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JI

J.Jill, Inc. (JILL)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 (company-reported as “third quarter of fiscal 2024”) delivered healthy profitability amid selective consumer behavior: Net sales $151.3M (+0.3% YoY), gross margin 71.4% (-60 bps YoY), GAAP diluted EPS $0.80 and Adjusted EPS $0.89; Adjusted EBITDA $26.8M (17.7% margin) .
  • Management authorized a $25.0M share repurchase program and declared a $0.07 dividend, signaling continued capital return alongside investment in omni-channel systems and new stores .
  • Guidance tightened for Q4: Sales down 4–6% vs prior-year 14-week, comps +1–3%, Adjusted EBITDA $12–14M; FY24 Adjusted EBITDA guided to $105–107M; capex ≈$22M and net store growth of 4 maintained .
  • Stock reaction catalysts: continued high-teens EBITDA margins, repurchase authorization, but near-term gross margin pressure from elevated freight and promotional cadence; CEO retirement and leadership transition introduced in-quarter .

What Went Well and What Went Wrong

What Went Well

  • Margin discipline sustained despite softer full-price selling: Q3 gross margin 71.4% with Adjusted EBITDA margin 17.7% as teams “remained focused on executing our operating model” .
  • Product and marketing resonance: strength in bottoms anchored by the “iconic” ponte pant campaign and growing engagement from design-led Instagram content; sequential sales improvement through the quarter as colder weather arrived .
  • Strategic positioning and TSR: Board authorized a $25.0M repurchase; store fleet expansion resumed with 3 new openings and one relocation reopening; dividend continued .
    • “We delivered third quarter results inline with our expectations…yielding another quarter of healthy overall margin performance” — CEO Claire Spofford .
    • “We delivered adjusted EBITDA for the quarter of $26.8 million or 17.7% of sales” — CFO Mark Webb .

What Went Wrong

  • Traffic and full-price softness: total comps -0.8% (storms -50 bps impact), with direct channel more price-sensitive; elevated promotions needed to move seasonal goods .
  • Gross margin headwinds: elevated ocean freight and strategic shipping/rerouting ahead of port risks pressured margins, with further pressure expected in Q4 .
  • SG&A inflation and OMS investments: SG&A ~$89M vs ~$86M last year, driven by wage inflation, marketing, and ~$0.4M incremental OMS costs in Q3 .

Financial Results

Headline Comparisons (oldest → newest)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$150.9 $153.6 $154.0 $151.3
Gross Margin (%)72.0% 71.8% 68.4% 71.4%
Operating Income ($USD Millions)$22.1 $19.1 $16.8 $19.2
Adjusted EBITDA ($USD Millions)$28.6 $27.3 $25.6 $26.8
GAAP Diluted EPS ($)$0.80 $0.76 $0.69 $0.80
Adjusted Diluted EPS ($)$1.05 $0.88 $0.81 $0.89
Comparable Sales (%)+1.9% prior-year base; current -0.8% -5.7% -1.0% -0.8%
DTC Mix (% of Net Sales)45.7% 46.7% 46.4% 45.7%
Store Count (ending)244 prior-year Q2; 247 in Q3 249 247 247

Notes: Company refers to the period as “third quarter of fiscal 2024” (ended November 2, 2024), which aggregators label as Q3 2025 .

YoY for Q3

  • Revenue: $151.3M vs $150.9M (+0.3%) .
  • Gross margin: 71.4% vs 72.0% (-60 bps) .
  • GAAP EPS: $0.80 vs $0.80 (flat) .
  • Adjusted EPS: $0.89 vs $0.83 (+$0.06) .
  • Adjusted EBITDA: $26.8M vs $28.6M (-$1.8M) .

Channel/Operating Detail

  • Store sales: +0.2% YoY; DTC sales: +0.3% YoY; DTC was ~46% of sales, but more price-sensitive leading to higher markdown penetration .
  • Inventory: $61.7M vs $56.7M YoY; normalized inventories flat given calendar shift and earlier shipping .
  • Cash from operations: $19.1M in Q3; ending cash $38.8M; Free cash flow $13.6M .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net SalesQ3 FY25Flat to down low-single digits vs FY24 Actual delivered $151.3M; Q4 guidance now down 4–6% vs 14-week Q4 FY23 Q3 guidance fulfilled; Q4 lowered vs prior year comp base
Comparable SalesQ3 FY25Down low to mid-single digits vs FY24 Q3 actual comps -0.8%; Q4 comps +1–3% (ex-53rd week) Q3 better than midpoint; Q4 implying modest improvement
Adjusted EBITDAQ3 FY25$18–22M Q3 actual $26.8M Raised vs guidance (delivered above range)
Adjusted EBITDAQ4 FY24—$12–14M New Q4 guide introduced
Adjusted EBITDAFY24Prior narrowed view implied high-teens margin$105–107M; down 5–7% YoY; ex-53rd week and OMS opex, down 2–4% Narrowed and clarified
CapexFY25$20–25M $20–25M reaffirmed (full-year FY25) Maintained
Net Store GrowthFY251–5 net new stores 1–5 net new stores reaffirmed Maintained
DividendQuarterly$0.07–$0.08 declared across periods$0.07 declared Dec 4, 2024; $0.08 (June & Aug 2025) Continued
Share RepurchaseAuthorizationNone prior$25.0M over 2 years (authorized Dec 6, 2024) New authorization

