J.Jill (NYSE:JILL) lowered its FY24 guidance and warned that Q3 sales could contract as “changes in consumer behavior during the summer” amid a “dynamic consumer environment” led the company to take a more cautious outlook to the remainder of the year.

Shares were sharply lower and breached support at the 200-day moving average for the first time since May.

For the quarter ended August 3, the retailer earned an adjusted profit of $1.05 per share, down from $1.15 a year earlier but $0.14 better than expected. Revenue was down 0.9% at $155.24M, but was also above estimates by $1M. Adjusted EBITDA fell to $30.2M from $34.6M while adjusted EBITDA margin contracted 270 basis points to 19.4%. Operating margin narrowed to 310 basis points to 14.8%

Comparable sales, including DTC sales, were up 1.7% versus +1.3% a year ago, while DTC sales alone, which represents 47.1% of net sales, were up 3.6%

For Q3, J.Jill (JILL) expects sales to be down 1% to up 2% year-over-year and adjusted EBITDA of $23M to $27M.

FY24 sales are now expected to be flat to up 1% versus initial guidance of up 1% to 3%. Adjusted EBITDA is expected to drop by 4% to 9% versus the initial estimate of down 1% to 3%.