Good morning. My name is Jill and I will be your conference operator today. At this time, I would like to welcome everyone to the J.Jill First Quarter 2023 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 speakers' remarks, there will be a question-and-answer session. [Operator Instructions] 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 materially from such statements. Those risks and uncertainties are described in the press release and J.Jill’s SEC filings. The forward-looking statements made on this recording are as of June 7, 2023, and J.Jill does not undertake any obligation to update these forward-looking statements. Finally, J.Jill 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 on June 7, 2023. If you do not have a copy of yesterday’s press release, you may obtain one by visiting the Investor Relations page of the website at jjill.com. I will now turn the call over to Claire. Please go ahead.

Thank you, operator, and hello, everyone. Thank you for joining us this morning. I will begin our discussion by reviewing highlights from our first quarter performance. We'll then provide an update on a few of our strategic initiatives before turning the call over to Mark to review our financial performance and outlook in more detail. In the first quarter, we delivered sales in-line with our expectations as we anniversary the strong comparison to last year and we exceeded our outlook for profitability, reflecting our ongoing execution of our disciplined operating model, which generates healthy cash flow from operations. In addition, we successfully completed the refinancing of our term loan and ABL facility this spring. We believe through the disciplines we now have in place, along with our enhanced financial flexibility with the completion of our debt refinancing, We are well positioned to navigate the current environment and remain focused on positioning J.Jill for long-term success. During the quarter, we continued to stay close to our customer and remained agile to react and respond to her evolving spending behavior amidst the current environment, including adjusting our marketing and promotional plans to deliver the sales and inventory results. Our latest customer insights study revealed that concerns around inflationary pressures remained high. We saw that play out in Q1 in her spending behavior in terms of both units per transaction and frequency. We continued to see strength in the newness we delivered, and in categories like dresses and within our Pure Jill and Wearever sub brands. But we did see some softening within certain categories, particularly in our basic’s business. With respect to our channel performance, we continue to see relative strength in stores. While both channels, our customer become more discerning with her purchases, the impact was felt more broadly within direct,…

Thank you, Claire, and good morning, everyone. Overall, we delivered a better than expected first quarter despite what proved to be a more challenging price sensitive customer as the strength of our operating model delivered solid adjusted EBITDA and generated strong cash from operations. In addition, as disclosed in April, we successfully refinanced our funded debt during the quarter reducing principal outstanding by approximately $50 million and extending maturity out to May of 2028. Both Moody's and S&P ratings agencies recognize this accomplishment and issued upgrades on both the corporate rating of J. Jill and the term loan itself. And lastly, as announced last month, we successfully extended our asset backed lending facility, aligning its maturity with the term loan in 2028. Now for an overview of results for the first quarter. Total company comparable sales for the first quarter decreased 3% compared to last year's very strong recovery driven plus 24% comp. Total company sales for the quarter were $149 million, down 5% compared to Q1 2022. As Claire mentioned in her remarks, we did see some evidence during the quarter of macroeconomic impacts on the consumer across our channels. Store sales for Q1 were down 2% versus Q1 2022 on 2% fewer stores. In stores, customers responded to full price, which drove a higher average unit retail, but was offset by lower units sold per transaction primarily driven by markdown units. Direct sales as a percentage of total sales were 45% in the quarter. Compared to the first quarter of fiscal 2022, direct sales were down 8%, primarily due to an increase in markdown sales penetration and higher online returns driven in part by strong sales and higher returning categories, such as dresses. Q1 total company gross profit was $108 million, down $1.9 million compared to Q1 2022.…

Thank you. [Operator Instructions] Your first question comes from the line of Dana Telsey of Telsey Advisory Group. Please go ahead.

Hi. Good morning, everyone. Can you expand a little bit on the more discerning consumer did the cadence of the quarter did you become more discerning, was it both in stores and online? And then can you talk a little bit about the new systems that are being put in place, when do we begin to see the full effect of that? And then with the new refinancing that you have, how are you thinking about interest expense in the go forward on the balance sheet? Thank you.

