NEW YORK — J. Jill’s second-quarter profits came up big, but it’s got its mind on petites as it begins the second half of the year.
After reporting that quarterly profits more than doubled and sped past analysts’ estimates, J. Jill president and chief executive officer Gordon Cooke said the firm will experiment with slightly smaller stores and with separate entrances to its petite areas.
Cooke said the Quincy, Mass.-based specialty retailer is modifying its retail expansion strategy slightly to enhance the efficiency of stores by moderately decreasing the average square footage of new stores to between 4,200 and 4,500 square feet from 4,700 to 4,900.
In addition, he said in March that the firm will begin testing the idea of separate entrances to its petite areas in a new store in San Francisco.
Currently, 25 of J. Jill’s 68 stores have a section dedicated to petites, and these areas ring up stronger sales than stores in which petites are integrated into the overall mix. Cooke said that, with twice the number of stockkeeping units in these petite-only areas, Jill is generating three times the amount of sales.
The new design will not have a separate name and Cooke said he is uncertain of how new signage will be executed. The petite and nonpetite sections will be connected to allow customers to cross-shop between the two.
In the quarter ended June 29, full-price selling and lower promotional activities allowed Jill’s profits to skyrocket 148.7 percent to $6.4 million, or 32 cents a diluted share, versus income of $2.6 million, or 14 cents, in the previous year’s quarter. Jill said in April that it was targeting earnings per share to range between 26 and 28 cents, prompting Wall Street analysts to raise consensus estimates to 29 cents.
Net sales for the quarter increased 30.5 percent to $86.4 million from the $66.2 million reported in the prior year’s quarter.
Gross margin as a percentage of sales improved 860 basis points to 41 percent from 32.4 percent last year. Results have been adjusted to reflect the 3-for-2 stock split announced June 4 and paid on June 28.
Noting that “the positive momentum from the first quarter has carried into this quarter with record second-quarter net sales and operating margins,” Cooke said, “our full-price spring and summer merchandise continued to be well received, which, combined with low levels of promotional activity, resulted in the most profitable second quarter in our company’s history.”
This story first appeared in the July 26, 2002 issue of WWD. Subscribe Today.
In addition, Cooke noted Jill’s inventory was 25 percent below last year’s mark due to conservative ordering and purchasing closer to need.The specialty retailer — which caters to women 35 and over — has continued to roll out new stores with 17 new doors year-to-date, bringing the total count to 68. It said between now and Thanksgiving, it plans to open an additional 19. Cooke said store performance remains strong as the retail channel now represents 35 percent of total business in the quarter, up from 24 percent, as sales increased by 90 percent.
Looking forward to the second half, Jill said it expects third-quarter EPS to range between 17 and 18 cents on sales of $76 million to $79 million. For the fourth quarter, it said it is targeting EPS of 41 to 43 cents and sales to be between $106 million and $110 million. For the year, the company is anticipating EPS of between $1.04 and $1.07 and sales of $342 million to $349 million.
For the first half of the year, income more than doubled to $9.1 million, or 46 cents a diluted share, versus last year’s income of $3.4 million, or 18 cents. Sales expanded to $159.7 million, a 23.3 percent increase over last year’s sales of $129.5 million.”