Bear of the day: J.Jill (JILL)
J. Jill, Inc. (JILL) is among the clothing retailers hit hard by the coronavirus lockdown. This Zacks Rank #5 (Strong Buy) should now see a big drop in revenue this year.
J.Jill is a women’s clothing retailer with 280 stores nationwide and an e-commerce website.
A big miss in the first fiscal quarter
On July 28, J.Jill released its fiscal first quarter 2021 results and missed the Zacks consensus by 441%. The profit was a loss of $0.65 compared to the Zacks Consensus of a loss of $0.12.
Its stores were closed due to the coronavirus lockdown from mid-March and began reopening in May. As of July 28, all of its stores had reopened.
Net sales fell $85.5 million to $91 million from $176.5 million a year earlier.
However, due to the shutdown, it is not publishing comparable store sales compositions for the quarter.
Like all other retailers, its online business surged in the quarter, with direct-to-consumer sales accounting for 61.4% of total net sales, up from 41.9% in the first quarter a year earlier.
Gross margin fell to 55.1% from 65.9% a year ago. There was a charge of $5.2 million related to possible future liability payments, which negatively impacted gross margin by 570 basis points.
Abstention extended again
On June 15, 2020, J.Jill entered into two forbearance agreements with lenders under its ABL and term credit facilities.
He is currently in negotiations with his lenders.
The deadline for this extension has now been extended to August 27, 2020. But it continues to be extended by 2 weeks as negotiations continue.
Reduced estimates for fiscal year 2021
It’s been a tough time for most apparel retailers this year.
Zacks only has one rating on J.Jill, but it’s been discounted in the last 30 days for the full year.
The Zacks consensus estimate now calls for a loss of $1.13, down from a loss of $0.36 just a month ago.
It made $0.06 last year, which is a 1,983% drop in profits.
Stocks sink further
Shares of J.Jill were already down significantly for the year, but in the past month they have fallen again, losing another 45%.
They are now trading well below $1 and have been since early June.
J.Jill was unable to provide advice given the uncertainty surrounding COVID-19.
For investors interested in buying a specialty retailer, look for opportunities in the footwear sector.
Foot Locker, Inc. (FL) and Boot Barn Holdings, Inc. (BOOT) are two to keep on your shortlist. Both are Zacks Rank #3 (Hold) stocks.
More stock news: It’s bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold barely 1 billion iPhones in 10 years, but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a special report that sheds light on this rapidly emerging phenomenon and 6 tickers to take advantage of it. If you don’t buy now, you risk kicking yourself into 2021.
Click here for the 6 professions >>
Want the latest recommendations from Zacks Investment Research? Today you can download 7 best stocks for the next 30 days. Click to get this free report
J.Jill, Inc. (JILL): Free Stock Analysis Report
Foot Locker, Inc. (FL): Free Inventory Analysis Report
Boot Barn Holdings, Inc. (BOOT): Free Stock Analysis Report