Dillard’s, Inc. reported record earnings per share of $1.31 for the first quarter compared to 68 cents for the prior year first quarter. Net income was a record $76.7 million for the thirteen weeks ended April 30, 2011 compared to $48.8 million for the thirteen weeks ended May 1, 2010.

Comparable store sales increased 2 percent

Improved gross margin from retail operations of 130 basis points of sales compared to the prior year first quarter. Operating expense savings of $4.3 million (60 basis points of sales).

Dillard’s Chief Executive Officer, William T. Dillard, II, stated, “We are extremely pleased to report a strong start to 2011 with record-setting operating results as well as the completion of our 2010 and 2011 share repurchase programs. These results speak for themselves and further affirm the success of our initiatives to create clear distinction at Dillard’s and to return value to our shareholders.”

Income

Dillardâ€s reported pretax income (income before income taxes and income on and equity in losses of joint ventures) of $115.7 million for the thirteen weeks ended April 30, 2011 compared to $77.1 million for the thirteen weeks ended May 1, 2010.

Net income for the thirteen weeks ended April 30, 2011 was $76.7 million, or $1.31 per diluted share, compared to net income for the thirteen weeks ended May 1, 2010 of $48.8 million, or $0.68 per share. Included in net income for the thirteen weeks ended April 30, 2011 is a $4.2 million pretax gain ($2.7 million after tax or $0.05 per diluted share) related to a distribution from a mall joint venture and non-cash pretax asset impairment and store closing charges of $1.2 million ($0.8 million after-tax or $0.01 per diluted share).

Included in net income for the thirteen weeks ended May 1, 2010 are non-cash pretax asset impairment and store closing charges of $2.2 million ($1.4 million after tax or $0.02 per share).

Net Sales/Total Revenues

Net sales for the thirteen weeks ended April 30, 2011 were $1.469 billion compared to net sales for the thirteen weeks ended May 1, 2010 of $1.454 billion. Net sales include the operations of the Companyâ€s construction business, CDI Contractors, LLC (“CDI”).

Total merchandise sales, which exclude CDI, for the thirteen-week period ended April 30, 2011 were $1.456 billion compared to $1.429 billion for the thirteen-week period ended May 1, 2010. Total merchandise sales increased 2% during the first quarter in both total and comparable stores.

Gross Margin/Inventory

Gross margin from retail operations (which excludes CDI) improved approximately 130 basis points of sales during the first quarter primarily as a result of the Companyâ€s positive comparable store sales performance of 2 percent combined with improved inventory management efforts resulting in decreased markdowns compared to the prior year. Inventory in comparable stores increased 4 percent at April 30, 2011 compared to May 1, 2010 as management has planned more aggressively in light of improved sales trends.

Consolidated gross margin (which includes CDI) improved 170 basis points of sales during the thirteen weeks ended April 30, 2011 compared to the thirteen weeks ended May 1, 2010.

Advertising, Selling, Administrative and General Expenses

Advertising, selling, administrative and general expenses decreased approximately $4.3 million during the first quarter of 2011 primarily as a result of decreased net advertising expenditures. Operating expenses were $389.3 million (26.5% of sales) for the thirteen weeks ended April 30, 2011 compared to $393.6 million (27.1 percent of sales) for the thirteen weeks ended May 1, 2010.

Credit Facility

As of April 30, 2011, there were no short-term borrowings outstanding under the companyâ€s $1.0 billion revolving credit facility. The credit agreement expires on December 12, 2012, and there are no financial covenants under this facility provided its availability exceeds $100 million. Letters of credit totaling $85.8 million were outstanding under the revolving credit facility as of April 30, 2011.