NEW YORK — J. Jill reported a fracture occurred in its fourth-quarter profits as sales productivity for the women’s apparel specialty retailer was down across both business segments.
This story first appeared in the February 13, 2003 issue of WWD. Subscribe Today.
The Quincy, Mass.-based firm said for the three months ended Dec. 28, profits slid 11.9 percent to $6.2 million, or 30 cents a diluted share, compared with profits of $7 million, or 37 cents, in the year-ago quarter. Earnings were reduced by an aftertax asset impairment charge of $340,000, or 2 cents a share. Sales for the quarter increased 17.6 percent to $107.9 million from $91.7 million.
On Dec. 5, Jill warned it was reducing its fourth-quarter earnings per share outlook to between 25 and 30 cents. At the time, Wall Street expected EPS of 42 cents.
Catalog productivity declined 17 percent due to factors that included the disappointing results of the fall bestseller catalog and a lower percentage of off-price sales. Retail sales per square foot declined by 13 percent as a result of a lower percentage of off-price sales and lower in-store inventory levels.
While disappointed with the loss of momentum, Gordon Cooke, Jill’s president and chief executive, said the company continues to make significant progress toward further building the small chain into a national lifestyle brand.
For the fiscal 2002 year, income increased 43.9 percent to $18.9 million, or 94 cents a diluted share, versus $13.1 million, or 70 cents in 2001. Sales increased by 21.1 percent to $347.6 million compared with $287 million.
“Within the retail segment we opened 37 new retail stores during the year and ended the year with 88 retail stores in 30 states,” Cooke said, noting sales in the retail segment grew by 68 percent to $128 million. Retail now represents 37 percent of its total business versus 27 percent last year. The direct segment also grew, generating sales of $221 million, or 4 percent more than last year’s $212 million.
For the current year, the company said it is targeting diluted EPS to increase 10 percent and sales to grow 20 percent. For the first quarter, it is targeting EPS to range between 3 and 5 cents and sales between $83 million and $85 million. It plans to open 35 to 40 new stores in 2003, with 22 leases already secured.