Shares of J. Jill Inc. jumped 10.8 percent in early-morning trading after the company posted a rise in both net income and net sales for the first quarter.
For the three months ended April 29, net income rose 32.2 percent to $8.0 million, or 18 cents a diluted share, from $6.1 million, or 14 cents, a year ago. Adjusted diluted EPS, after excluding net non-recurring expenses, were24 cents versus 16 cents in the year-ago quarter. Net sales rose 12.5 percent to $166.1 million from $147.7 million. The company said comparable store sales, which include direct to consumer comps, rose by 9.9 percent. Direct to consumer net sales represented 42.6 percent of total net sales, up from 40.7 percent in the year-ago quarter.
The shares were trading at $12.49 at 10:17 a.m.
Paula Bennett, president and chief executive officer, said, “We are pleased with our start to the year and our ability to consistently capitalize on the strengths of our omni-channel data-driven business model.”
She added that the J. Jill team is “hyper-focused on our customer — who she is, what she wants and what is relevant to her. With this always in mind, we will continue to delight her with the product assortment and omni-channel shopping experience that brings her to J. Jill and builds the great loyalty she has with our brand.”
For the second quarter, the company guided GAAP diluted EPS to between 26 cents and 28 cents, and between 27 cents to 29 cents on an adjusted basis.
For the full 2017 fiscal year, the company said it expects GAAP diluted earnings in the range of 72 cents to 76 cents, and between 80 cents to 84 cents on an adjusted basis.
The company completed its initial public offering earlier this year.
During the conference call to Wall Street analysts, Bennett described the quarter as one that “demonstrates once again our proven ability to add new customers to our file, retain existing customers and increase the spending of all segments.”
She went on to tell analysts that the company knows “how to bring even more women into our brand, and we retain our customers for an average of seven years. On top of earning her loyalty, we also have the opportunity to move her from a single to a multi-channel customer, which increases her spend with our brand by an average of three times.” Bennett also said that newness was an important driver, noting that the company brings in new collections every four weeks.
She added that the company grew its active customer file by 11 percent in 2016, and in the first quarter the company continued this growth by applying “our focused marketing strategy to acquire the 40-to-65 year old women with an average household income of over $150,000.” Bennett also said the return is seven times what it costs to invest in a customer. The ceo also spoke about using data analytics, noting that through it customer files it has matched 97 percent of all transactions to a specific customer. That information on purchase history has given J. Jill a “wealth of knowledge” about the customer and what she wants to enable the company to plan and better predict purchase behaviors across its channels. And she said that the J. Jill stores are a “very important component of our overall strategy and are also very profitable.”
Jefferies analyst Randal J. Konik has a “Buy” rating on shares of J. Jill. He said the retailer “delivered an impressive quarter that showed its omni-channel model and data-driven decision making are viable strategies in this evolving retail environment. With peers plagued by traffic declines and store closures ahead, we expect [J. Jill] to outperform as it grows its active customer file and increases the mix of omni customers.”