Apparently, J. Jill (NASDAQ:JILL) got spiffed up for spring. The apparel retailer's shares enjoyed an after-hours pop following its revision of a first-quarter forecast to a profit instead of the expected loss. J. Jill's fallen on shabby times in recent history, and yesterday's announcement seemed enough to convince some investors that things are looking up, considering the after-hours action and a nearly 9% increase in share price this morning.
J. Jill, which targets women 35 to 55 years of age, said it expects to report first-quarter earnings of $0.02 to $0.04 per share, with sales between $97 million and $99 million. Compare this to the previous forecast for a loss of $0.15 to $0.20 per share, and revenues of $87 million to $92 million.
Before going head over heels for J. Jill, though, consider the company's protracted awkward phase. Dave Marino-Nachison has taken several looks at J. Jill, including a peek in December, and LouAnn Lofton noted the company's frumpy numbers in September. J. Jill's retail stumble began in Dec. 2002.
While the recession made it difficult for many retailers to woo would-be shoppers, J. Jill has taken a bit longer to recover. Its tough times included a difficult and perhaps ill-timed expansion from its direct retail (catalog) roots into online and real-world sales, as well as fashion missteps -- the latter of which is deadly during times when money is only spent for compelling reasons.
Speaking of fashion, several other retailers that hunt the same affluent, mature female demographic as J. Jill have done well in recent quarters, including Chico's FAS (NYSE:CHS). Ann Taylor (NYSE:ANN) has also shown lots of promise, having overcome a rocky beginning to 2003. Meanwhile, Talbots (NYSE:TLB) has floundered.
In its press announcement late yesterday, J. Jill said that a better fashion mix, including an emphasis on color, most notably pink, has helped drive demand for its clothing. However, it also contained a shade of warning against over excitement, saying, "Accordingly, it would be inappropriate to extrapolate these initial successes and, therefore, the company's previously announced targets for the rest of fiscal 2004 remain unchanged."
The stock is currently trading at about 34 times forward earnings and just shy of its 52-week high. For all that this season seems to be all about pink, it strikes me as a bit soon to don rose-colored glasses for J. Jill.
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Alyce Lomax does not own shares of any of the companies mentioned. The color pink is her mortal enemy.
