Fourth quarter net sales for the J. Jill Group increased by 4.0% to $119.4 million from $114.9 million reported in the prior year.
For the quarter ended Dec. 25, 2004, operating income totaled $4.5 million or 3.7% of net sales compared to $5.6 million or 4.9% of net sales last year. The company posted net income for the quarter of $2.6 million or $0.13 per diluted share versus $3.2 million or $0.16 per diluted share in the fourth quarter of the previous year.
For the fiscal year ended Dec. 25, the company recorded net sales of $434.9 million compared to $376.9 million in the prior year. Operating income for the fiscal year was $15.3 million or 3.5% of net sales compared to $12.6 million or 3.4% of net sales in the prior year. Net income for the fiscal year was $8.7 million or $0.42 per diluted share versus $7.0 million or $0.35 per diluted share in the previous year.
Gordon R. Cooke, president and CEO said in a statement that fiscal 2004 was a year of contrasts and challenges” for the Quincy, MA-based cataloger and retailer. “We got off to a great start with a record setting spring season and unfortunately finished the year off with a disappointing performance during the fall.”
The disappointing fall was driven by a struggling direct business segment, a lack of “fashion mandated colors and trends” and marketing campaigns he deemed to “somber” to resonate with the consumer, said Cooke.
In fiscal 2004, he noted, the company’s retail segment grew by 35% and represented 55% of J. Jill’s total business. Retail’s contribution increased by $16.5 million to 9.2% of segment net sales from 3.2% of segment net sales last year. In contrast, the direct segment net sales declined by 2% for the year.
Cooke added that the company’s retail segment’s performance so far this spring was “disappointing,” and that the direct business continues to fall short of expectations.
“We think that our ongoing design initiatives, combined with our fit evolution, may be creating the appearance that we are shifting our focus to a different or younger customer,” he said. “This is not our strategy and we need to find a way to make that clear to our customers.”
The company is currently expecting first quarter net sales to be between $91.0 and $93.0 million, with a loss per share in the range of $0.25 to $0.28.
J. Jill plans to open 40 new retail stores in fiscal 2005, and plans to reduce the size of stores to approximately 3,300 square feet. Cooke noted that the company is using its cross-channel customer database to drive store traffic and is reassessing the size of its direct business with an “eye toward rightsizing it in order to maintain profitability.”
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