J.Jill, Inc. (JILL): Results of Operations and Financial Condition
J.Jill, Inc. (JILL) filed an SEC Form 8-K — Results of Operations and Financial Condition. EXHIBIT 99.1 J.JILL, INC. ANNOUNCES SECOND QUARTER 2026 RESULTS Q2 FY26 Net Sales Increased 0.5% to $154.8 Million vs. Q2 FY25 Q2 FY26 Gross Margin of 76.8%, Includes $13.3 Million IEEPA Tariff Refund Pre-Tax Net Benefit Raises FY26 Outlook Quincy, Mass – September 9, 2026 – J.Ji
How this was made
The 30-second read
Why it matters
The earnings beat may trigger a modest price rally, but investors should watch SG&A growth and store count changes.
Market read
First‑report earnings with improved margins provide a short‑term trading opportunity.
What to watch
Higher SG&A and store lease costs could pressure future profitability if sales do not accelerate.
Q2 FY26 Net Sales Increased 0.5% to $154.8 Million vs. Q2 FY25; Q2 FY26 Gross Margin of 76.8%, Includes $13.3 Million IEEPA Tariff Refund Pre-Tax Net Benefit; Raises FY26 Outlook
Second-quarter sales and comparable sales returned to growth and reported profitability increased sharply, but the $13.3 million net tariff-refund benefit was material. Excluding the net impact of tariff refunds, adjusted EBITDA was below the prior-year level, while first-half sales, comparable sales, operating income and adjusted EBITDA declined.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, thirteen weeks ended August 1, 2026GAAP | $154.8 million | – | increased 0.5% |
| Total company comparable sales, thirteen weeks ended August 1, 2026other | increased by 0.5% | – | increased by 0.5% |
| Direct to consumer net sales mix, thirteen weeks ended August 1, 2026other | 47.1% of net sales | – | – |
| Direct to consumer net sales, thirteen weeks ended August 1, 2026other | up 1.9% | – | up 1.9% |
| Gross profit, thirteen weeks ended August 1, 2026GAAP | $119.0 million | – | – |
| Gross margin, thirteen weeks ended August 1, 2026GAAP | 76.8% | – | – |
| Gross margin excluding receipt of net tariff refunds, thirteen weeks ended August 1, 2026other | 68.3% | – | – |
| Selling, general and administrative expenses, thirteen weeks ended August 1, 2026GAAP | $94.6 million | – | – |
| SG&A as a percentage of total net sales, thirteen weeks ended August 1, 2026GAAP | 61.1% | – | – |
| Operating income, thirteen weeks ended August 1, 2026GAAP | $24.3 million | – | – |
| Operating income margin, thirteen weeks ended August 1, 2026GAAP | 15.7% | – | – |
| Adjusted Income from Operations, thirteen weeks ended August 1, 2026non-GAAP | $27.1 million | – | – |
| Interest expense, thirteen weeks ended August 1, 2026GAAP | $1.9 million | – | – |
| Interest income, thirteen weeks ended August 1, 2026GAAP | $1.1 million | – | – |
| Income tax provision, thirteen weeks ended August 1, 2026GAAP | $6.7 million | – | – |
| Effective tax rate, thirteen weeks ended August 1, 2026GAAP | 28.6% | – | – |
| Net income, thirteen weeks ended August 1, 2026GAAP | $16.8 million | – | – |
| Net income per diluted share, thirteen weeks ended August 1, 2026GAAP | $1.11 | – | – |
| Adjusted net income, thirteen weeks ended August 1, 2026non-GAAP | $18.7 million | – | – |
| Adjusted net income per diluted share, thirteen weeks ended August 1, 2026non-GAAP | $1.24 | – | – |
| Adjusted EBITDA, thirteen weeks ended August 1, 2026non-GAAP | $32.8 million | – | – |
| Adjusted EBITDA margin, thirteen weeks ended August 1, 2026non-GAAP | 21.2% | – | – |
| Adjusted EBITDA excluding net impact of tariff refunds, thirteen weeks ended August 1, 2026non-GAAP | $20.1 million | – | – |
