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Bear of the Day: J.Jill (JILL)

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J.Jill, Inc. (JILL - Free Report) is among the apparel retailers getting hit hard by the coronavirus lock down. This Zacks Rank #5 (Strong Buy) is now expected to see a big earnings loss this year.

J.Jill is a women's apparel retailer with 280 stores nationwide and an e-commerce website.

A Big Miss in the Fiscal First Quarter

On July 28, J.Jill reported its fiscal first quarter 2021 results and missed on the Zacks Consensus by 441%. Earnings were a loss of $0.65 compared to the Zacks Consensus of a loss of $0.12.

Its stores were closed due to the coronavirus lock down beginning in mid-March and started reopening in May. As of July 28, all of its stores had reopened.

Net sales fell $85.5 million to $91 million compare to $176.5 million in the year ago period.

However, due to the closure, it's not releasing same-store-sales comps for the quarter.

Like all other retailers, its online business jumped in the quarter, with direct to consumer representing 61.4% of total net sales, up from 41.9% in the first quarter of the prior year.

Gross margin fell to 55.1% from 65.9% a year ago. There was a $5.2 million charge related to potential future liability payments, which negatively impacted gross margin by 570 basis points.

Forbearance Extended Again

On June 15, 2020, J.Jill entered into two Forbearance Agreements with the lenders under its ABL and term loan credit facilities.

It's currently in negotiations with its lenders.

The time for that extension has now been extended until Aug 27, 2020. But it keeps getting extended 2 weeks as the negotiations continue.

Estimates Cut for Fiscal 2021

It's a tough time for most apparel retailers this year.

Zacks only has one estimate on J.Jill, but it's been cut over the last 30 days for the full year.

The Zacks Consensus Estimate is now calling for a loss of $1.13, which is down from a loss of $0.36 just a month ago.

It made $0.06 last year so that's a 1,983% earnings decline.

Shares Sink Further

J.Jill shares were already down big on the year but over the last month they've sunk further, losing another 45%.



They now trade well under $1 and have been since early June.

J.Jill could not give guidance given the uncertainty surrounding COVID-19.

For investors interested in buying a specialty retailers, look for opportunities in footwear.

Foot Locker, Inc. (FL - Free Report) and Boot Barn Holdings, Inc. (BOOT - Free Report) are two to keep on your short list. Both are Zacks Rank #3 (Hold) stocks.

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