Dillard’s stock price plummets 17%; full year net income up 3.4%

Little Rock-based Dillard’s beat estimates on full year revenue and net income, but lower than expected fourth quarter sales and broad market concerns about consumer spending caused the company’s stock price to plummet 17% in Tuesday trading.

The specialty retailer said full year – for the fiscal year ending Jan. 28 – net income was $891.6 million, up 3.4% compared with $862.5 million in the previous fiscal year. Full year revenue was $6.996 billion, up 5.6% compared with the previous fiscal year and better than the consensus estimate of $6.98 billion. The full year revenue included $24.7 million primarily from the sale of three store properties.

For the year, same store sales rose 5%, and inventory levels increased 4%.

Fourth quarter net income was $289.2 million, down 10% compared with $321.2 million in the same quarter of the previous fiscal year. Earnings per share of $16.89 was better than the estimate of $12.35. Fourth quarter revenue and income benefited from $13.8 million related to the sale of two store properties and $16.3 million from a federal tax benefit related to a special dividend payment.

The retailer said it will open a store at the Empire Mall in Sioux Falls, S.D., in the spring of 2024. It will be Dillard’s first store in South Dakota. The company in 2023 closed three stores in Fort Walton Beach, Fla., Grand Island, Neb., and Phoenix.

“We are entering our 85th year of operation in a strong position with today’s results. Fiscal year earnings per share of $50.81 seemed impossible just a couple of years ago, but we have seen what we can do by controlling our inventory and focusing on our customer. From the resulting strong cash flow, we were happy to return $708 million to our shareholders, and the majority of them are our associates,” Dillard’s Chief Executive Officer William Dillard, II, noted in the earnings report posted Tuesday (Feb. 21).

The company also reported that operating expenses for the year totaled $1.674 billion, up 9% compared with the $1.537 billion in the previous fiscal year.

“The increase of approximately $138 million is primarily due to increases in payroll and payroll-related expenses,” the company noted.

Company shares (NYSE: DDS) closed Tuesday at $337.46, down $69.19, or 17.01%. During the past 52 weeks the stock price has ranged between $417.86 and $193.

Dillard’s, founded in 1938 in Nashville, Ark., has 247 stores and 27 clearance centers in 29 states.