| Adjusted EBITDA excluding net impact of tariff refunds margin, thirteen weeks ended August 1, 2026non-GAAP | 13.0% | – | – |
| Net sales, twenty-six weeks ended August 1, 2026GAAP | $299.3 million | – | decreased 2.7% |
| Total company comparable sales, twenty-six weeks ended August 1, 2026other | decreased by 4.2% | – | decreased by 4.2% |
| Direct to consumer net sales mix, twenty-six weeks ended August 1, 2026other | 46.4% of net sales | – | – |
| Direct to consumer net sales, twenty-six weeks ended August 1, 2026other | decreased 3.2% | – | decreased 3.2% |
| Gross profit, twenty-six weeks ended August 1, 2026GAAP | $217.7 million | – | – |
| Gross margin, twenty-six weeks ended August 1, 2026GAAP | 72.7% | – | – |
| Gross margin excluding receipt of net tariff refunds, twenty-six weeks ended August 1, 2026other | 68.3% | – | – |
| Operating income, twenty-six weeks ended August 1, 2026GAAP | $33.0 million | – | – |
| Net income, twenty-six weeks ended August 1, 2026GAAP | $21.5 million | – | – |
| Net income per diluted share, twenty-six weeks ended August 1, 2026GAAP | $1.43 | – | – |
| Adjusted EBITDA, twenty-six weeks ended August 1, 2026non-GAAP | $49.5 million | – | – |
| Adjusted EBITDA margin, twenty-six weeks ended August 1, 2026non-GAAP | 16.6% | – | – |
| Adjusted EBITDA excluding net impact of tariff refunds, twenty-six weeks ended August 1, 2026non-GAAP | $36.8 million | – | – |
third quarter of fiscal 2026 and full year fiscal 2026 outlook
- RevenueThird quarter Net Sales to be up 3% to 5% compared to fiscal 2025
- Gross marginThird quarter gross margin to be about flat compared to fiscal 2025
- NoteThird quarter Comparable Sales to be up 1% to up 3% compared to fiscal 2025
- NoteThird quarter Adjusted EBITDA of $20.0 million to $22.0 million
- NoteFull year Net Sales to be flat to up 2% compared to fiscal 2025
- NoteFull year Comparable Sales to be down 1% to up 1% compared to fiscal 2025
- NoteFull year gross margin to be up 100 basis points to 150 basis points
- NoteFull year Adjusted EBITDA to be $75 million to $80 million
- NoteFull year Free cash flow to be approximately $40 million
- NoteFull year Total capital expenditures of approximately $20 million to $25 million
- NoteFull year Net new store growth of approximately 1 to 3 new stores
- NoteOutlook assumes an average 10% to 12.5% tariff rate for the remainder of fiscal 2026, resulting in approximately $1.0 million of favorability in the second half of the year compared to prior assumptions.
Capital returns
- During the thirteen weeks ended August 1, 2026, the Company repurchased 99,902 shares of its common stock for an aggregate purchase price of $1.5 million.
- During the twenty-six weeks ended August 1, 2026, the Company repurchased 168,402 shares of its common stock for an aggregate purchase price of $2.3 million.
- As of August 1, 2026, the Company had $11.8 million remaining under its currently authorized $25.0 million share repurchase program, which expires December 6, 2026.
- On June 3, 2026 the Board declared a quarterly cash dividend of $0.09 per share, payable on July 8, 2026 to stockholders of record as of June 24, 2026.
- On September 2, 2026, the Board declared a cash dividend of $0.09 per share, payable on October 7, 2026 to stockholders of record as of September 23, 2026.
What drove it
- Second-quarter net sales increased 0.5% and total company comparable sales increased by 0.5%.
- Direct to consumer net sales were up 1.9% and represented 47.1% of net sales in the second quarter.
- Gross margin included $13.3 million of net tariff refunds in the second quarter of fiscal 2026.
