Dillard’s Profits Rise 85% in Third Quarter

Dillard’s Inc. kept its momentum going as it approaches the all-important holiday shopping season.

The Little Rock-based mall retailer reported record third quarter earnings of $26.6 million, or $0.50 per share. One year ago, Dillard’s posted net income of $14.4 million, or $0.22 per share.

Revenue for the retailer climbed 4% higher than one year ago to $1.4 billion. Just as impressive were same-store sales increasing by 5%. Same-store sales, or comparable store sales, are a key indicator of retail sales health.

“Our 5% comparable store sales performance provided strong income momentum as we maintained gross margin and leveraged our operating expenses – resulting in an 85% increase in net income for the quarter. This record-setting third quarter performance further solidifies our confidence in our strategy as we enter the holiday season,” said Dillard’s CEO William T. Dillard.

Operating margins were a key and Dillard’s disclosed that it planned to alter its inventory strategy. “Inventory in comparable stores increased 4% at October 29, 2011 compared to October 30, 2010 as management has planned more aggressively in light of improved sales trends,” the company said in its third quarter financial notes.

Also of note, Dillard’s recently repurchased approximately $123.7 million of its Class A common stock. During the last quarter, it also closed a store in Virginia. Dillard’s operates 288 store locations and 16 clearance centers in 29 states.

Year-to-date, Dillard’s net income is up more than 72% to $120.8 million on increased revenues of $4.29 billion.

Dillard’s shares (NYSE: DDS) have also been something to write home about this year. On Thursday, the stock closed at $55.17. It has ranged from a $29.32 low to a $61.08 share price high in 2011.