J.Jill(NYSE:JILL) reported its results for the second quarter of the fiscal year. Results for the second quarter of fiscal 2025, reported on September 3, 2025, included net sales of $154 million (down 0.8% compared to the same period in fiscal year 2024), adjusted EBITDA of $25.6 million, and free cash flow generation of $17 million. Management executed significant inventory clearance and operational investment despite facing increased supply chain pressures, and provided adjusted EBITDA guidance of $18 million to $22 million for the third quarter, reflecting continued tariff headwinds and cautious promotional expectations. The following insights detail key strategic initiatives, risk factors, and capital allocation progress impacting the long-term outlook.
J.Jill accelerates omnichannel investments and store expansion
The company rolled out ship-from-store fulfillment capabilities chainwide, completing its first major omnichannel (retail and direct-to-consumer) system implementation following its Order Management System (OMS) upgrade, which will help optimize inventory utilization and meet previously unfillable demand. End-of-quarter store count reached 247, with guidance reaffirmed for 1–5 net new openings this fiscal year and a longer-term target of 50 store openings by the end of 2029.
“The team did a great job in executing the implementation of Order Management System (OMS), and we are pleased to share that we launched the new ship-from-store capabilities well ahead of plan and in time for the fall and winter season launches. As we continue to evolve the brand and progress forward, we are in the office collaborating with one another. There’s a palpable energy across the organization.”
— Mary Coyne, Chief Executive Officer and President
Faster-than-expected technology and capability deployment signal improved execution, positioning J.Jill to unlock operational efficiencies and support scalable sales growth across retail and digital platforms.
Tariffs drive material margin pressure for J.Jill
Gross margin (GAAP) declined 210 basis points year-over-year to 68.4%, with $5 million in incremental quarterly tariff costs expected to persist if current policies remain, as assumed in third quarter guidance, which would annually equate to approximately $20 million if current tariff rates persist. Tariffs on J.Jill’s largest sourcing markets have increased to an average of 20% (with India at 50%) for the third quarter, compared with prior assumptions of 10% across all countries, amplifying cost-of-goods-sold and compressing earnings leverage.
“With respect to tariffs, rates for our largest sourcing countries have landed on average around 20%, with India now at 50%. This compares to our prior assumption of 10% on all countries and 30% on China. Given these elevated rates, our guidance for the third quarter assumes approximately $5 million of incremental impact from tariffs, net of vendor-negotiated offsets. We would assume a similar level going forward on a quarterly basis should current tariff policies remain in place.”
— Mark Webb, Chief Financial Officer
Persistent elevated tariff rates substantially erode J.Jill’s gross margin profile and limit upside to EBITDA until effective mitigation strategies or policy changes are realized.
J.Jill launches strategic initiatives to expand and retain its customer base
CEO Mary Coyne outlined a multi-pronged growth strategy focused on broadening the product assortment, enhancing the customer journey, and leveraging a robust, affluent existing demographic; 46% of sales came from direct-to-consumer channels, indicating a balanced omnichannel model. The company is also piloting new marketing approaches, including localized television advertising, updating its loyalty rewards program beyond its current private-label credit card, and refining in-store merchandising to modernize its image and increase conversion.
“To do this, we must expand our customer file, attracting a significant number of new customers, re-engaging those who have shopped with us before, and continuing to delight our existing loyal customer base. In the near term, we plan to move quickly but thoughtfully, testing new initiatives and leaning into those that work to deliver on our objectives, and widening the aperture of our focus to appeal to a broader audience.”
— Mary Coyne, Chief Executive Officer and President
Meaningful efforts to broaden market reach, refresh product and brand positioning, and revamp rewards should fortify customer acquisition and retention, critical for sustaining long-term revenue growth amid external industry volatility.
Looking Ahead
J.Jill expects adjusted EBITDA of $18 million to $22 million for the third quarter, with sales projected to be flat to down low single digits year-over-year and comparable sales expected to be down low to mid-single digits (guidance); gross margin pressure will intensify due to ongoing tariff impacts estimated at $5 million per quarter. Management anticipates capital expenditures between $20 million and $25 million for the fiscal year, with plans to open two new stores in Q3 and maintain dividend and share repurchase commitments. Forward guidance is constrained by macroeconomic uncertainty, customer price sensitivity, and unpredictable U.S. tariff policies.
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