‘Difficult’ fourth quarter bites Dillard’s profits, annual income down almost 19%

by Talk Business & Politics staff ([email protected]) 181 views 

Department store and online merchandiser Dillard’s, Inc. posted painful fourth quarter results, missing analysts estimates by 23 cents a share.

The Little Rock-based retail chain said its competitors made the holiday shopping season “difficult” and the company saw weaker spending in its footprint along energy producing states like Texas, Louisiana and Arkansas.

For the three months ended Jan. 30, 2016, Dillard’s recorded net income of $84 million, or $2.31 per share, compared to net income of $130.5 million, or $3.17 per share. Included in net income for the most recent fourth quarter is an after-tax gain of $2 million ($0.06 per share) related to the sale of a store location. Consensus estimates from analysts expected the retailer to post earnings of $2.48 per share.

Total merchandise sales for the 13-week period ended Jan. 30, 2016 were $2.021 billion compared to $2.068 billion for the 13-week period ended Jan, 31, 2015. Sales in comparable stores for the period decreased 2%.

“The fourth quarter was difficult,” said Dillard’s CEO William Dillard. “As sales came in less than planned, we worked hard to control our inventory during an unusually competitive environment. Sales were particularly weak on the Southern border and in the energy producing regions. Higher markdowns affected gross margin, but we did the right thing as we move on to 2016.”

For the full fiscal year, Dillard’s reported net income of $269.4 million, or $6.91 per share, compared to net income of $331.9 million, or $7.79 per share, for the prior year 52-week period.

Included in net income for the fiscal year ended Jan. 30, 2016 is a net after-tax credit of $8.1 million ($0.21 per share) related to the sale of four store locations. The prior year 52-week period ended Jan. 31, 2015 includes a net after-tax gain totaling $3.8 million ($0.09 per share) related to the sale of a store location.

Total merchandise sales for the 52-week period ended Jan. 30, 2016 were $6.389 billion compared to $6.49 billion for the 52-week period ended Jan. 31, 2015. Sales in comparable stores decreased 2% year-over-year.

Dillard’s operates 273 store locations and 24 clearance centers spanning 29 states. Thirty-three of those stores are located in Arkansas, Louisiana and Texas – three states hit hard by a downturn in the energy sector.

Dillard’s shares (NYSE: DDS) closed Monday at $72.45, up 63 cents. The company reported earnings after the markets closed. During the past 52 weeks the share price has ranged from a $144.21 high to a $60.66 low.