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J.Jill, Inc. (JILL) Stock Undergoes Correction After Massive Rallies Following Promising Q4 2020 Results

LIXT Stock

LIXT Stock

J.Jill, Inc. (JILL) stock prices were down 9.11% shortly after the market opened on May 17th, 2021, bringing the price per share down to USD$11.18.

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Adapting to the Pandemic

The onset of the global covid-19 pandemic wrought havoc on the retail space over the course of fiscal 2020, but JILL managed to position themselves at the end of the year with enhanced financial stability, a leaner cost structure, and tidied up inventory balances.Q4 2020 results reflect the deliberate and aggressive actions implemented by JILL as the company showed sequential improvement in its top line as compared to the prior quarter.

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Solid Liquidity Position

The company reported having a solid liquidity position as of the end of the fourth quarter of the fiscal year 2021, ended January 30th. The company had access to USD$23.8 million of total availability under its existing revolving credit agreement, in addition to having USD$4.4 million in cash on hand.

Net Sales Breakdown

Inventory at the end of Q4 2020 was down 20.1% from USD$72.6 million at the end of the fourth quarter of fiscal 2019, with Q4 2020 having reported USD$58 million. Total net sales or the thirteen-week period ended January 30th, 2021 came in at USD$120.4 million, while the thirteen weeks ended February 1st, 2020 reported USD$168.1 million. Direct to consumer net sales made up 64.8% of the company’s total net sales for the fourth quarter of fiscal 2020, while the same time period of the prior year reported 47.3%.

Gross Profit Reports

Gross profit came in lower than the prior-year period, as expected, with Q4 2020 reporting USD$68.7 million down from the USD$100 million reported in Q4 2019. The year-over-year decline in gross margin was largely attributable to the actions taken by the company in Q4 2020 to facilitate the clearing of excess inventory.

SG&A Breakdown

SG&A for Q4 2020 was USD$85.6 million, down from the USD$100.7 million reported in the fourth quarter of the fiscal year 2019. Q4 2020 saw USD$1.7 million in cost primarily arising from legal and advisory expenses related to debt restructuring agreements with lenders. These costs in conjunction with direct costs incurred by the covid-19 pandemic response were partially offset by a USD$0.5 million benefits related to the adjustments in the forecasted costs of permanently closing some retail locations.

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Future Outlook for JILL

Having adapted so adeptly to the novel and devastating effects of the spread of the coronavirus pandemic, JILL has won its investors vote of confidence with its financial reports. As the world pushes for universal immunizations, the company is primed to capitalize on the unrestricted opening of its retail spaces, which will see them usher in sustained and significant growth.

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