Investment Thesis
J.Jill demonstrates strong gross margins (68.7%) and excellent ROE (23%), but faces significant operational deterioration with net income declining 29.4% despite only 2.3% revenue decline, indicating severe margin compression. Weak liquidity metrics (0.54x quick ratio) and declining profitability trends warrant caution pending operational stabilization.
Strengths
- Strong gross margin of 68.7% reflects pricing power and manufacturing efficiency
- Excellent ROE of 23% demonstrates effective capital deployment and profitability relative to shareholder equity
- Positive operating cash flow ($42.1M) and free cash flow ($25.2M) provide financial flexibility despite profitability challenges
- Moderate leverage at 0.59x debt-to-equity ratio with adequate interest coverage (4.9x)
Risks
- Net income collapsed 29.4% YoY while revenue declined only 2.3%, indicating severe margin compression and operational inefficiency
- Critically weak quick ratio of 0.54x and minimal current ratio of 1.08x suggest liquidity stress and heavy inventory reliance
- Declining top-line revenue in apparel retail sector signals demand weakness or market share erosion in competitive industry
Key Metrics to Watch
- Operating expense ratio and net margin recovery trajectory
- Inventory turnover and quick ratio improvement
- Revenue growth stabilization and same-store sales trends
Financial Metrics
Revenue
596.5M
Net Income
27.9M
EPS (Diluted)
$1.82
Free Cash Flow
25.2M
Total Assets
450.2M
Cash
41.0M
Profitability Ratios
Gross Margin
68.7%
Operating Margin
8.5%
Net Margin
4.7%
ROE
23.0%
ROA
6.2%
FCF Margin
4.2%
Balance Sheet & Liquidity
Current Ratio
1.08x
Quick Ratio
0.54x
Debt/Equity
0.59x
Debt/Assets
73.0%
Interest Coverage
4.85x
Long-term Debt
71.4M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-04-11T21:45:23.584372 |
Data as of: 2026-01-31 |
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