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Sales at J.Jill Inc. are expected to slow in the fourth quarter.
J.Jill’s president and CEO Claire Spofford told analysts at an earnings conference call on Wednesday that customer behavior has been mixed in the third quarter, with the full-price consumer not spending as robustly as earlier in the year. “The direct consumer continues to be a little bit more price sensitive than our retail customer, and traded into markdowns a little bit more in the quarter,” she said. According to Spofford, the chain had an “unusually strong May and June” where full-price sales were super high, followed by a shift in behavior moving into summer. “We haven’t seen that May, June profile come completely back,” she said.
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Spofford, whose four-year tenure at the women’s specialty retailer saw her helm a turnaround at the chain driven by cash-flow generation, disciplined inventory management and a strong focus on full-price selling, said she will retire in April and will work with the executive team and board of directors to ensure a seamless transition.
“The operational disciplines and strategic framework we’ve established will serve the company well as it enters its next chapter,” she said.
Mark Webb, executive vice president and CFO and chief operating officer, told investors that the company will end the year with an addition of four stores, reflecting nine store openings and five closures. The company sees a 50-store opportunity over a five-year timeframe. “We’ve mentioned 20 to 25 over a more medium-term or three-ish year timeframe,” he said.
As for the potential of higher tariffs ahead, Webb said there still needs to be detailed information that’s needed to understand what will be implemented and when.
“The impacts at some of the levels that they’re talking about with respect to sort of all country tariffs would be meaningful and obviously would require some level of negotiations with vendors, some level of price reviews on our products and some level of absorption within the company,” Webb said. “But it’s still way too early to comment on, given that it’s not yet the new administration, and we need to see where this stuff all lands.”
As for the countries already mentioned, Webb said China represents less than 5 percent in terms of finished goods production, and there’s not much importing from either Canada or Mexico.