- The Company stated that its customer file is stabilizing and new-to-brand acquisition is accelerating.
- The Company expects to deploy tariff refunds toward investments primarily focused on marketing to build the brand and accelerate file growth, relatively evenly split between the third and fourth quarters.
- The Company did not open or close any stores in the second quarter. Store count was 255 stores, compared to 247 stores at the end of the second quarter of fiscal 2025.
Concerns
- For the twenty-six weeks ended August 1, 2026, net sales decreased 2.7% and total company comparable sales decreased by 4.2%.
- For the twenty-six weeks ended August 1, 2026, direct to consumer net sales decreased 3.2%.
- SG&A as a percentage of total net sales was 61.1% in the second quarter, compared to 57.5% in the prior-year quarter.
- The SG&A increase was primarily driven by eight net new stores compared to prior year, store lease renewals, marketing, shipping costs and management incentive accruals.
- Adjusted EBITDA excluding net impact of tariff refunds was $20.1 million in the second quarter, compared to $25.6 million in the prior-year quarter.
- Adjusted EBITDA excluding net impact of tariff refunds was $36.8 million for the twenty-six weeks ended August 1, 2026, compared to $52.9 million in the prior-year period.
- The outlook assumes an average 10% to 12.5% tariff rate for the remainder of fiscal 2026.
What to watch
- Third-quarter net sales outlook of up 3% to 5% compared to fiscal 2025.
- Third-quarter comparable sales outlook of up 1% to up 3% compared to fiscal 2025.
- Third-quarter adjusted EBITDA outlook of $20.0 million to $22.0 million.
- Full-year gross-margin outlook of up 100 basis points to 150 basis points.
- Full-year adjusted EBITDA outlook of $75 million to $80 million.
- Marketing investments funded by tariff refunds and their stated objective of building the brand and accelerating file growth.
- Full-year net new store growth outlook of approximately 1 to 3 new stores.
Balance sheet and cash flow
- Cash and cash equivalents at August 1, 2026: $76.9 million.
- Current portion of long-term debt at August 1, 2026: $1,313 (Amounts in thousands).
- Long-term debt, net of discount and current portion at August 1, 2026: $71,205 (Amounts in thousands).
- Inventory at the end of the second quarter of fiscal 2026: $52.6 million, compared to $55.3 million at the end of the second quarter of fiscal 2025.
- Net cash provided by operating activities for the thirteen weeks ended August 1, 2026: $46.3 million, compared to $19.4 million for the thirteen weeks ended August 2, 2025.
- Free cash flow for the thirteen weeks ended August 1, 2026: $44.0 million, compared to $16.6 million for the thirteen weeks ended August 2, 2025.
- Net cash provided by operating activities for the twenty-six weeks ended August 1, 2026: $48.0 million, compared to $24.7 million for the twenty-six weeks ended August 2, 2025.
- Free cash flow for the twenty-six weeks ended August 1, 2026: $42.9 million, compared to $19.2 million for the twenty-six weeks ended August 2, 2025.
- Net cash provided by operating activities in both the thirteen and twenty-six weeks benefited from $19.0 million of gross tariff refunds including associated interest income.
- Capital expenditures for the thirteen weeks ended August 1, 2026: $2.2 million, compared to $2.8 million for the thirteen weeks ended August 2, 2025.
- Capital expenditures for the twenty-six weeks ended August 1, 2026: $5.0 million, compared to $5.5 million for the twenty-six weeks ended August 2, 2025.
Analysis
J.Jill reported modest second-quarter top-line growth, with net sales of $154.8 million, up 0.5%, and total company comparable sales up 0.5%. Direct to consumer net sales rose 1.9% and represented 47.1% of net sales. The first-half picture remained weaker, however: net sales decreased 2.7%, comparable sales decreased 4.2%, and direct to consumer net sales decreased 3.2% for the twenty-six weeks ended August 1, 2026.
