Little Rock-based Dillard's reports $40.7M quarterly loss

Deficit far wider than ’18 as chain, like others, faces higher costs, fewer shoppers

The exterior of the southeast corner of Dillard's at the Northwest Arkansas Mall in Fayetteville June 17, 2002.
The exterior of the southeast corner of Dillard's at the Northwest Arkansas Mall in Fayetteville June 17, 2002.

Dillard's Inc. of Little Rock reported a second-quarter loss of $40.7 million, well below year-ago results.

This time last year, Dillard's reported a loss of $2.9 million, or 10 cents per share.

Revenue for the second quarter fell 2% to $1.42 billion.

Department stores are under tremendous pressure at the moment, said analyst Ken Perkins with Retail Metrics LLC.

Department store foot traffic keeps falling as fewer people visit malls, Perkins said. Meanwhile, Dillard's and competitors are facing large expenses related to online shipping and outreach to drive digital sales, he said.

On Wednesday, Macy's Inc. reported dismal earnings that missed analyst expectations. Macy's shares tumbled, falling as much as 17%. Shares of competitors Nordstrom Inc. and Kohl's Corp. also fell. Analysts took these results as a sign that the department store retail environment was worse than feared.

Overall, department stores saw monthly sales fall over 4% to $11.5 billion in July year-over-year, U.S. Census Bureau data show.

Dillard's merchandise sales decreased 2% in the quarter ending Aug. 3, with strong performance in baby and children's apparel, men's apparel and accessories and home and furniture.

Dillard's gross margin fell 319 basis points compared with the quarter a year ago, primarily because of significant markdowns.

Inventory remained unchanged on a percentage basis year over year.

photo

Graphs showing Dillard's Inc. second quarter information.

Dillard's weakest categories were ladies' apparel, accessories and lingerie. The same was true for Macy's and J.C. Penney in the second quarter, according to reports issued this week.

"That's a pretty wide loss that they put forth," Perkins said about Dillard's second quarter. "I mean very, significantly wider than what was expected."

A FactSet consensus of three analysts estimated a loss of 67 cents per share. Dillard's reported a quarterly loss of $1.59 per share. Included in that loss is a post-tax gain of $3.8 million, or 15 cents per share, attributed to the sale of store property.

Dillard's has said it will close stores in Oklahoma, North Carolina and Iowa, a total of 315,000 square feet.

Today, the business operates 260 Dillard's stores and 29 clearance centers across 29 states, in addition to an online store at dillards.com. As of Aug. 3, Dillard's stores covered 48.8 million square feet.

In the quarter, the company bought $48.9 million worth of Class A Common Stock under its $500 million share repurchase program.

Dillard's executives did not comment in the report, released after the stock market closed Thursday.

Net income for the first half of Dillard's fiscal year was $37.9 million, or $1.46 per share, down from $77.7 million, or $2.80 per share, posted a year ago.

Net sales for the same period fell 1% to $2.8 billion, including its construction business CDI Contractors LLC. Without that, merchandise sales for the first half were $2.7 billion.

Dillard's shares fell $2.17, or more than 3%, to close Thursday at $56.59. They have traded for as much as $90.85 in the past 52 weeks and as low as $53.96.

Business on 08/16/2019

Upcoming Events