J.Jill Q1 Earnings Call Highlights

J.Jill (NYSE:JILL) executives said the women’s apparel retailer delivered first-quarter results in line with internal expectations while continuing a brand and product transition aimed at broadening its customer base.

Chief Executive Officer and President Mary Ellen Coyne said J.Jill remains in the “early stage” of evolving its brand and business in a difficult external environment. She said the company began fiscal 2026 focused on expanding its customer file through three priorities: evolving the product assortment, enhancing the customer journey and advancing internal capabilities.

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“Evolution takes time and requires patience as our product and marketing strategies are introduced to both new and existing customers,” Coyne said. She added that feedback from stores, where customers can experience new assortments with help from sales associates, supported management’s confidence in the company’s direction.

Sales Decline as Direct Channel Remains Price Sensitive

Company executive Mark said first-quarter sales were about $144 million, down 6% from the prior year. Total company comparable sales fell 8.7%, partially offset by sales from new stores opened last year.

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Retail sales declined about 4% from the year-ago quarter, driven by softer conversion, though higher average unit retails and a net six additional stores compared with the prior year helped offset the decline. Direct sales fell approximately 8% and represented about 46% of total sales.

Mark said the direct channel remained pressured by lower conversion and a greater mix of markdown sales, as consumers continued to show price sensitivity. In response to an analyst question, Coyne said stores are currently delivering stronger results than direct, and the company is working to improve online engagement through tools such as look books, fabric guides, video and stronger product storytelling.

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Gross profit was about $98.7 million, down approximately $12 million from the first quarter of 2025. Gross margin was 68.3%, down 350 basis points, driven by roughly $4.7 million in net tariff costs and a higher mix of markdown sales, mainly in the direct channel.

Selling, general and administrative expenses were about $90 million, compared with approximately $91 million a year earlier. Mark said lower marketing costs, a shift of the April catalog into May, lower general and administrative overhead and lower technology project costs were partially offset by new store costs, occupancy inflation and merit increases.

Adjusted EBITDA was $16.7 million, compared with $27.3 million a year earlier. Adjusted net income per diluted share was $0.45, compared with $0.88 in the prior-year period.

Product Transition Shows Early Signals

Coyne said the first-quarter assortment represented the beginning of a transition and was still dominated by legacy product, with some new styles and silhouettes pointing to where the brand is heading. She cited jackets and accessories as notable successes during the quarter.

Accessories remain a small part of the business, but Coyne said they showed strong growth and could represent an opportunity because they can serve as an entry point for new customers or as an impulse purchase that reactivates lapsed customers.

Management also identified areas for improvement. Coyne said the tops assortment “skewed too far into shorter lengths” and lacked enough breadth in prints. During the question-and-answer session, she said the company learned that customers wanted more tunics after J.Jill reduced that offering, and that the assortment in February and March was too neutral.

“Our customer responds to color,” Coyne said, noting that later deliveries featuring pink, aqua and red, white and blue performed well.

Coyne said J.Jill is using a balanced approach to product evolution, with the majority of the assortment intended to appeal to both existing and new customers, while smaller portions protect legacy preferences and push the brand forward.

Customer Growth and Loyalty Program in Focus

Coyne said new-to-brand customer acquisition grew slightly year over year, primarily through the retail channel. She said the new customers were younger than J.Jill’s existing customer average and were spending more, calling the trend encouraging even though the segment remains relatively small.

J.Jill also reported growth in its SMS file during the quarter. In March, the company launched a new non-tender loyalty program called J.Jill Collective to a small subset of customers. Coyne said the early response has been strong and that the company plans to roll it out more broadly.

The company also highlighted the appointment of Kimberly Wallengren as chief marketing officer at the end of April. Coyne said Wallengren, previously with Coach and American Eagle, will lead the loyalty program as well as customer and marketing strategies.

Guidance Reaffirmed Despite Tariff Pressure

J.Jill reaffirmed its full-year guidance for sales, comparable sales, gross margin, adjusted EBITDA and free cash flow. The company continues to expect full-year sales to be flat to down 2%, comparable sales to decline 1% to 3%, gross margin to fall approximately 50 basis points and adjusted EBITDA of $70 million to $75 million. Free cash flow is still expected to be about $20 million.

For the second quarter, J.Jill expects sales to decline 1% to 3%, comparable sales to decline 2% to 4% and adjusted EBITDA of $18 million to $20 million. The company expects second-quarter gross margin to decline approximately 100 basis points from last year, primarily due to about $4 million of net tariff costs.

Mark said J.Jill received a small portion of an IEEPA tariff refund claim early in the second quarter, but the company is not including any refund benefit in guidance because of uncertainty around timing and reimbursement amounts. The company now expects approximately $14.5 million of net tariff costs in fiscal 2026 gross profit, slightly below its prior expectation, with the benefit offset by higher fuel and other input costs.

Store Growth Plans Adjusted

J.Jill ended the quarter with 255 stores, compared with 249 at the end of the prior-year quarter. The company closed two stores and opened one during the first quarter.

Management lowered its expected fiscal-year capital expenditures to $20 million to $25 million, from prior guidance of about $25 million. J.Jill now expects to open one to five net new stores this year, compared with prior expectations for about five net new stores. Mark said the shift reflects the current operating environment, broader macro uncertainty and changes in the mall landscape.

The company repurchased 68,500 shares for approximately $790,000 during the quarter and had about $13 million remaining under its $25 million share repurchase authorization. Mark also noted that the board declared a quarterly dividend of $0.09 per share, payable July 8 to shareholders of record as of June 24.

Coyne said J.Jill expects gradual sequential improvement as product changes and marketing strategies take hold, but emphasized that the transformation remains in its early stages.

About J.Jill (NYSE:JILL)

J.Jill is a women’s apparel retailer specializing in modern, versatile clothing and accessories. The company designs and markets a range of products that emphasize comfort and style, including knitwear, woven tops, pants, dresses, outerwear, jewelry, and footwear. Through its in-house design team, J.Jill focuses on creating seasonal collections that appeal to women seeking effortless, mix-and-match wardrobes.

Products are sold through a multi-channel distribution network comprising company-operated boutiques, e-commerce platforms, and catalog sales.

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