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J. Jill Inc shares fall on sluggish fiscal 3Q outlook

The company's results for its fiscal second quarter beat the Street's estimates, but investors remained unimpressed

clothing
A weak spot in the quarter was the slippage in the retailer's gross margin to 64.9%

Shares in J.Jill (NYSE:JILL) slumped Tuesday despite the women’s clothing retailer zipping past Wall Street analysts’ expectations for its fiscal second-quarter profit and revenue.

On a per share and adjusted basis, the company, which is based in Quincy, Massachusetts, earned US$0.24 per share on revenue of US$179.7mln. These results ran past the market estimate of US$0.23 per share on revenue of US$178.6mln.

But the figures slipped from the year-ago quarter when J.Jill’s per share earnings came in at US$0.28 on revenue of US$181.4mln.

Investors were left unimpressed and sent J.Jill shares down by 11.1% in the pre-market session to US$6.64.

A weak spot in the quarter was the slippage in the retailer’s gross margin to 64.9% compared to 67.6% in the year-ago period. Its gross profit also fell to US$116.7mln from US$122.6mln over the same time frame.

Read: J.Jill shares drop on news chief executive and president to retire; fourth-quarter profit beats forecasts

The company benefited from the lowering of its income tax rate as its income tax expense dropped to US$4mln compared to US$8.6mln in the same period last year. Its tax rate came in at 27.4% compared to 41.6% in the year-ago quarter.

Investors also seemed disappointed by J.Jill’s weak outlook projections. Looking ahead to the fiscal third quarter, the retailer expects its total comparable sales to decrease by 2% to 4% after reporting a 2.2% jump in comparable sales in the second quarter.

Its earnings per share, meanwhile, are expected to fall between US$0.09 to US$0.11 for its next fiscal quarter, which includes a US$0.02 benefit from a lower tax rate and a US$0.03 related to a shift in the calendar.

Contact Ellen Kelleher at [email protected]

Quick facts: J Jill Inc

Price: 1.04 USD

NYSE:JILL
Market: NYSE
Market Cap: $45.8 m
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