NEW YORK — Experiencing growing pains as it expands from being a direct retailer, The J. Jill Group reported double-digit dips to its fourth-quarter and year-end bottom lines.
The Quincy, Mass.-based company said late Monday that profits for the three months ended Dec. 27 tumbled 48.6 percent to $3.2 million, or 16 cents a diluted share. Last year, the firm posted profits of $6.2 million, or 30 cents. However, the retailer said a pickup in holiday sales allowed it to beat its previous forecast of 9 cents to 14 cents, as well as consensus estimates of 11 cents, according to First Call.
Sales for the quarter advanced 6.5 percent to $114.9 million from $107.9 million. Retail sales fell 16 percent to $52.9 million from $63 million, while catalogue sales retreated 20.8 percent to $33.6 million from $42.5 million, and e-commerce sales slipped 6.3 percent to $19.3 million from $20.5 million.
Maintaining that the growth of its retail business was creating significant complexities, Gordon Cooke, president and chief executive, said the company is committed to making significant investments in both personnel and its operations. Areas of investment include the company’s operating infrastructure, product management, sourcing, technical design and merchandising.
“We believe that these investments will allow us to fundamentally change the way we source and develop product, how we flow product, how we present product and the product itself,” Cooke said.
The firm has made many executive moves, including reorganizing its product area under Steve Pearson, its executive vice president of merchandising and product development.
Cooke said he believes the company is on target with meeting its product development and merchandising goals, but that “most of the changes we are working on will not be evident in our merchandise assortment until late in fiscal 2004.”
Management reaffirmed its previous financial targets, telling Wall Street that for fiscal 2004, earnings are expected to range between 30 cents and 35 cents, which is above current analysts’ expectations of 29 cents, while sales are expected to range between $415 million and $420 million. For the first quarter, the retailer is expecting a loss between 15 cents and 20 cents, in line with current analysts’ forecasts of 17 cents. Sales are expected to be in the range of $87 million to $92 million.For the year-end period, earnings collapsed 62 percent to $7.2 million, or 36 cents, compared with earnings of $18.9 million, or 94 cents, reported in 2002, while sales rose 8.4 percent to $376.9 million from $347.6 million.
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