Dillard’s Inc. reported third-quarter earnings slid 17.2 percent.

Third Quarter Results
Dillard’s reported net income for the 13 weeks ended Oct. 31, 2015 of $45.7 million, or $1.19 per share, compared to net income of $55.2 million, or $1.30 per share, for the prior year third quarter. Included in net income for the current year third quarter is a net after-tax credit of $6.0 million ($0.16 per share) related to the sale of three store locations. Included in net income for the prior year third quarter is a net after-tax credit of $3.8 million ($0.09 per share) related to the sale of one store location.

Net sales for the 13 weeks ended Oct. 31, 2015 were $1.435 billion and $1.46 billion for the 13 weeks ended November 1, 2014. Net sales includes the operations of the company’s construction business, CDI Contractors, LLC (“CDI”).

Total merchandise sales (which excludes CDI) for the 13-week period ended Oct. 31, 2015 were $1.382 billion and $1.422 billion for the 13-week period ended November 1, 2014. Total merchandise sales decreased 3 percent for the 13-week period ended Oct. 31, 2015. Sales in comparable stores for the period decreased 4 percent. In relation to the total company sales performance, better performing categories were shoes, juniors' and children's apparel, cosmetics, and ladies' apparel. Weaker performing categories were men's apparel and accessories and ladies' accessories and lingerie with notable weakness in home and furniture. Sales were strongest in the Eastern region, followed by the Western and Central regions, respectively.

Dillard’s Chief Executive Officer, William T. Dillard, II, stated, “We are disappointed with our third quarter sales performance and in the resulting decline in profit. Share buyback remained a high priority, and we repurchased $175 million of stock under our share repurchase program.”

39-Week Results
Dillard’s reported net income for the 39 weeks ended October 31, 2015 of $185.3 million, or $4.65 per share, compared to net income of $201.4 million, or $4.67 per share, for the prior year 39-week period. Included in net income for the current year-to-date period is a net after-tax credit of $6 million ($0.15 per share) related to the sale of three store locations. Included in net income for the prior year 39-week period is a net after-tax credit of $3.8 million ($0.09 per share) related to the sale of one store location.

Net sales for the 39 weeks ended October 31, 2015 were $4.522 billion and $4.486 billion for the 39 weeks ended November 1, 2014. Total merchandise sales for the 39-week period ended October 31, 2015 were $4.368 billion and $4.423 billion for the 39-week period ended November 1, 2014. Total merchandise sales decreased 1 percent for the 39-week period ended October 31, 2015. Sales in comparable stores for the period also decreased 1 percent.

Gross Margin/Inventory
Gross margin from retail operations (which excludes CDI) improved 11 basis points of sales for the 13 weeks ended October 31, 2015 compared to the prior year third quarter. Consolidated gross margin for the 13 weeks ended October 31, 2015 declined 30 basis points of sales compared to the prior year third quarter. The disparity between retail and consolidated gross margin performance is attributable to increased revenue at CDI, which is a substantially lower margin business. Inventory increased 6 percent at October 31, 2015 compared to November 1, 2014.

Selling, General & Administrative Expenses
Selling, general and administrative expenses (“operating expenses”) were $412.7 million (28.8 percent of sales) and $412.3 million (28.2 percent of sales) during the 13 weeks ended October 31, 2015 and November 1, 2014, respectively. Increases in payroll and insurance expense were partially offset by decreased advertising expense.

Share Repurchase
During the 13 weeks ended October 31, 2015, the company purchased $174.6 million (1.9 million shares) of Class A Common Stock under its $500 million share repurchase program. As of October 31, 2015, authorization of $117.5 million remained under the program. Total shares outstanding (Class A and Class B Common Stock) at October 31, 2015 and November 1, 2014 were 37.5 million and 41.2 million, respectively.

Store Information
In October, Dillard's opened its 155,000 square foot location at Liberty Center in Cincinnati, Ohio as well as its 126,000 square foot location at Fremaux Town Center in Slidell, Louisiana.

At Oct. 31, 2015, the company operated 274 Dillard’s locations and 23 clearance centers spanning 29 states and an Internet store at www.dillards.com. Total square footage at October 31, 2015 was 50.1 million square feet.