First Quarter Results
Dillard's reported net income for the 13 weeks ended April 28, 2012 of $95.0 million, or $1.89 per share compared to net income of $76.7 million or $1.31 per share for the 13 weeks ended April 30, 2011. Highlights of the 13 weeks ended April 28, 2012 included:
— A 5 percent increase in comparable store sales
— Control of advertising, selling, administrative and general expenses (“operating expenses”) which declined 110 basis points of sales
— Repurchase of $27.5 million (0.4 million shares) of Class A Common Stock
Dillard's Chief Executive Officer, William T. Dillard, II, stated, “We are happy to report a very strong start to 2012 with our seventh consecutive quarter of increased same store sales as well as record setting earnings and earnings per share performances.”
Included in net income for the prior year first quarter is a $3.0 million net pretax gain ($1.9 million after tax or $0.04 per diluted share) consisting of a distribution from a mall joint venture and asset impairment and store closing charges.
Net Sales — 13 Weeks
Net sales for the 13 weeks ended April 28, 2012 were $1.549 billion compared to net sales for the 13 weeks ended April 30, 2011 of $1.469 billion. Net sales include the operations of the Company's construction business, CDI Contractors, LLC (“CDI”).
Total merchandise sales (which exclude CDI) for the 13-week period ended April 28, 2012 were $1.522 billion compared to $1.456 billion for the 13-week period ended April 30, 2011. Total merchandise sales increased 5 percent during the first quarter. Sales in comparable stores increased 5 percent. Sales performances were strong in all merchandise categories with the exception of the home and furniture and juniors' and children's apparel categories, which were below trend for the quarter. Sales trends were strongest in ladies' accessories and lingerie, followed by shoes, men's apparel and accessories, and cosmetics. Sales trends were strongest in the Central region, followed by the Eastern and Western regions.
Gross Margin/Inventory
Gross margin from retail operations (which excludes CDI) was 39.0 percent (of sales) for the 13 weeks ended April 28, 2012 compared to 39.1 percent for the prior year first quarter. Consolidated gross margin for the 13 weeks ended April 28, 2012 was 38.4 percent compared to 38.8 percent during the prior year first quarter. Inventory in comparable stores increased 1 percent at April 28, 2012 compared to April 30, 2011.
Advertising, Selling, Administrative and General Expenses
Advertising, selling, administrative and general expenses (“operating expenses”) decreased approximately 110 basis points of sales during the 13 weeks ended April 28, 2012 compared to the 13 weeks ended April 30, 2011. Operating expenses were $393.2 million (25.4 percent of sales) and $389.3 million (26.5 percent of sales), respectively. During the first quarter, increases in payroll, services purchased and insurance were partially offset by cost savings in advertising and utilities.
During the first quarter of 2012, the Company announced the upcoming closure of its Hutchinson Mall location in Hutchinson, Kansas (70,000 square feet). The store is expected to close during the second quarter of 2012. At April 28, 2012, the Company operated 287 Dillard's locations and 17 clearance centers spanning 29 states and an Internet store at www.dillards.com . Total square footage at April 28, 2012 was 52.5 million.
