J. Jill, Inc.

Good morning, my name is Chris and I'll be your conference operator today. At this time, I'd like to welcome everyone to the JGL fourth quarter and full year 2021 earnings conference call. On today's call are Claire Spofford, President and Chief Executive Officer, and Mark Webb, Executive Vice President, Chief Financial Officer, and Chief Operating Officer. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, please press the pound key. Before we begin, I need to remind you that certain comments made during these remarks may constitute forward-looking statements and are made pursuant to and within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 as amended. Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ clearly from such statements. Those risks and uncertainties are described in the press release and JGL's FCC filings. The forward-looking statements made on this recording are as of March 22, 2022, and JGL does not undertake any obligation to update these forward-looking statements. Finally, JGL may refer to certain adjusted or non-GAAP financial measures during these remarks. A reconciliation schedule showing the GAAP versus non-GAAP financial measures is available in the press release issued March 22, 2022. If you do not have a copy of today's press release, you may obtain one by visiting the Investor Relations page of the website at jgl.com.

I'll now turn the call over to Claire. Thank you, Operator, and hello, everyone, and thank you for your interest in J. Jill.

I'm going to provide an overview of our results and an update on our business strategy and operations as we move into 2022. Then Mark will cover our financial results in detail. Fiscal 2021 marked a year of significant recovery for J. Jill. Some of the highlights for the year are sales grew to $585 million, an increase of 37% versus 2020. Gross margin improved 980 basis points compared to fiscal 2020 and increased 540 basis points compared to 2019, driven by strong consumer response to our product and disciplined inventory management. SG&A expenses were tightly managed and significantly leveraged at the rate of sales. Adjusted EBITDA saw strong recovery to $92 million, reflecting a significant year-over-year increase and as the rate of sales expanded 620 basis points compared to pre-COVID 2019 levels. These results reflect a lot of disciplined hard work on the part of our entire team in a period of great challenges and turbulence. I want to thank all of my teammates at JGL for their efforts in 2021 and their contributions to driving our strategic objective of cost and inventory management, flowing great new products regularly, and a focus on full price selling. In Q4, we were pleased to have delivered results above previously provided guidance with a strong increase in adjusted EBITDA driven by gross margin expansion and disciplined expense management. The holiday period reflected some changes in shopping behaviors as the consumer started her shopping a bit earlier than last year. We saw store traffic negatively impacted by the Omicron variant beginning Black Friday weekend and continuing into early January. but we were pleased to see traffic recover later in January as cases began to taper off. Total company sales in the quarter increased 15% over Q4 2020, driven primarily by the store channel. As previously mentioned, in Q4 and throughout 2021, we were focused on disciplined inventory management and the regular flow of new product, yielding improved flow through to EBITDA. We continue to see strong consumer response for our product offerings, and we were able to drive sales with a higher penetration of full price, yielding a more than 700 basis point improvement in gross margin versus Q4 2020, despite being impacted in the quarter by elevated freight and logistics expenses. As we look forward to 2022 and beyond, we will remain focused on executing with discipline against our new business model with a continued diligence around inventory and expense management. The hallmarks of our business will continue to be strong relevant product assortments float regularly that are valuable loyal customer base response to it full price and an engaging experience across channels for our customer wherever and whenever she chooses to shop with us. Our strategy for driving profitable growth going forward is built on five main areas of opportunity. Modernize the J. Jill brand and value proposition to increase relevance for our current customers and position J. Jill for the next cohort of customers. Attract and convert new customers through focused, strategic brand and performance marketing programs. Drive growth in high-potential sub-brands and categories. For example, we've seen strong response for our Pure Jill and J. Jill Fit sub-brands, and we'll continue to lean into the opportunity to build these further. Enhance the customer experience across our business and channels to drive engagement and productivity. And finally, develop and execute a plan for new store growth in the highest potential locations. We look forward to updating you on progress against these initiatives on future calls. In summary, we're pleased with the progress and results we drove throughout the year despite the dynamic and challenging macro environment. We continue to be very focused on the disciplines we established in 2021, particularly with regard to inventory and expense management. We believe this disciplined approach to managing the business, coupled with continuous flow of great product that delights our loyal customers, will continue to yield strong margin performance going forward. As we move into 2022, we're pleased with our performance to date. While macro-related headwinds persist, our unique value proposition and re-engineered operating model give us confidence in our ability to deliver continued traction and results as we turn our focus to driving profitable growth and introducing new customers to our relevant and compelling brand and product. With that, I'm going to hand it over to Mark to share more detail on our financial results.