JJill Inc at Goldman Sachs Global Retailing Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Brooke Roach - Goldman Sachs & Co. LLC - Analyst : I was hoping that you could speak a little bit to the significant change that J. Jill has gone through over the course of the past few years since you both joined the company. I guess, what's the most important structural changes that are long lasting that you've executed on? And then as you look ahead, what are your near-term priorities?

Question: Brooke Roach - Goldman Sachs & Co. LLC - Analyst : And the market, the priorities, if you look ahead.

Question: Brooke Roach - Goldman Sachs & Co. LLC - Analyst : That's really helpful color. Claire, you spoke -- you started out the conversation talking about your customer and the product that she loves from you. Maybe we can speak for a moment about your approach to newness and innovation. How are you surprising here with something new? What is J. Jill's approach here?

Question: Brooke Roach - Goldman Sachs & Co. LLC - Analyst : It's really helpful color. Thank you. Your marketing has been a bigger focus of your organization and for the brand. What investments are you making to drive that consumer awareness? How does that show up in marketing spend? And then Mark, maybe you could also weigh in here and speak about the run rate percent of sales that you think is appropriate on this initiative as you exit the year and what that could look like longer term?

Question: Brooke Roach - Goldman Sachs & Co. LLC - Analyst : You mentioned new store openings a couple of times now, so let's pivot to that. As you move from a store closure posture to a posture of store opening, what criteria are you using to select your locations? How should investors think about the cadencing of that potential store growth? And what would cause you to choose to accelerate your store opening plans?

Question: Brooke Roach - Goldman Sachs & Co. LLC - Analyst : On those re-entry markets that you spoke about, what have you learned as you reopen the store in making sure that that store opens more efficiently and more productively? Are you marketing to your customer in a different way when you come back to that market? Talk to us about that strategy.

Question: Brooke Roach - Goldman Sachs & Co. LLC - Analyst : You mentioned POS systems, but you also have an OMS system that you're also rolling out. And both of these have unlocks for your business. Can you speak to what opportunities you see across both of those with the technology initiatives that you have underway and then speak to the timing and cadence that we should expect for seeing those benefits?

Question: Brooke Roach - Goldman Sachs & Co. LLC - Analyst : Great to see those technology initiatives get rolled out to the stores and to help your customer. Maybe just to wrap up the store discussion for now, Mark, can you tell us about the profitability of your store base today? What do you expect regarding four-wall margins of some of the new stores that you opened relative to your current fleet and the bell curve that you have of those today? And what does the cadence of maturation of stores that you expect?

Question: Brooke Roach - Goldman Sachs & Co. LLC - Analyst : Before we switch to margins, let's touch base on a topic that's been top of mind for a lot of investors, which is the health of the consumer. How would you describe the health of the J. Jill customer today? Are you seeing any changes in how she behaves, whether that's traffic conversion or ticket as you've entered the early fall season?

Question: Brooke Roach - Goldman Sachs & Co. LLC - Analyst : Can you talk a little bit more about consumer preferences within your business? We have heard a lot of discussion around category shifts. And what consumers are engaging with and why, curious to see what you're seeing between your different sub-brands and product categories in your store, maybe specifically address denim and maybe other -- some of the other wallet share shift categories like active?

Question: Brooke Roach - Goldman Sachs & Co. LLC - Analyst : Really helpful. We're asking all companies to attend our conference a couple of questions. And so perhaps now is the time to get a couple of these out of the way, given that we're on topic. First is on the outlook. What are your expectations in the second half of '24 relative to your recent results? Do you expect things to be same, better, or worse?

Question: Brooke Roach - Goldman Sachs & Co. LLC - Analyst : And from a value-seeking perspective, to spend another trend that we've heard from other retailers that this consumer is seeking value, do you think that this -- A, are you seeing the trend? And B, do you believe that this is a function of a cyclical or a secular trend?

Question: Brooke Roach - Goldman Sachs & Co. LLC - Analyst : Another question that we're asking all companies is on promotions. You mentioned a small step-up in surgical promotions, but how do you see -- how are you planning promotional breadth and depth this year for the holiday relative to last year? And does that differ relative to the industry?

Question: Brooke Roach - Goldman Sachs & Co. LLC - Analyst : It's really helpful color. Related to promotions is how quickly you're turning your inventory? You spoke a little bit about this earlier, but let's put up a finer point on it. Is there more room for inventory turn improvement ahead and how should we be thinking about the cadence of inventory turn expansion from here?

Question: Brooke Roach - Goldman Sachs & Co. LLC - Analyst : That's really helpful. And as we think about your margin structure today, can you talk us through some of the puts and takes of the gross margins that you're expecting? What is your outlook for costs as we move into next year? Do you think that the cost pressures might be better, the same, or worse?

Question: Brooke Roach - Goldman Sachs & Co. LLC - Analyst : And then as you think about putting that together with all the different initiatives that you have, you have high-teens EBITDA margin, what does that look like over the course of the next few years? Is there room for additional expansion? Or do you think that reinvesting in the business to drive top line growth is a more appropriate way to think about?

Question: Brooke Roach - Goldman Sachs & Co. LLC - Analyst : Excellent. We're about out of time. Any closing remarks or things that we haven't touched upon that you think you'd like to share with the audience? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 6:35PM, JILL.N - JJill Inc at Goldman Sachs Global Retailing Conference