Dillard’s ‘encouraging’ 4Q, tax benefits blunt full-year loss
by February 23, 2021 5:30 am 1,125 views
The financial statements for Dillard’s Inc. are a microcosm for the tough calendar year experienced by many retailers during the coronavirus pandemic.
On Monday (Feb. 22) the Little Rock-based retailer posted similar fourth quarter results compared to the previous year, but overall Dillard’s produced a net loss for the full year, although it benefitted in part due to accounting adjustments allowed by Congressional financial relief.
In the company’s fourth quarter, Dillard’s posted $67 million in net income on revenue of $1.6 billion. Operating expense control and inventory management contributed to the profit. One year ago, Dillard’s reported net income of $67.7 million on revenue of $1.96 billion.
“Our year-long efforts to control inventory and expenses and preserve liquidity have resulted in encouraging fourth quarter results,” said CEO William T. Dillard, II. “We ended the year with $360 million in cash and inventory down 26%. Retail gross margin improved 171 basis points, and operating expenses declined $123 million. Our team’s ability to adjust to the changing circumstances throughout the year made us proud. We are optimistic increased vaccinations, warmer weather and fresh fashions will motivate Americans to shop this spring.”
Like many retail operations, same-store sales have plummeted for Dillard’s. Comp store sales decreased 17% in the fourth quarter following a 24% drop in the third quarter. Dillard’s did not offer same-store sales figures for the first and second quarter, citing mandated store closures that would not reflect normal traffic.
For the full fiscal year, which ended January 30, 2021, Dillard’s reported a net loss of $71.7 million compared to a $111.1 million profit a year ago. Annual revenue was $4.443 billion versus $6.343 billion in the prior year. Loss per share was $3.16 compared to earnings per share of $4.38 one year ago.
Dillard’s took advantage of a provision in the CARES Act that allows for net operating loss carryback to year when the federal tax rate was 35% versus 21%. It said it received a $45.2 million net tax benefit related to the rate differential in the carryback year. Dillard’s also had a pretax gain of $20.3 million primarily related to the sale of six store properties and $5.1 million in tax benefits due to amended state tax returns.
As of Feb. 22, the retailer operated 250 Dillard’s locations and 32 clearance centers spanning 29 states.
Dillard’s stock price (NYSE:DDS) closed higher on Monday (Feb. 22) at $80.85 per share. The company’s stock has traded between a $21.50 low and $128.00 high over the past 52 weeks.