Total company comparable sales, which includes comparable store and direct to consumer sales, decreased by 0.8 per cent YoY and were negatively impacted by approximately 50 basis points (bps) due to hurricane-related disruptions in Q3. The direct to consumer (DTC) net sales, which represented 45.7 per cent of net sales, were up 0.3 per cent YoY, J.Jill said in a press release.
Selling, general, and administrative (SG&A) expenses were $88.6 million compared to $86.5 million in Q3 FY23. Excluding non-recurring items from both periods, SG&A as a percentage of total net sales was 58.4 per cent compared to 57.7 per cent in Q3 FY23.
The company's operating income was $19.2 million, compared to $22.1 million in Q3 FY23. Operating income margin for Q3 FY24 was 12.7 per cent compared to 14.7 per cent in Q3 FY23. Adjusted income from operations was $21.4 million compared to $22.5 million in Q3 FY23. Interest expense was $2.8 million compared to $6.5 million in Q3 FY23. Interest income was $0.5 million compared to $0.7 million.
The company recorded an income tax provision of $4.5 million compared to $4.7 million in Q3 FY23 and the effective tax rate was 26.8 per cent compared to 28.9 per cent in the Q3 FY23. The net income was $12.3 million compared to $11.6 million in Q3 FY23.
Net income per diluted share was $0.80 and adjusted net income per diluted share was $0.89. Adjusted EBITDA stood at $26.8 million compared to $28.6 million in Q3 FY23, and adjusted EBITDA margin was 17.7 per cent compared to 18.9 per cent in Q3 FY23.
The American brand opened three new stores, reopened one store that was temporarily closed for relocation in the second quarter of FY24 and temporarily closed one store due to hurricane damage, which has an uncertain reopening date. The store count at the end of the quarter is 247 stores, said the release.
“We delivered third quarter results in line with our expectations as we continued to execute the disciplined operating model yielding another quarter of healthy overall margin performance. While our customer has remained selective with her purchasing behaviour and we have not yet seen the robust return to full price selling we saw earlier this year, we are maintaining our commitment to providing her the product, value and shopping experience she expects and appreciates from J.Jill. As we look ahead, we remain steadfast in our operating principles and continue to invest in strategic initiatives such as systems and new stores that we believe will enhance the omni-channel experience and broaden our reach longer-term. In addition to continuing to invest in the business, we are also pleased to further expand our total shareholder return strategy to include a new share repurchase program further underscoring our confidence in the business and the long-term opportunities that remain in front of us,” said Claire Spofford, president and chief executive officer (CEO) of J.Jill, Inc.
Nine-month (9M) financials
Net sales for the 9 months period increased 2.2 per cent to $468.0 million compared to $457.8 million. Total company comparable sales increased by 1.4 per cent YoY. DTC net sales, which represented 46.6 per cent of net sales, were up 5.1 per cent YoY.
The gross profit in 9M was $335.1 million compared to $329.3 million in the same period of prior fiscal. The gross margin of the company was 71.6 per cent compared to 71.9 per cent. SG&A was $264.1 million compared to $253.7 million in 9M FY23. Excluding non-recurring items from both periods, SG&A as a percentage of total net sales was 56.4 per cent compared to 55.6 per cent YoY.
Operating income was $70.6 million compared to $75.6 million in 9M FY23. The operating income margin was 15.1 per cent compared to 16.5 per cent YoY. Adjusted income from operations was $75.9 million compared to $77.8 million for 9M FY23.
Interest expense was $13.0 million compared to $19.8 million, while interest income was $2.0 million compared to $1.8 million. The company recorded an income tax provision of $13.8 million compared to $13.3 million and the effective tax rate was 27.1 per cent compared to 29.8 per cent. The net income was $37.2 million compared to $31.4 million in 9M FY23.
Net income per diluted share of J.Jill was $2.48 compared to $2.19 in 9M FY23. Adjusted net income per diluted share was $3.15 compared to $3.00. Adjusted EBITDA was $92.6 million compared to $95.1 million. Adjusted EBITDA margin was 19.8 per cent compared to 20.8 per cent.
Outlook
For the fourth quarter (Q4) of FY24, J.Jill, Inc expects net sales to be down 4-6 per cent compared to Q4 FY23. The company expects total company comparable sales to be up 1 to 3 per cent and expects adjusted EBITDA to be in the range of $12.0-$14.0 million in Q4 FY24.
For full FY24, the company expects net sales to be about flat to up 1 per cent compared to FY23, total company comparable sales to be up 1-2 per cent and adjusted EBITDA to be in the range of $105.0-$107.0 million, reflecting a year-over-year decline of 5-7 per cent.
Fibre2Fashion News Desk (SG)