J. Jill (NASDAQ:JILL) has proven a bit of an investment roller-coaster ride over the last year or so. Although the retailer still reported the expected third-quarter loss today, the fact that it beat by a penny and said it increased sales of full-price items seems to have won some investors over.
While J. Jill did beat the consensus estimate, it's still reporting within the confines of its own call for a loss of $0.13 to $0.15 per share on Oct. 1. Today, J. Jill reported a third-quarter net loss of $2.6 million, or $0.13 per share, as compared with a loss of $2.9 million, or $0.15 per share, in the same quarter last year.
The good news is, J. Jill's revenues increased by 15.3% to $94.9 million. Its same-store sales increased by 4.7%, a perfectly respectable figure. Higher sales -- and a higher gross margin -- were in part the result of more customers' willingness to buy full-priced items.
J. Jill gets a check in the Foolish box for including its cash flow statement with its earnings release, but it provides a snapshot of the company's difficult quarter. J. Jill reported $4.1 million in free cash flow for the cumulative nine-month period, a 10% reduction from this time last year and a 79% decrease from last quarter's figure, when things were a little more flush.
Shares of J. Jill increased nearly 10% in recent trading, despite the fact that it seems caution is still warranted. After all, the company still faces serious competition from the likes of powerhouse Chico's (NYSE:CHS) and Ann Taylor (NYSE:ANN), both of which target the same older female demographic. Gap (NYSE:GPS) plans a concept for the mature female shopper as well.
In its conference call, J. Jill admitted that most retailers will be missing the catalyst that was the popularity of the color pink earlier this year. However, management was enthusiastic about some of its upcoming product offerings, such as a new line of sleepwear.
Despite signs of improvement in its business outlook, J. Jill is currently trading at a pricey 32 times forward earnings. Compare that to Ann Taylor's forward P/E of 15. (Chico's is currently at 28, but that company has traditionally delivered much hotter earnings and sales growth.) It looks like J. Jill still has some work to do before its shares will seem cheap -- or particularly compelling.
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Alyce Lomax does not own shares of any companies mentioned.
