Lower Costs Ease Dillard’s into Better-Than-Expected Q2 Profit

Dillard's storeLittle Rock, AR—Dillard’s Inc. reported Wednesday a second quarter profit increase that beat analysts’ estimates as the department store’s costs fell.

For the quarter ended August 3, Dillard’s posted an 17.7% increase in net income to $36.5 million, or 79 cents a share, compared with a profit of $31 million, or 63 cents a share, a year ago. That beat analysts’ expectations for earnings of 74 cents a share.

Net revenue edged down 0.5% to $1.48 billion (including the company’s construction business, CDI Contractors LLC). Comparable store sales were up 1%.

Gross margin widened to 34% from 33.6% due to low input costs. Overhead expenses edged down 0.2% as lower advertising expenses and services purchases were offset by increases in selling payroll expense and insurance.

Dillard’s Chief Executive Officer, William T. Dillard, II, stated, “Following a strong start to the year, we made further progress in the second quarter,” William T. Dillard II, chief executive, said. “Positive comparable store sales and gross margin expansion combined with continued expense control enabled us to report another quarter of year over year improvement at Dillard’s.”

Dillard’s reported that sales trends were “notably strong in women’s accessories and lingerie followed by juniors’ and children’s apparel.” Weakest performing categories were Shome and furniture followed by women’s apparel. By region, sales at Dillard’s stores in the Central United States were strongest, followed by the Western and Eastern regions.

 

 

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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