Dillard's Q1 Profit Tops View, But Revenues Miss

(RTTNews) - Apparel retailer Dillard's, Inc. (DDS) reported Thursday a profit for the first quarter that edged up from last year, despite higher expenses, reflecting improved comparable store sales. Earnings per share for the quarter topped analysts' expectations, while quarterly revenues missed their estimates.

"We reported record earnings per share of $2.56 compared to $2.50. Our 2% comparable store sales increase marks our 15th consecutive quarter of positive sales. Additionally, we executed $65.9 million of share buyback as a result of our strong cash flow," CEO William Dillard, II said in a statement.

The Little Rock, Arkansas-based company reported net income of $111.7 million or $2.56 per share for the first quarter, higher than $117.2 million or $2.50 per share in the prior-year quarter, which included net after-tax credit totaling $4.4 million or $0.09 per share.

On average, six analysts polled by Thomson Reuters expected the company to report earnings of $2.41 per share for the quarter. Analysts' estimates typically exclude special items.

Total net sales for the quarter remained essentially flat with last year at $1.59 billion, but missed five Wall Street analysts' consensus estimate of $1.60 billion.

Net sales include the operations of the company's construction business, CDI Contractors, LLC.

Total merchandise sales, which exclude CDI, edged up to $1.54 billion from $1.53 billion a year ago. Comparable store sales for the quarter grew 2 percent.

The company noted that sales trends were strongest in the men's apparel and accessories category and the juniors' and children's apparel category followed by ladies' accessories and lingerie. Sales trends were strongest in the Central region, followed by the Eastern and Western regions, respectively.

Consolidated gross margin, including CDI, remained flat with last year at 39.5 percent. Gross margin from retail operations, which excludes CDI, decreased 14 basis points, primarily due to increased markdowns.

Meanwhile, operating expense increased 19 basis points of sales as increased selling payroll was partially offset by decreased advertising expense.

At the end of the first quarter, the company operated 278 Dillard's locations and 18 clearance centers spanning 29 states and an Internet store.

DDS closed Wednesday's regular trading session at $96.60, down $1.88 or 1.91% on a volume of 0.98 million shares. However, the stock gained $1.00 or 1.04% in after-hours trading.