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Dillard’s, Inc. Reports First Quarter Results

LITTLE ROCK, Ark., May 12, 2016 (BUSINESS WIRE) -- Dillard’s, Inc. DDS, -2.96% (the “Company” or “Dillard’s”) announced operating results for the 13 weeks ended April 30, 2016. This release contains certain forward-looking statements. Please refer to the Company’s cautionary statements regarding forward-looking information included below under “Forward-Looking Information.”

First Quarter Results

Dillard’s reported net income for the 13 weeks ended April 30, 2016 of $77.4 million, or $2.17 per share, compared to net income of $109.6 million, or $2.66 per share, for the prior year first quarter.

Net sales for the 13 weeks ended April 30, 2016 were $1.503 billion and $1.574 billion for the 13 weeks ended May 2, 2015. Net sales includes the operations of the Company’s construction business, CDI Contractors, LLC (“CDI”).

Total merchandise sales (which excludes CDI) for the 13-week period ended April 30, 2016 were $1.449 billion and $1.518 billion for the 13-week period ended May 2, 2015. Total merchandise sales decreased 5% for the 13-week period ended April 30, 2016. Sales in comparable stores for the period also decreased 5%.

Sales trends were strongest in shoes. Weaker performing areas were home and furniture and ladies’ accessories and lingerie. Sales trends were strongest in the Eastern region, followed by the Central and Western regions, respectively.

Dillard’s Chief Executive Officer, William T. Dillard, II, stated, “Our disappointing sales pressured our gross margin and net income performance, although inventory was relatively flat at quarter end. While we controlled expenses, sales leverage was difficult to achieve. We continued to return value to shareholders by purchasing $58.4 million of our Class A Common Stock during the quarter.”

Gross Margin/Inventory

Gross margin from retail operations (which excludes CDI) declined 145 basis points of sales for the 13 weeks ended April 30, 2016 compared to the prior year first quarter. The decline in gross margin was attributed primarily to higher markdowns during the period. Consolidated gross margin for the 13 weeks ended April 30, 2016 declined 140 basis points of sales compared to the prior year first quarter. Inventory remained unchanged on a percentage basis at April 30, 2016 compared to May 2, 2015.

Selling, General & Administrative Expenses

Selling, general and administrative expenses (“operating expenses”) were $398.4 million (26.5% of sales) and $403.6 million (25.6% of sales) during the 13 weeks ended April 30, 2016 and May 2, 2015, respectively. Operating expenses from retail operations increased 89 basis points of sales to $396.8 million (27.4%) during the 13 weeks ended April 30, 2016 from $402.3 million (26.5%) during the 13 weeks ended May 2, 2015. The expense decline was attributable to decreased advertising, services purchased, utilities and supplies partially offset by increased insurance expense.

Share Repurchase

During the 13 weeks ended April 30, 2016, the Company purchased $58.4 million (approximately 721,000 shares) of Class A Common Stock under its $500 million share repurchase program. At April 30, 2016 the remaining authorization under the February 2016 plan was $441.6 million. Total shares outstanding (Class A and Class B Common Stock) at April 30, 2016 and May 2, 2015 were 35.2 million and 41.2 million, respectively.

Store Information

Dillard’s recently closed its Aiken Mall location in Aiken, South Carolina (105,000 square feet). The Company operates 272 Dillard’s locations and 24 clearance centers spanning 29 states and an Internet store at www.dillards.com. Total store square footage is 49.8 million.

Dillard’s, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In Millions, Except Per Share...

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