The J. Jill Group, Inc (Nasdaq: JILL) today reported financial results for the second quarter ended June 24, 2000. Net sales for the second quarter were $52.1 million compared to $78.0 million reported in the prior year. Included in the prior year is $12.7 million in net sales from the Nicole Summers catalog concept that was discontinued during fiscal 1999. Excluding sales from Nicole Summers, J. Jill realized standalone net sales of $51.7 million for the second quarter compared to $65.3 million last year. Operating income for the quarter totaled $4.0 million or 7.6 per cent of net sales compared to $6.7 million or 8.5 per cent of net sales last year. Net income for the period was $2.2 million or $0.21 per diluted share versus net income of $3.8 million or $0.36 per diluted share in the comparable period last year.

For the six months ended June 24, the company recorded net sales of $101.4 million compared to $142.8 million in the prior year. Excluding sales from the discontinued Nicole Summers catalog concept, J. Jill realized net sales of $100.1 million this year compared to $117.9 million last year. Operating income for the six-month period was $5.5 million or 5.5 per cent of net sales compared to $9.2 million or 6.5 per cent of net sales in the prior year. Net income for the period was $2.9 million or $0.28 per diluted share versus $5.1 million or $0.48 per diluted share in the comparable period last year.

Gordon R. Cooke, president and chief executive officer, commented, ``Our fiscal 2000 performance to date indicates that we have stabilized our catalog business. The changes we made to our creative execution in partnership with more targeted and consequently more efficient catalog mailings have resulted in an improved response rate to our core J. Jill catalog. In addition, during the second quarter we experienced strong pure product margins as well as productivity improvements in our variable expense structure, particularly in our operations and fulfillment facility in Tilton, New Hampshire.''

Mr. Cooke concluded, ``During the second quarter of fiscal 2000 we made great strides in our efforts to build our highly successful J. Jill catalog concept into a national lifestyle brand through the execution of a multi-channel distribution strategy. Our e-commerce website, www.jjill.com continues to be met with strong customer response. For the six months ended June 24, website net sales were $12.4 million representing 13 per cent of our total direct channel volume. Also during the quarter, we successfully opened five additional specialty retail stores bringing our total store count to seven. The new stores are located in Water Tower Place in Chicago, Illinois, Mall of America in Minneapolis, Minnesota, Pacific Place in Seattle, Washington, The Westchester in White Plains, New York and Tysons Corner in McLean, Virginia. All seven stores are performing well and continue to exceed our expectations. Our current plans call for opening an additional 13 to 15 stores by the end of fiscal 2000.''

The J. Jill Group is a leading retailer of high quality women's apparel, accessories, shoes and gifts. The company currently markets its products through its specialty retail stores, catalogs, and e-commerce website. J. Jill is designed to appeal to active, affluent women age 35 and older.

THE J. JILL GROUP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
Six Months Ended
In thousands, except per share data - unaudited
June 24, 2000
June 26, 1999
June 24, 2000
June 26, 1999
 
Net sales
$52,065
$78,041
$101,443
$142,760
Cost of products and merchandising
33,630
50,556
68,226
95,257
Selling, general and administrative expenses
14,455
20,835
27,681
38,257
Operating income
3,980
6,650
5,536
9,246
Interest expense
319
354
604
766
Provision for income taxes
1,501
2,518
2,022
3,392
Net income
$2,160
$3,778
$2,910
$5,088
 
Earnings per share:
Basic earnings per share
$0.22
$0.38
$0.29
$0.52
Weighted average shares outstanding
10,013
9,881
10,010
9,785
Diluted earnings per share
$0.21
$0.36
$0.28
$0.48
Weighted average shares outstanding
10,251
10,628
10,225
10,550


THE J. JILL GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands - unaudited
June 24, 2000
June 26, 1999
 
ASSETS:
Cash and marketable securities
$3,725
$12,276
Assets to be disposed of
2,281
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Inventory
23,143
22,058
Prepaid catalog expenses
3,682
4,311
Deferred income taxes
9,160
6,934
Other current assets
5,752
4,443
Total current assets
47,743
50,022
Property and equipment
53,749
49,369
Deferred income taxes
1,926
4,520
Other non-current assets
1,755
1,723
 
Total assets
105,173
105,634
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses
24,985
22,517
Short-term debt
3,118
1,911
Total current liabilities
28,103
24,428
Long-term debt
18,219
21,344
Total liabilities
46,322
45,772
Capital stock
63,078
61,227
Accumulated deficit
(4,227)
(1,365)
Total stockholders' equity
58,851
59,862
 

Total liabilities and stockholders' equity

$105,173
$105,634