Dive Brief:
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Thanks to careful inventory management and a customer somewhat insulated financially from the tough macro environment, J. Jill on Tuesday said Q4 net sales edged up 1.7% year over year to $147.7 million. Total comps including e-commerce rose 5.3%.
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E-commerce sales, nearly half of total net sales, fell 2.5%, according to a company press release. Gross margin expanded 50 basis points to 64.4%, driven by lower freight costs that more than offset margin pressure from promotions. Net income tumbled 71% to $1.04 million.
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The women’s apparel retailer ended the quarter with inventory down 9.6% to $50.6 million, which helped it resist markdowns, executives told analysts. J. Jill closed five stores and opened one in the period, ending with 243. Store-based sales were up 6% year over year, with 4% fewer stores, Chief Financial and Operating Officer Mark Webb said Tuesday.
Dive Insight:
J. Jill continues a comeback story predicated on careful inventory management and a similarly cautious approach to its brick-and-mortar footprint.
The apparel retailer scrambled to avoid bankruptcy during the height of the pandemic and is now focused on achieving consistent, profitable growth. The company beat its own expectations for the quarter, in great part thanks to sales in stores, especially early in the year, Webb said. January was the strongest month of the period.
J. Jill ended the year with fewer stores and may close more as leases come up, but, ultimately, the idea is to expand the footprint carefully, Webb also said.
“We believe there is opportunity to grow this channel and are actively pursuing select new store openings, but we are steadfast in the metrics we need to do so,” he said, adding, “It is our intent to strike fair deals and in time begin to grow this important channel.”
Last year’s “Welcome Everybody” effort to be more inclusive in merchandising and pricing has paid off. The retailer will work more this year to promote it, including by testing new marketing channels and “working with influencers in the size inclusivity category,” CEO Claire Spofford said on the call.
“We were pleased to see growth in this space both in new-to-brand and reactivated customers,” she said. “While still fairly early, we are pleased with the initial success of this initiative and the opportunity to build on it in 2023 and beyond.”
