J. Jill CFO out amid turnaround
J. Jill last week announced that Chief Financial and Operating Officer Dave Biese will leave the company on April 30 next year and is assisting with his replacement. The board at the women's apparel retailer has hired executive recruitment firm Heidrick & Struggles for the search, according to a company press release.
The news comes as the company also reported that third quarter net sales rose 7.5% to $174.1 million from $162 million in the year-ago quarter. Direct-to-consumer net sales were 39.8% of the total, slightly up from 39.5% a year ago, the company said in a press release. Total comparable sales, including store comps and direct to consumer, rose 1%, the 18th consecutive quarter of positive store comps, with e-commerce performing better than expected, CEO Linda Heasley told analysts, according to a transcript from Seeking Alpha.
Gross profit rose to $115.5 million from $108.5 million in the year-ago period, and gross margin declined to 66.3% from last year's 67%, the company also said. Income from operations rose to $13.9 million from $13.3 million in last's year's third quarter.
In a conference call with analysts Wednesday, Heasley expressed confidence in J.Jill's brand, and promised more focused and agile operations to take advantage of that. That includes "product that is more relevant and trend-right and improving imagery and messaging to better reflect the brand and better relate our offering to her lifestyle," she said in the call. "[W]e are improving the overall agility and discipline in our planning, merchandising and marketing to ensure we can react to market and consumer changes more nimbly."
The quarter demonstrated the retailer's positive sales momentum, lower inventory levels and e-commerce enhancements, she also said. Morgan Stanley analysts in comments emailed to Retail Dive acknowledged the improvements but call them a "work in progress."
"While we like all of these green shoots, we are hesitant to get ahead of ourselves, as [J. Jill] is still in the process of fixing its inventory and eCommerce issues," analysts led by Kimberly Greenberger said in their note, noting that the third quarter was also the sixth consecutive one of gross margin compression, and that comp sales were modest compared to last year and were driven by clearance sales.
The company may not be as rushed as more trend-driven retailers, but Heasley said that doesn't leave it off the hook and she said its vendors are up to the task. "Good news for us, our customer isn't always first to a trend," she told analysts. "But increasingly, the marketplace is shrinking relative to her access through the internet ... So we know we need to respond a lot more quickly."
The retailer continues to develop its new "Fit Predictor" to aid shoppers buying online. Heasley said that's already helping drive digital sales. (It's also a way to cut down on returns, other research shows.)
"What we're finding, as I said in talking to the customers, is as we bring in lifestyle imagery, showing her different ways to style the products, we are making our loyal customer happier and we're attracting a new-to-brand customer that is slightly younger," Heasley said. "So it is definitely a balancing act, we're very focused on that. But we are showing more resilience and flexibility and versatility in the product, so people can wear it anywhere they wish and that's part of what we're doing."
The retailer also had an executive change this past spring when former CEO Paula Bennett retired as president and CEO and was succeeded by Linda Heasley, the former CEO of Lane Bryant.
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