J. Jill Stock Plunges 50% on Slashed Q3 Guidance

On Thursday, shares of women’s apparel retailer J. Jill Inc. JILL are plunging today, down over 50% to $ 4.86 per share in morning trading on the heels of the company’s recent updates to its third quarter fiscal 2017 guidance.

J. Jill now expects total company comparable sales in the range of -3% to -5%, and a moderate decline in gross margin when compared to last year. The retailer also anticipated GAAP diluted EPS of 7 cents to 9 cents and adjusted diluted EPS between 8 cents to 10 cents for Q3.

“We have experienced a lower than expected sales trend across both our retail and direct channels, and are updating our guidance for the quarter. We have been assessing the change in trend and have identified product and marketing calendar issues that are affecting traffic and conversion, and we are reacting quickly,” said President and CEO Paula Bennett.

“Given our long track record of consistent sales and earnings growth driven by a strong connection with our customers, we are very disappointed with our soft sales trend. I am confident in the actions we are taking to regain momentum and once again delight our customer with the product and service experience she expects from us,” she continued.

The company said that it would provide investors and analysts a revised outlook for its full-year fiscal 2017 when its reports third quarter results on December 5.

Known for its popular catalog, J. Jill is a retailer that caters to women between the ages of 40 and 65, with product that is both trendy and relaxed. It has a unique business model: over 40% of its total revenues before the company went public came from sales driven by its catalog and website, and its strong direct-to-consumer model has helped foster a loyal customer base.

J. Jill currently has a P/E of 11.94, and is actually cheaper than its broader industry, Retail-Apparel Shoes, which sits in the top 34% of all industries ranked on the Zacks Industry Rank. While its valuation has declined significantly since its IPO, J. Jill could still be considered a value retail pick based on both the product it sells and how it sells its product.

J. Jill is not your average mall retailer, and with shares now below the five-dollar mark, value investors may want to take another look at a company with impressive customer loyalty and strong footing in e-commerce and direct-to-consumer.

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