J.Jill, Inc. (NYSE:JILL) Q4 2023 Earnings Call Transcript

Mark Webb: And Dana, I’ll quickly hit the second part of your question. The great thing for us is that when the disruptions started happening back in the COVID timeframe, we created a taskforce inside the company that really came together and managed that uncertainty quite well. And we’ve kept that process going, even as things started to calm down post-COVID and through the last year or so. The team is led by an incredible senior manager within the group and a great cross-functional team who reacts very quickly and meets weekly. And so, when the Red Sea issues started popping up, they were poised and ready to react. It doesn’t mean it doesn’t have an impact, which is why we called it out, but internally, we were more prepared than ever just given the effort that we put against it.

The delays that we’re seeing have calmed down to some extent. The initial – it’s always an initial uncertainty that creates longer delays. The delays have settled down. The teams are working on every opportunity to offset them. Those include if we need to air freighting goods from the ports of origin to landed in the US, that’s a team of merchants and merch planners who pore over those decisions and make them based on the relative importance of the late style to the floor set or the marketing or some combination. And then the other options are to work with our great vendor base, which we’ve talked at length about the great relationships we have and see where we can move shipment dates early to compensate for any delays. And then the last sort of element is if we do get a delayed shipment here, we will make the decision whether to expedite via air freight to our West Coast stores as needed.

The Q2 timeframe and why we called it out is that’s our important quarter, with Mother’s Day, and those assortments are more likely warranting of the expedited air freight option than others. And we land those products in Q1, but we sell them through Q2, which is why we called out that that is the quarter that would feel the impact most. We are assuming that the issues sort of stabilize and don’t worsen through the rest of the year. So, that’s an assumption that we’ve made. And the cotton costs, that really started to come in late last year. We mentioned it in some of our earnings calls. We expect that to help defray the cost and uncertainty from the Red Sea through that second quarter timeframe. And really, with respect to the guidance that we provided for the year, the assumptions are, we’ll always, and the merchant teams and planning teams do always look at strategic opportunities for price opportunities raising or decreasing based on market, our product, et cetera, that continues.

But really, for the most part, the guide that we provided implies that pricing is pretty stable, and that units would be the driver of the sales range that we provided on the back of the initiatives that we’re investing in, the marketing efforts that we’re taking, and the benefits that will accrue from the technology as we’ve implemented it.

Dana Telsey: Got it. Thank you. And one question on the store openings. Are you closing stores and malls and opening an open air, anything in terms of regions, locations in terms of what you’re doing? And is the store size at all changing, cost to open versus what had been done in the past, given you hadn’t been a new store opener in a long time till now?

Claire Spofford: Yes, I’ll take the first part and then hand it over to Mark. We prefer lifestyle centers. It’s what our customer prefers, but they’re obviously malls that are very important. And to the extent that we have exited locations that are high potential, we’ll look at malls as well as lifestyle centers, but certainly have a bias there. And as Mark said, the store openings will be weighted toward the back half of the year, and the store closures will be weighted toward the front half of the year. So, and then on the cost, Mark, I don’t know if you want to address it.