Reported profitability was substantially higher in the quarter because gross margin was 76.8%, compared with 68.4%, and operating income was $24.3 million, compared with $16.8 million. These results included $13.3 million of net tariff refunds. Gross margin excluding the tariff refunds was 68.3%, while adjusted EBITDA excluding the net impact of tariff refunds was $20.1 million, compared with $25.6 million in the prior-year quarter. SG&A increased to $94.6 million and reached 61.1% of sales, with the company citing net new stores relative to the prior year, lease renewals, marketing, shipping costs and management incentive accruals.
First-half profitability remained below the prior-year period despite the tariff-refund benefit. Operating income was $33.0 million compared with $35.8 million, net income was $21.5 million compared with $22.2 million, and adjusted EBITDA was $49.5 million compared with $52.9 million. Adjusted EBITDA excluding the net impact of tariff refunds was $36.8 million, compared with $52.9 million. Interest expense declined to $3.8 million from $5.5 million for the twenty-six-week period, while interest income included $0.6 million related to the receipt of tariff refunds.
Cash generation was strong on a reported basis. Second-quarter operating cash flow was $46.3 million and free cash flow was $44.0 million, with both periods benefiting from $19.0 million of gross tariff refunds including associated interest income. Cash and cash equivalents were $76.9 million at quarter-end. The company repurchased 168,402 shares for $2.3 million during the twenty-six weeks and had $11.8 million remaining under its $25.0 million authorization. It also declared quarterly cash dividends of $0.09 per share in June and September.
Management raised its full-year fiscal 2026 outlook and guides to net sales flat to up 2%, comparable sales down 1% to up 1%, gross margin up 100 basis points to 150 basis points, adjusted EBITDA of $75 million to $80 million and free cash flow of approximately $40 million. Third-quarter guidance calls for net sales up 3% to 5%, comparable sales up 1% to up 3%, gross margin about flat and adjusted EBITDA of $20.0 million to $22.0 million. The outlook includes tariff refunds and the deployment of those refunds toward marketing investments, and assumes an average 10% to 12.5% tariff rate for the remainder of fiscal 2026.
Management, verbatim
Our second quarter results reflect progress across each of our three strategic priorities – evolving the product assortment, enhancing the customer journey, and advancing the way we work.
Mary Ellen Coyne, President and Chief Executive Officer of J.Jill, Inc.
We delivered sales that exceeded our expectations, with underlying profitability at the high end of our outlook before the benefit of tariff refunds.
Mary Ellen Coyne, President and Chief Executive Officer of J.Jill, Inc.
Our customer file is stabilizing, new-to-brand acquisition is accelerating, and our senior team is in place and executing.
Mary Ellen Coyne, President and Chief Executive Officer of J.Jill, Inc.
Not in the filing
stated, not guessed- Previous-release outlook was not provided; therefore, comparison of reported results with prior guidance is unavailable.
- Prior-quarter comparisons for reported second-quarter metrics were not provided.
- Dollar revenue for the direct to consumer channel was not provided.
- Reportable segment revenue was not provided.
- Debt balance at the end of the second quarter of fiscal 2025 was not provided.
- Third-quarter and full-year operating-expense guidance was not provided.
- Third-quarter and full-year tax-rate guidance was not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
J.Jill filed a Form 8‑K reporting Q2 FY26 results, highlighting a 0.5% sales increase and a 13.3 M tariff refund.
Ticker impact
Q2 FY26 earnings released via 8‑K showing modest sales growth, higher gross margin and increased net income.
Potential short‑term upside of 3‑5% as investors digest improved profitability.
The report contains fresh numbers not previously public, with margin expansion and net income up ~60% YoY, which typically supports a price rally.
Market effects
Retail apparel sector may see modest uplift as J.Jill demonstrates margin resilience.
U.S. consumer discretionary stocks could benefit from the earnings beat.
Limited to U.S. markets; no direct global macro effect.
Counterpoint
Margin boost is partially due to a one‑time tariff refund; underlying sales remain flat.
Key entities
- ExecutiveMary Ellen Coyne
President and CEO of J.Jill, quoted in the filing.
