Byline: Jennifer Weitzman

NEW YORK — The strength of full-price selling across all distribution channels got J. Jill Group’s fiscal year off to a strong start, allowing the women’s apparel retailer to report first-quarter profits that more than tripled and raise its forecast for the full year.
For the quarter ended March 30, Jill said Thursday profits skyrocketed to $2.7 million, or 21 cents a diluted share, ahead of Wall Street’s 17-cent consensus and its own projection of 8 to 10 cents. In last year’s quarter, Jill reported net income of $796,000, or 7 cents. Sales soared 15.8 percent to $73.4 million from $63.3 million. Gross margin as a percentage of net sales improved to 34.7 percent from 30.1 percent in the year-ago period. The Quincy, Mass.-based firm’s shares moved up 47 cents, or 1.5 percent, to close at $31 in Nasdaq trading Thursday, just missing in intraday trading the 52-week high of $33.20 set on April 12.
Expressing satisfaction with record sales, margins and earnings per share on top of record results for the last two fiscal years, Gordon Cooke, president and chief executive, said in a telephone interview that a quick transition into spring and summer elevated Jill’s bottom line: “We did not have excess merchandise going into the season, which allowed us to beat the competition. The mix of product was significantly more full-priced than off-priced.”
With stocks clean and orders placed conservatively and closer to need, inventories were 28 percent lower at the end of the quarter than they were a year ago.
Jill’s Take Five loyalty program, which began last August, also generated sales, he noted. Membership at the end of the quarter was 96,000 from 46,000 at the end of last year. It said it expects to have 200,000 at the end of the current year.
Retail sales more than doubled over prior-year levels, rising to 31 percent of sales from 17 a year ago, as a result of the company’s retail store rollout. During the quarter, Jill opened four new retail stores, bringing the total store count to 55. It plans to open an additional 30 to 35 stores by the end of the year. As expected, J. Jill direct-channel sales decreased by $1.8 million to $51.2 million, mainly as a result of lower promotional activity compared with the prior year.
“I believe the company’s financial performance validates our multichannel distribution strategy and appropriately positions the J. Jill brand for continued significant and sustainable growth,” Cooke said in a statement.
Looking forward, for the second quarter, the company said it is targeting EPS to range between 26 and 28 cents, versus the consensus estimate of 24 cents and year-ago results of 21 cents. Sales are slated at between $81 million and $83 million. For the year, Jill said it is now forecasting EPS ranging from $1.32 to $1.37, compared with the prior year’s $1.05, and sales to increase between 15 and 20 percent over 2001 levels.

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