really a does online the good to respect for it completes with the from in exchanges our and to respect feel the all the handoffs. And of transaction the that within capabilities existing and also get to customer benefits new with item store, we're experience returns, and We're POS by to with us technology improve to enhanced with and it marketplace years come. technology it, some of up is just those picture sort us to shipping on buying online, enterprise more for So opportunities with then to efficient an from to purchase a and making rollout. Excited of replacing streamline out omni more are it conversion and respect in store, looking the presents getting excited in is the the really that forward in an the take be of because purchase us for we initially that and good, right? follower to an and technology will in-store to an inventory all be aged OMS seamless operations help new store getting fast OMS the a drive store place that website, rest of things that underway. picking POS are those in enables then

Jeffrey Lick

Congrats great on quarter. the

Mark Webb

Jeff. Thanks,

Claire Spofford

Jeff. Thanks,

Operator

Your Lake from next Street Markets. Meyers Ryan question Capital comes from

Ryan Meyers

of me, for another obviously, really quarter cash flow one generation. First strong

your detail if going Just can wondering is us guys allocation on you with strategy provide some what forward? capital

Mark Webb

to to do us. to been feel for earlier result refinance feel that but paper were a Sure, good place year, so, in we market like was pretty lowered be We and got and this I We've tough super Ryan. piece with of debt tenor a our consistent. able good pleased like quantum

our to execute is of As model, generation that the we part cash a continue story. operating flow big

to business before about mentioned we cash POS over. with opportunity of us Claire it. drive for like cash And profitable there's in allows spoken it the and several still creates and systems OMS. to feel examples which her in remarks doing company, that and then that the enhance foundational the the And us growth. invest has of we're left And

more the this shareholder said how objective. obtain that So that I time to continue cash progresses, say would and to to evaluate what ultimate we than deploy that come total but best to on More of as we've that to is returns. on objective at point before our driving nothing imagine, other is

Ryan Meyers

customers Okay. of about that's the that then to this obviously, of of promotions? running talked environment. Have as we've customers promotional how that promotional QX spend from how environment. margin. sense. one lot this of has of push That you And more makes you A so sort QX, environment kind kind ran this seen in some you the month here going of had these of you have in to from Or some be seen respond increased this coming promotions far? Obviously,

Claire Spofford

to sales, room guide inventory reflected your our business our perspective. the driving of -- is are to brand the have objectives appropriately Yes. moving Obviously, in mentioned, Thanks, and to our through as we from We we more promote and order -- achieve Ryan. tries promote in to a we inventory that coming to. the we not of than want out a position an in

quarter. but tried quarter tow fourth so as to is a recognize very much And the as can, we that promotional the we line

and remarks, quarter our standpoint. it my top in smallest mentioned I from EBITDA As is a line also

while is pull about possible. and inventory but margin and for So feel year. profile rolled our objectives all of maintaining feel levers our we're to with achieve the our clean the about navigating. the we're been brand, managing the We're and need fourth extent we've way staying the the But that as always, we about navigating of our sales our that close great pulling to we those to just all -- feel and customer, great we're product into great quarter. And guide the business consistent position

Operator

Telsey Group. of line Telsey comes Dana next the from question from Your

Dana Telsey

the Good morning, progress. everyone, to and nice see

you you capturing As compared AUC? you've that as about to And saw their about you by some or category? the to Claire, responding rates lastly, going Pure compared the this the customer. saw the the the mentioned, in are how core that differing And does AUC anything or margin you the categories that opportunity Jill the wherever and the And of you the categories, forward, saw and think customer Anything quarter from customer on we where what side, collection how about look? then return talked of buying preferences on path core? younger gross young to

Claire Spofford

AUC I'll Dana, the it Sure. hand the X, I'll Mark latter over address question. to and then to answer

nice in our We standpoint, we saw growth from category a So a assortment. QX, there. in core saw really strength

nice I couple right nice refresh robust we in transitional fall a was of we that. In transition woven performed in pallet sub-brand response we we really as sweaters and saw star from sub-brand silhouette into color change well, the a of assortment print response and in got in August, a feel things, particular, to a from standpoint saw and quarter in all pattern this our think denim particularly particular, from and really and shining standpoint, some which saw a was where a nice where strength Wearever had wovens, a standpoint, which a we like a and very we tops in strength core had the a very well. From were to standpoint. saw product, strong,

nice say, attracting customers, for -- consistent usage still and know, our with target into I you been younger As occasion we've work our as Wearever demographic seeing but in traction the younger new, we've been for leaning customers. there

which that of we which more little bit ultimate more sophistication occasion, waist we was Works, a a price points. kind Day, of expression Post to and and refinement, at really Labor kind slightly higher usage really had nice little bit aimed Wearever interest the well. wear-to-work a that, saw and of as called A we capsule the response

that a continue So and will the into concept course that's we of and over capsule a quarters. to the coming lean months

on and Edit continue size us of avenues for were the were QX the customers that we and a younger customer to also Wear-to-Work on as inclusivity initiative little the in bit new-to-brand our size our the and customers lapped continued great really inclusivity both that file. that target as of of initiative versus side in And a be launch year, valuable last to acquisition see we to from well new-to-brand terms acquisition

all some in So our will that, as go we continue felt of that we we and traction into nice QX to initiatives forward. lean

Mark Webb

Dana, point respect tailwind would last the to and that with cotton. tailwind raw started mentioned It And a as the to really to to little bit previously, quarter. I go-forward AUCs, I is would related continue. I expect that it's materials And

pressures So are coming for continue half the on and are probably other maybe there, year, through et cetera. linen, crops from forward where next flax horizon first the of some that out

So model. crop have necessarily we're that that we're don't anymore watching to and business healthy We expect the overall, expand achieving I before But for them always rates that can to as us. pulls our cotton-based margin for us the business. on said for We've continue. tugs reports benefit AUC that a are very need

good talked us allow to do about, inception us those more that more we've opportunity as so while to risk with into And a view tailwinds a model, it's to carry go within which little comfortable in disciplined their inherently have the and comfort. operating an investments making for our bit -- those them bit

we're underlying thinking right that's the how AUCs now. So about

Dana Telsey

it. Got

drivers bit? as thoughts toe year down online, by or openings water your little beginning and And any this next dip thoughts store stores to the you're lastly, any what Just on in were the a channel quarter? breaking for

Mark Webb

a But growth. we said, return think be start we where of to where That's, the year about Dana, we're we've negotiations would and to with some We've much we our next dependent Sure. a can place of expect to some and like upon right store feel level returning course, getting successful deals. store landlords net the fleet to in through worked growth. that year of

and pleased in far the to some The that the As that we direct drive investments we and in quarter, Claire feel has one the channel remarks good to channels were her that about. channel see sequentially. improve as it's mentioned drivers, have had helped

a a drivers across differentials wasn't centers continue malls. better no there traffic stores, scale the on difference a geographies. then large lot real than lifestyle the perspective through to geographical And in The the the rest of The quarter. of perform from

Operator

this further that time. for now And may we that, have concludes And you you conference your disconnect. today's questions no in participation, queue at with and Thank call. our

J.Jill (JILL) 5 Dec 232024 Q3 Earnings call transcript