Dillard's Q1 Profit Drops - Update

(RTTNews) - Dillard's Inc. (DDS) Thursday reported a drop in profit for the first quarter, as lower gross margins and higher expenses offset a mediocre revenue growth, with both earnings and revenue falling short of Wall Street estimates.

Little Rock, Arkansas-based Dillard's first-quarter profit dropped to $109.6 million or $2.66 per share from $111.7 million or $2.56 per share last year. On average, five analysts polled by Thomson Reuters expected a profit of $2.78 per share for the quarter. Analysts' estimates typically exclude special items.

Dillard's Chief Executive Officer, William Dillard stated, "We are disappointed with our first quarter performance. Our 1 percent sales decline hampered our ability to leverage operating expenses and to drive net income growth. Although inventory is higher than we would like, we believe the levels are manageable."

Dillard's net sales for quarter rose to $1.57 billion from $1.55 billion last year. Total revenues rose to $1.61 billion from $1.59 billion last year. Analysts had a consensus revenue estimate of $1.61 billion for the quarter.

Sales in comparable stores for the quarter decreased 1 percent.

Sales trends were strongest in the juniors' and children's apparel category followed by shoes and ladies' apparel. Sales were notably weak in the home and furniture category.

Consolidated gross margin for the 13 weeks ended May 2, 2015 declined 50 basis points. Selling, general and administrative expenses rose to $403.6 million from $393.7 million last year.

DDS closed Thursday's trading at $124.20, down $2.34 or 1.85%, on the NYSE. The stock further dropped $4.20 or 3.38% in after-hours trade.