Dillard’s Inc. reported a net loss for the 13 weeks ended August 3 of $40.7 million, or $1.59 per share, compared to a net loss of $2.9 million, or 10 cents per share, for the prior-year second quarter. Analysts expected a loss of 77 cents per share.

Included in net loss for the 13 weeks ended August 3, 2019, is a pretax gain of $4.9 million ($3.8 million after-tax or $0.15 per share) primarily related to the sale of store property.

Net sales for the 13 weeks ended August 3, 2019, and the 13 weeks ended August 4, 2018, were $1.427 billion and $1.468 billion, respectively.

Total merchandise sales for the 13-week period ended August 3, 2019, and the 13-week period ended August 4, 2018, were $1.378 billion and $1.409 billion, respectively. Total merchandise sales decreased 2 percent for the 13-week period ended August 3, 2019. Sales in comparable stores for the period also decreased 2 percent.

In relation to the total Company sales performance, above-trend performances were noted in juniors’ and children’s apparel, men’s apparel and accessories and home and furniture. Weakest performing categories were ladies’ apparel and ladies’ accessories and lingerie. Sales were strongest in the Eastern region followed by the Western and Central regions, respectively.

26-Week Results

Dillard’s reported net income for the 26 weeks ended August 3, 2019, of $37.9 million, or $1.46 per share, compared to net income of $77.7 million, or $2.80 per share, for the prior year 26-week period. Included in net income for the 26 weeks ended August 3, 2019, is a pretax gain of $12.3 million ($9.6 million after-tax or $0.37 per share) primarily related to the sale of three store properties.

Net sales for the 26 weeks ended August 3, 2019, and the 26 weeks ended August 4, 2018, were $2.892 billion and $2.926 billion, respectively. Net sales include the operations of the Company’s construction business, CDI Contractors, LLC (“CDI”).

Total merchandise sales (which excludes CDI) for the 26-week period ended August 3, 2019, and the 26-week period ended August 4, 2018, were $2.799 billion and $2.820 billion, respectively. Total merchandise sales decreased 1 percent for the 26-week period ended August 3, 2019. Sales in comparable stores for the period also decreased 1 percent.

Gross Margin | Inventory

Gross margin from retail operations (which excludes CDI) declined 224 basis points of sales for the 26 weeks ended August 3, 2019, compared to the 26 weeks ended August 4, 2018, primarily due to increased markdowns. Consolidated gross margin for the 26 weeks ended August 3, 2019, declined 212 basis points of sales compared to the prior year-to-date period.

Gross margin from retail operations declined 319 basis points of sales for the 13 weeks ended August 3, 2019, compared to the prior year second quarter primarily due to increased markdowns. Consolidated gross margin for the 13 weeks ended August 3, 2019, declined 304 basis points of sales compared to the prior year second quarter.

Inventory remained unchanged on a percentage basis at August 3, 2019, compared to August 4, 2018.

Selling, General & Administrative Expenses

Selling, general and administrative expenses (“operating expenses”) were $814.3 million (28.2 percent of sales) and $814.2 million (27.8 percent of sales) during the 26 weeks ended August 3, 2019, and August 4, 2018, respectively. Retail operating expenses for the same 26-week periods were $810.9 million (29 percent of sales) and $810.5 million (28.7 percent of sales), respectively.

Operating expenses were $409.1 million (28.7 percent of sales) and $408.4 million (27.8 percent of sales) during the 13 weeks ended August 3, 2019, and August 4, 2018, respectively. Retail operating expenses for the same 13-week periods were $407.6 million (29.6 percent of sales) and $406.5 million (28.9 percent of sales), respectively.

Share Repurchase

During the 13 weeks ended August 3, 2019, the Company purchased $48.9 million (approximately 0.8 million shares) of Class A Common Stock under its $500 million share repurchase program. During the year-to-date period ended August 3, 2019, the Company purchased $66.3 million (approximately 1.1 million shares). As of August 3, 2019, authorization of $340.6 million remained under the program. Total shares outstanding (Class A and Class B Common Stock) on August 3, 2019 and August 4, 2018, were 25.3 million and 27.6 million, respectively.

Store Information

Dillard’s has announced upcoming closures in Oakwood Mall in Enid, Oklahoma (70,000 square feet), Cary Village in Cary, North Carolina (145,000 square feet) and Mall of the Bluffs in Council Bluffs, Iowa (Clearance Center – 100,000 square feet). The Company operates 260 Dillard’s locations and 29 clearance centers spanning 29 states and an Internet store. Total square footage at August 3, 2019, was 48.8 million square feet.