J Jill driven by data analysis, omnichannel, and newness to hit peak Q1 performance
J Jill shares jumped more than 13% Wednesday after the women’s fashion retailer reported Q1 results and a forecast that exceeded analysts’ expectations. It was the retailer’s best trading day since March’s IPO with its shares touching a session high of $13, its IPO price, earlier in the day.
So how good was the opening quarter? Well, for starters, the retailer intimately knows its core customer. That partly explains why its comp sales increase 9.9%, ahead of analysts’ 8.1% estimate; total sales rose 13% on-year to $166.1m; and direct to consumer net sales, now represents 42.6% of total net sales, up from 40% a year ago.
Earnings for the three months ended April 29 also jumped 32.2% to $8m/18 cents diluted share. Adjusted EPS, after excluding net non-recurring expenses, came in at 24 cents from 16 cents a year ago. Analysts expected adjusted earnings of just 6 cents.
The retailer sees Q2 and full fiscal year comp sales growing in the high single digits and EPS for both periods above consensus. The latter means a lifted EPS estimate of 5 cents on both ends to 80-84 cents.
CEO Paula Bennett cited the retailer’s ability to “consistently capitalise on the strengths of our omnichannel data-driven business model.”
She added that J Jill is “hyper-focused on our customer… who she is, what she wants and what is relevant to her.”
Later in a conference call to analysts, she added that the opening quarter performance “demonstrates once again our proven ability to add new customers to our file, retain existing customers, and increase the spending of all segments.”
She added that the retailer “knows to bring even more women into our brand, and we retain our customers for an average of seven years.
“On top of earning her loyalty, we also have the opportunity to move her from a single to a multi-channel customer, which increases her spend with our brand by an average of three times.”
She noted that “newness was an important driver,” supported by adding new collections every four weeks.
She said that in Q1 the retailer improved its customer file growth by applying “our focused marketing strategy to acquire the 40-65 year-old women with an average household income of over $150,000.”
Bennett highlighted the use of data analysis, noting that through its customer files it has matched 97% of all transactions to a specific customer. That purchase history has given J Jill a “wealth of knowledge” about the customer and what she wants to enable the company to plan and better predict purchase behaviours across its channels.
She added that the J Jill stores are a “very important component of our overall strategy and are also very profitable.”