Sure. Thanks, Dana. I'll take the first one, and let Mark address the second two. More discerning consumer, as you know, we stay in close contact with our consumer speaking to her regularly about her consumer confidence and her purchase intent. And we have seen continued weariness, honestly, in -- as a reflection of the news that's out there and the general sentiment around the macro environment. So we are being what we feel is appropriately cautious given that. And as Mark said in his remarks, have sort of contemplated continued pressure on that front as we developed our guidance for Q2 and for the remainder of the year. So it's not that we're seeing a big change, but we are seeing continued sentiment around caution in spend.

Thanks, Claire, and I -- Dana, will handle the POS as well as the debt question, the interest question. The POS system, as Claire mentioned in her remarks is phasing now into the store fleet. We're starting it in a very prudent fashion and we'll ramp it through really the summer into early Q3 time period. We're currently in about seven or eight stores as of this week and that will continue to ramp. And we're excited about the opportunities, both from the operational aspects, as Claire mentioned in her remarks, but the stores environment, the store employees are very excited to get new technology as well. So it's going well. We're in the process of beginning to ramp that up. For benefits, I would say, late in '23, really 2024 as we really start to operate with the new system in place. The new finance, very excited to have been able to refinance the debt in what has been a pretty challenging market out there. We think it's a testament to the strength of the company that we were able to do so. We had a good process. We were very diligent. We had a good group of lenders that came together and we're very pleased to put that new piece of paper in place. With respect to the interest on a P&L basis, the fact that we reduced the quantum of funded debt by about $50 million, but did see the rate go up, call it, 300 bps the kind of trade out of where the current interest rate environment is, is basically flat on the new debt versus the existing note that we -- the existing notes that we replaced. So hopefully, that helps answer that question.

Thank you. Your next question comes from the line of Janet Kloppenburg of JJK Research. Please go ahead. Go ahead, Janet. Perhaps your line is unmute.

Forgive me, I was on mute. I apologize. Did you say, Claire, what the cadence of the business look like in the first quarter? And did you start to see it slow in March through April, the way most in the industry did? And if you could talk just about the categories of spend where there was strength and where there was weakness? And I may have missed that. I got on about 5 minutes late, so I apologize. Thank you.

Thanks, Janet. Sure, of course. So we saw relatively flat sort of, consumer sentiment over the course of the quarter, we didn't see a lot of up and down. It was more of a general conservatism that we started to see impacting the business overall and we did see that in the sense that the consumer indirect was opting more into the markdown inventory a little bit. And Mark spoke to the returns that we've been seeing. We think that, that's a reflection of that consumer sentiment as well. That said, to your question about the categories, AURs were up in both channels and the dollars per customer continued to be very strong. She pulled back on frequency and she pulled back on UPTs a little bit. And so we don't think that -- it's an all or (ph) nothing kind of thing. She was being discerning and she was also choosing to spend in categories where there was more uniqueness, more fashion, more differentiation. So dresses continue to be very strong. Jackets were strong. As I mentioned in my remarks, our Wearever sub-brand was very strong. We're seeing nice traction there with a younger new-to-brand customer who's buying wherever for work. We think that's a really interesting dynamic that we continue to lean into. Where we saw softness was in the less differentiated category. So net basics some of our bottoms programs where she just decided she didn't need to refresh there to the extent that we would like to see her. So it was mixed, but she continued to vote with her dollars on the things that were unique and special. And the absolute price point wasn't necessarily the indicator, it was more of the mix.

Okay. And when you think about the categories that are doing well, the ones you just articulated, how does your inventory content look. Is it balanced and aligned to those categories pr are there some adjustments to make and do you think that AUR can continue to improve?

Sure. Thanks, Janet. I think we feel like we're well balanced in the inventory. We started to see the softness in basics trend in the back half of last year. And so coming into this year, we had made adjustments to rebalance. We have leaned into those more fashion categories like dresses that continue to have strength. So we feel good coming into Q2 about the balance in the inventory and I think, with regard to AUR, it's at a pretty high level and dollars per customer at a very high level. So we're expecting more of a plateau there, but very healthy on that front.

Thank you. There are no further questions at this time. This concludes today's conference call. You may now disconnect.