J.Jill, Inc. Q4 FY2025 earnings call

2025 marked the start of a strategic evolution for JGL. Key pillars include evolving the product (testing categories, localized merchandising, summer 2026 assortment to have more newness in silhouettes, fabrics, accessories), enhancing the customer journey (rebalancing marketing to address top of funnel), and operational improvement (implemented new OMS system, created Chief Growth Officer role, kicking off Anaplan merchandise planning and allocation tool project). Strengthened leadership bench by recruiting talent like Chief Merchandising Officer and Chief Growth Officer.

In fiscal 2025, JGL generated $23.2 million in free cash flow, had a gross margin rate of 68.7%, adjusted EBITDA of $84.3 million on sales of $596.5 million. Fourth quarter 2025 total company sales were $138.4 million, down 3.1% y-o-y. Comparable sales decreased 4.8%. Gross profit was $87.3 million, gross margin 63.1%. SG&A expenses were about $87 million. Adjusted EBITDA was $7.2 million. Interest expense was $2.2 million. Adjusted net income per diluted share was a loss of two cents per share. End of Q4 inventory was up 14% y-o-y. Opened seven stores in Q4, ended 2025 with 256 stores (net increase of four).

Fiscal 2026 expected sales down 5 - 7% in Q1, comp sales down 7 - 9% in Q1. Adjusted EBITDA range $15 - $17 million in Q1. Full year 2026 sales expected down 2% to flat, comp sales down 3% to down 1%, adjusted EBITDA 70 - $75 million. Expect gross margins down about 50 basis points. Unit purchases down mid single digits. Expect to grow net store count by about five stores by end of 2026. Capital expenditures expected $25 million. Free cash flow about $20 million. Board approved nine cent dividend, $14 million remaining on share repurchase program.

Risks include continued consumer price sensitivity, impact of tariffs with changing rates, uncertainty in consumer and geopolitical environment, and the time it will take for new customers to respond to evolving product assortments.

Q: Your customers are more sensitive to macro. How would you assess how much of the softness you're seeing in the first quarter is due to macro versus other factors?

A: Q1 had a challenging start amidst a tough macro backdrop, more impact in direct channel, but stores with talented teams engaging customers.

Q: How will this year's Mother's Day differ from last year?

A: Marketing team has exciting initiatives, focused on catalog and digital marketing launch timing, backed by product drop 10 days before.

Q: What is changing in the product assortment?

A: Moving to more modern aesthetic, focusing on newness and versatile wardrobing pieces for new and existing customers.

Q: What is different this year versus last year that gives confidence in back half inflection?

A: Incredibly talented team aligned on vision, product improvements in Q2 - Q4, learnings from marketing initiatives, and structural component of tariffs supporting back half.

Q: Which categories performed well in Q4 and Q1?

A: Q4: newness, novelty, travel capsule, expanded outerwear, start of accessories, price points in sweaters. Q1: newness resounding, retail channel working, dress business turnaround.