Dillard’s, Inc. reported earnings declined 19.8 percent in the first quarter ended April 29 against difficult year-ago comparisons. Results came in well above analyst targets. Same-store sales slid 4 percent.

EPS of $11.85 topped Wall Street’s consensus target of $8.98. Sales of $1.584 billion exceeded analysts’ estimate of $1.55 billion.

Dillard’s CEO William T. Dillard, II stated, “We had a good quarter against a tough comparison. We achieved retail gross margin of 45.6 percent on a sales decrease of 4 percent as customer activity declined in the back half of the quarter. We repurchased $113.8 million of stock and still had $955 million in cash and short-term investments remaining.”

Highlights of the First Quarter (compared to the prior year first quarter):

  • Total retail sales decreased 4 percent;
  • Comparable store sales decreased 4 percent;
  • Net income of $201.5 million compared to $251.1 million;
  • Earnings per share of $11.85 compared to $13.68;
  • Retail gross margin of 45.6 percent of sales compared to 47.3 percent of sales;
  • Operating expenses were $406.4 million (25.7 percent of sales) compared to $400.8 million (24.9 percent of sales);
  • Share repurchase of $113.8 million (approximately 357,000 shares); and
  • Ending inventory increase of 3 percent.

First Quarter Results
Dillard’s reported net income for the 13 weeks ended April 29, 2023 of $201.5 million, or $11.85 per share, marking the company’s second-highest first-quarter net income performance. This compares to $251.1 million, or $13.68 per share, for the prior year 13-week period. Included in net income for the 13 weeks ended April 29, 2023 is a pretax gain of $1.8 million ($1.4 million after-tax or $0.08 per share) primarily related to the sale of store property.

Included in net income for the prior year 13-week period ended April 30, 2022 is a pretax gain of $7.2 million ($5.6 million after-tax or $0.31 per share) primarily related to the sale of store property.

Sales
Net sales for the 13 weeks ended April 29, 2023, and April 30, 2022, were $1.584 billion and $1.612 billion, respectively. Net sales include the operations of the company’s construction business, CDI Contractors, LLC (CDI).

Total retail sales (which excludes CDI) for the 13 weeks ended April 29, 2023 and April 30, 2022 were $1.515 billion and $1.581 billion, respectively. Total retail sales decreased 4 percent for the 13-week period ended April 29, 2023, compared to the prior year first quarter. Sales in comparable stores decreased 4 percent. The company noted a decline in customer activity in the back half of the quarter. Cosmetics was the strongest performing category followed by shoes and ladies’ apparel. Ladies’ accessories and lingerie and juniors’ and children’s apparel were the weakest categories.

Gross Margin
Consolidated gross margin for the 13 weeks ended April 29, 2023, was 43.7 percent of sales compared to 46.5 percent of sales for the prior year first quarter.

Retail gross margin (which excludes CDI) for the 13 weeks ended April 29, 2023, was 45.6 percent of sales compared to a record 47.3 percent of sales for the prior year first quarter.

Selling, General & Administrative Expenses
Consolidated selling, general and administrative expenses (operating expenses) for the 13 weeks ended April 29, 2023, were $406.4 million (25.7 percent of sales) compared to $400.8 million (24.9 percent of sales) for the prior year first quarter.

Share Repurchase
During the 13 weeks ended April 29, 2023, the company purchased $113.8 million (approximately 357,000 shares) of Class A Common Stock at an average price of $318.66 per share.

As of April 29, 2023, authorization of $61.6 million remained under the February 2022 program.

Total shares outstanding (Class A and Class B Common Stock) at April 29, 2023 and April 30, 2022 were 16.8 million and 18.1 million, respectively.

Store Information
The company operates 247 Dillard’s locations and 27 clearance centers spanning 29 states (47.0 million square feet) and an Internet store at dillards.com.

Photo courtesy Dillard’s