J.Jill (NYSE:JILL) reported second-quarter sales growth and higher profitability, citing improved full-price selling, stronger customer acquisition and progress in its product assortment. The company also raised its full-year outlook while saying it plans to reinvest most net tariff refunds into marketing and technology initiatives intended to support growth into 2027.
“Our second quarter results indicate a meaningful step forward and reflect the progress we are making across each of our three strategic priorities: evolving the product assortment, enhancing the customer journey, and advancing the way we work,” CEO and President Mary Ellen Coyne said on the company’s earnings call.
Tariff Refunds Lift Reported Profitability
Gross profit totaled about $119 million and gross margin reached 76.8%, up approximately 840 basis points from the prior-year period. The figures included $13.3 million in net tariff refunds received during the quarter.
Excluding those refunds, gross profit was $105.7 million and gross margin was 68.3%, roughly flat from the prior year. Chief Financial Officer and Chief Operating Officer Mark Webb said a higher full-price gross-margin rate offset a greater mix of markdown sales.
Reported adjusted EBITDA was $32.8 million, compared with $25.6 million in the second quarter of fiscal 2025. Excluding tariff refunds and approximately $600,000 of related strategic investments and costs, underlying adjusted EBITDA was $20.1 million, according to the company.
Adjusted diluted earnings per share were $1.24, compared with $0.81 a year earlier. Interest expense declined to $1.9 million from $2.7 million.
J.Jill generated approximately $46 million of cash from operations during the quarter, including about $19 million related to gross tariff refunds. Excluding the refund impact, cash from operations was approximately $27 million and free cash flow was about $25 million. The company ended the quarter with approximately $77 million in cash and $72 million in funded debt.
Customer File Stabilizes as Product Changes Gain Traction
Coyne said the company’s customer file improved from the start of the year and is beginning to stabilize, supported by increased new-to-brand customer acquisition and reactivation of lapsed customers. She said newer customers are slightly younger, are retaining at a higher rate and are spending more than new customers had historically.
The company attributed some of the improvement to marketing changes, including more refined messaging, customer segmentation and increased activity across channels. J.Jill said its SMS subscriber file continued to grow, while its catalog business improved profitability through a more focused circulation base.
The company is also working to integrate its credit-card and loyalty-program information into a more unified customer view. Coyne said J.Jill is shifting a greater portion of its marketing investment toward prospective and reactivated customers, rather than primarily focusing spending on existing customers.
J.Jill plans to use the majority of tariff-refund proceeds to fund second-half marketing investments, particularly in upper- and middle-funnel initiatives designed to expand awareness and generate demand. Webb said those investments are intended to support some second-half sales growth but are principally “a down payment on the file” and on performance in 2027 and beyond.
Assortment Focus Includes Denim, Color and Simplified Sub-Brands
The company said outerwear and accessories were among its stronger categories during the quarter. Coyne also pointed to early results from the Luxe Lounge collection and a relaunch of the denim assortment.
J.Jill said it is expanding its denim offering beyond its historical slim silhouettes by retaining trusted fits while adding new leg shapes. Coyne cited wide-leg denim and barrel silhouettes as areas receiving customer response. The company also said its bottoms category stabilized in the second quarter, with strength in core products as well as newer silhouettes.
Management said customer feedback indicated a need for more color, prints and assortment breadth. J.Jill has added color and print to top and dress programs for the third and fourth quarters, following what Coyne described as an overly neutral assortment earlier in the year.
The retailer is also consolidating best-selling Wearever items into its core assortment. Coyne said the move is intended to simplify the product lineup and reallocate investment to categories such as Luxe Lounge, travel capsules and denim. Pure Jill remains a priority within the company’s sub-brand portfolio.
J.Jill is investing in an AI-enabled merchandise planning and allocation system that is expected to begin launching later this year. The company is also advancing digital-platform and personalization investments, with some technology projects being accelerated into fiscal 2026 using tariff-refund proceeds.
Company Raises Full-Year Outlook
For the third quarter, J.Jill expects sales to increase 3% to 5%, comparable sales to rise 1% to 3%, and adjusted EBITDA to range from $20 million to $22 million. The company expects gross margin to be approximately flat from the prior-year quarter.
Management now estimates tariff rates on goods landed in the second half will range from 10% to 12.5%. Second-half tariff costs at current rates are expected to be about $1 million lower than the company’s previous expectation and lower than the prior year beginning in the fourth quarter.
- Full-year adjusted EBITDA: $75 million to $80 million
- Full-year sales growth: Flat to up 2% from the prior year
- Comparable sales: Down 1% to up 1%
- Gross-margin change: Up 100 to 150 basis points, partly reflecting tariff refunds
- Capital expenditures: $20 million to $25 million
- Free cash flow: Approximately $40 million
J.Jill expects to open one to three net new stores during the year, including two planned for the third quarter. The company reduced its store-opening outlook because landlord delivery delays are expected to push two planned openings into early 2027. J.Jill ended the second quarter with 255 stores, compared with 247 stores a year earlier.
The company repurchased approximately 100,000 shares for $1.5 million during the quarter, bringing year-to-date repurchases to 168,000 shares for $2.3 million. About $11.8 million remained under its $25 million repurchase authorization at quarter-end. J.Jill also said its board approved a quarterly dividend of $0.09 per share, payable Oct. 7 to shareholders of record as of Sept. 23.
About J.Jill (NYSE:JILL)
J.Jill is a women’s apparel retailer specializing in modern, versatile clothing and accessories. The company designs and markets a range of products that emphasize comfort and style, including knitwear, woven tops, pants, dresses, outerwear, jewelry, and footwear. Through its in-house design team, J.Jill focuses on creating seasonal collections that appeal to women seeking effortless, mix-and-match wardrobes.
Products are sold through a multi-channel distribution network comprising company-operated boutiques, e-commerce platforms, and catalog sales.
