[Management View]
J.Jill's management highlighted key metrics, including a 4.9% decline in total company sales and a 5.7% drop in comparable sales. Strategic priorities include disciplined expense controls, inventory alignment, and leveraging investments in core systems.

[Outlook]
The company has withdrawn its full-year guidance due to macroeconomic uncertainty and a CEO transition. Future plans involve assessing opportunities for improvement within the assortment and ramping up the "ship from store" feature.

[Financial Performance]
- Total Company Sales: $154 million, down 4.9% YoY
- Comparable Sales: Decreased 5.7%
- Gross Margin: 71.8%, down 110 basis points
- Adjusted EBITDA: $27.3 million, down from $35.6 million YoY
- Adjusted Net Income Per Diluted Share: $0.88, down from $1.22 YoY

[Q&A Highlights]

Question 1: Given the current macro environment, what did you put in place at J.McLaughlin during cash, and what do you see as the opportunity for J.Jill? What are the underperforming parts of the assortment, and how do you see the merchandise mix evolving for the upcoming holiday season? Are there any other costs related to the OMS cutover that will impact the second or third quarters?

Answer: Mark Webb discussed the tariff exposure, mentioning that the company has assumed a 10% tariff on all countries and 30% on China. J.Jill has reduced its China sourcing to below 5%. The company is working on vendor negotiations and strategic price increases to mitigate tariff impacts. Claire Spofford emphasized the importance of creating meaningful relationships with customers and noted that the lack of newness in the assortment will be addressed. The focus will be on impacting presentations in-store and online, marketing efforts, and showing up for the customer throughout the year. Mark Webb added that the OMS cutover had a slightly larger impact than anticipated, with an extra $0.5 million due to customer-facing issues, which have been addressed.

Question 2: How are you thinking about rolling out units in the second half, considering the tariff dynamics? How do you feel about the inventory position for the fall and holiday season? Can you provide details on ticket and traffic during the quarter?

Answer: Claire Spofford mentioned that the product line is bought through the end of the year, with small adjustments possible. Mark Webb added that Q3 buys have been adjusted to align with current demand trends. Inventory normalization actions will continue, with promotional activity anticipated to clear seasonal stock. The company saw a pullback in demand in April, impacting traffic and AURs. Marketing efforts will focus on supporting the customer file for the long term.

Question 3: What drew you to J.Jill, and what strengths do you see continuing for the business? Are there any categories with opportunities or green shoots? How does the quarter-to-date momentum compare to the first quarter?

Answer: Claire Spofford highlighted the opportunity to build on J.Jill's strong history and drive future growth through multichannel expansion, product assortment elevation, and new category introductions. Mark Webb noted that the slowdown in April coincided with global trade uncertainty, and the May trend continued this pattern. The company is temporarily suspending guidance to allow the new CEO to assess and develop plans.

Question 4: Have you seen any improvements in areas with more seasonal weather, and how are you managing split shipments with the "ship from store" feature?

Answer: Mark Webb stated that there were no major weather impacts in May, and the company is managing shipping costs by ensuring complete shipments. The "ship from store" feature is being piloted and will ramp up in the second half of the year.

Question 5: What are your thoughts on new store openings, and how are the newer stores performing?

Answer: Mark Webb explained that the reduction in new store openings is due to timing and available spaces. The newer stores are performing in line with expectations, and the company remains excited about store growth opportunities. The guidance for store openings has been adjusted due to planning commission and FEMA uncertainties.

[Sentiment Analysis]
Analysts and management maintained a cautious tone, acknowledging the challenges posed by the macroeconomic environment and the need for strategic adjustments. The sentiment was focused on navigating near-term uncertainty while positioning the company for long-term success.

[Quarterly Comparison]
| Metric | Q1 2025 | Q1 2024 |
|---------------------------------|---------------|---------------|
| Total Company Sales | $154 million | $162 million |
| Comparable Sales | -5.7% | N/A |
| Gross Margin | 71.8% | 72.9% |
| Adjusted EBITDA | $27.3 million | $35.6 million |
| Adjusted Net Income Per Share | $0.88 | $1.22 |

[Risks and Concerns]
- Increased uncertainty affecting consumer spending
- Macroeconomic volatility and global trade policy impacts
- Elevated tariff exposures
- Inventory and promotional pressures

[Final Takeaway]
J.Jill faced significant revenue and profit declines in Q1 2025, driven by macroeconomic uncertainty and assortment issues. The company has withdrawn its full-year guidance to allow the new CEO to conduct a comprehensive strategic review. Management is focused on disciplined expense controls, inventory alignment, and leveraging investments in core systems. Despite near-term challenges, J.Jill remains committed to maintaining quarterly dividends and executing opportunistic share repurchases while enhancing its omnichannel capabilities.