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
Full-price selling and promotionsQ1: Full-price customer slowed; withdrew FY25 guidance amid macro uncertainty . Q2: Sequential sales improvement; summer sale period helped; guided Q3 Adjusted EBITDA $18–22M .Q3: Full-price customer not as robust as early-year; targeted markdowns to move seasonal goods; margins held .Stabilizing but below early-year levels
Supply chain and freightQ1/Q2: OMS implementation progressing; shipping/port risk monitoring .Elevated ocean freight costs; preemptive rerouting ahead of potential East Coast port strike; more pressure expected in Q4 .Near-term headwind
Tariffs/macroQ1: Macroeconomic uncertainty led to guidance withdrawal . Q2: Q3 outlook incorporated ~$5M tariff cost impacts net of offsets .Management tracking potential “all-country” tariffs; China exposure <5% of finished goods; response would include vendor negotiations and pricing reviews .Watchlist risk
Product/marketing executionQ1: Brand fundamentals solid; omni-channel strengthening . Q2: Sequential improvement; strategic framework under new CEO .Strong bottoms driven by “iconic” ponte pant campaign; Instagram engagement; seasonal assortments aided late quarter .Positive engagement
Omnichannel systems (POS/OMS)Q1/Q2: OMS investment; capex plan maintained .New POS delivering promising trends; OMS to enable in 2025; ~$0.4M incremental OMS opex in Q3 .Execution progressing
Store fleet strategyQ1: Net store growth 1–5 maintained . Q2: 247 stores; share repurchase and dividend continued .3 new stores + 1 reopening; plans for 20–25 net new stores over ~3 years; paybacks <3 years .Accelerating openings

Management Commentary

  • “We delivered third quarter results inline with our expectations…yielding another quarter of healthy overall margin performance.” — Claire Spofford, CEO .
  • “We delivered a healthy gross margin of 71.4%…and adjusted EBITDA…17.7% of sales.” — Mark Webb, CFO/COO .
  • “We launched our iconic campaign…a spotlight on our ponte pants…delivering strong results in bottoms and modernizing the brand presentation.” — Claire Spofford .
  • “We are shipping goods early to offset delays…rerouted some holiday goods to the West Coast in advance of the potential East Coast port strike.” — Mark Webb .
  • “China…is below 5% in terms of finished goods production…we are tracking [tariffs] closely.” — Mark Webb .

Q&A Highlights

  • Consumer cadence and promotions: August softness improved through the quarter; direct channel remained more price-sensitive; promotions were surgical to support margin objectives .
  • Weather impact: delayed cool weather impacted early fall assortments; performance improved with colder temperatures and targeted promotions .
  • Q4 outlook: Guide reflects current trends and a range of outcomes; margin pressure expected to be greater than Q3 due to freight and calendar shift .
  • Store growth: Pipeline is robust; plan to ramp openings toward 20–25 net new stores over ~3 years .
  • Tariff risk: Limited China finished-goods exposure (<5%); management prepared to negotiate vendor offsets and review pricing if broad tariffs implemented .

Estimates Context

  • S&P Global consensus EPS and revenue estimates for Q3 2025 were unavailable due to a retrieval limit at the time of this analysis. As a result, we cannot provide “vs. estimates” comparisons anchored on Wall Street consensus. Future updates will incorporate S&P Global consensus once accessible.
  • Given this, the “vs estimates” columns in the tables are intentionally omitted, per guidance to anchor on S&P Global when available.

Key Takeaways for Investors

  • Margin discipline remains the differentiator: high-teens Adjusted EBITDA margins and 71.4% gross margin despite promotions underscore operating model resilience .
  • Near-term gross margin headwinds into Q4 from elevated freight and calendar dynamics warrant caution for quarter-over-quarter margin trajectory .
  • TSR story building: $25.0M repurchase authorization and recurring dividend complement debt reduction and free cash flow generation .
  • Growth levers are tangible: bottoms strength, brand-modernizing campaigns, and accelerating store openings with <3-year paybacks support medium-term expansion .
  • System investments (POS/OMS) should improve omni-channel execution and customer experience in 2025; modest opex drag near term .
  • Monitor tariffs and logistics: management’s low China exposure and vendor offset strategy mitigate risk, but broad-based tariffs could pressure costs and pricing; watch for policy clarity .
  • Leadership transition: CEO retirement announced; process underway to identify successor—near-term execution remains steady, but any strategic pivots should be tracked .