Dillard’s Q4 Profit, Sales Increase Again

Dillard's storeLittle Rock, AR—Dillard’s Inc. today reported that its fourth quarter profit grew 14% as comparable store sales rose for the 10th straight quarter, but the department store missed Wall Street expectations.

For the quarter ended Feb. 2, Dillard’s posted net income of $161.4 million, or $3.36 a share, compared to $141.5 million, or $2.77 a share, a year earlier. The quarter’s results were helped by an extra week compared to the same quarter last year and a net after-tax credit of $23.9 million, or 50 cents a share. Excluding that item, Dillard’s adjusted earnings were $137.6 million, or $2.87 a share.

Net revenue was up 7% to $2.106 billion, which includes operations of the company’s construction business, CDI Contractors LLC of Little Rock.

Excluding CDI, total merchandise sales increased 7% to $2.087. Based upon comparable weeks, total sales increased 2%, and comparable store sales grew 3% in the fourth quarter, making it the 10th consecutive quarter of comparable store sales increases.

Analysts’ average estimate, however, had expected slightly higher adjusted earnings of $2.88 a share in the fourth quarter and sales of $2.128 billion.

Bestselling Category: Women’s Accessories

“We are pleased to report a strong finish to a very successful year at Dillard’s,” William T. Dillard II, chief executive, said in a statement. “Our positive sales performance and gross margin expansion combined with expense control drove strong cash flow throughout the year. As a result, we were pleased to return cash to shareholders in the form of a $5 special dividend during the fourth quarter.”

The department store retailer reported sales trends were strongest in women’s accessories and lingerie, and men’s apparel and accessories. Sales were weakest in the home and furniture category. Inventory in comparable stores decreased 1% compared with the same quarter last year.

Gross margin improved by 40 basis points of sales, and the store reported cash flow from operations for the fiscal year reached $522.7 million compared to $501.1 million for the previous fiscal year. The company said the cash flow increase made its share buybacks and $5 dividend possible.

For its full fiscal year 2012, Dillard’s reported net income of $336.0 million, or $6.87 a share. The results included a net after-tax credit totaling $26.7 million.

Excluding these items, Dillard’s would have reported $309.3 million, or $6.32 a share, marking a record-setting fiscal year earnings per share performance and a 50% improvement over prior year adjusted earnings per share.

Net sales for the year were up 5% to $6.593 billion. Total merchandise sales for the year increased 5% to $6.489 billion.

 

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Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com