It's been a while since things have gone right for J. Jill (NASDAQ:JILL) in the fashion sense, but Wednesday, investors were treated to some indication that things might be getting back on track. J. Jill increased its earnings forecast for the fourth quarter, which is a dose of good news for those who have been following the retailer for a while.
J. Jill, which targets women aged 35 and older, said that it's increasing its per-share earnings expectation to $0.12 to $0.14, which is far better than the company's previous guidance for a break-even quarter. Last year, J. Jill reported fourth-quarter earnings of $0.13 per share.
On the other hand, J. Jill said that its same-store sales are expected to decrease by 3%, compared to a modest increase of 2.4% last year. That still implies that J. Jill continues to work on finding ways to entice customers in its mall-based stores. Shoppers were more open to J. Jill's full-priced merchandise, and the company described its holiday catalog as successful, too. J. Jill's overall sales are expected to increase by 10%.
J. Jill's struggles have been well-documented, and its continued difficulties led me to choose the retailer as my Halloween Trick last October. After that, though, what already seemed like a pricey stock skyrocketed after it went public. Liz Claiborne (NYSE:LIZ) expressed serious interest in purchasing the company -- interest that had been ongoing and included previous reticence from J. Jill. Last month, J. Jill and Liz Claiborne entered into a confidentiality agreement, implying that they are a step closer to a deal. (President and CEO Gordon Cooke mentioned that fourth-quarter earnings will include nearly $1 million in expense associated with its exploration of "strategic alternatives.")
J. Jill targets a tough demographic, with many retailers going for the same mature female shopper. Everyone else wants to be Chico's (NYSE:CHS), with other companies like Coldwater Creek (NASDAQ:CWTR), Talbots (NYSE:TLB), and Ann Taylor (NYSE:ANN) vying for mature women's dollars with varying degrees of success. Many of us are also extremely interested in seeing whether Gap (NYSE:GPS) can follow Chico's lead with its new concept, Forth & Towne.
J. Jill's good news is impressive, given that happy tidings for the company have been rare lately, and that apparel retailers faced a tricky, promotion-heavy holiday season. However, J. Jill's lofty share price (it has increased about 50% since initial word of Liz Claiborne's interest) mostly hinges on the possibility that it might arrange a fortuitous sale. Whether such a deal will be as fortuitous as investors obviously suspect it will be ... well, that remains to be seen. I can't help but wonder whether those who have purchased J. Jill shares since November's Liz Claiborne mania may find themselves disappointed.
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Alyce Lomax does not own shares of any of the companies mentioned.
