Little Rock, AR—Dillard’s Inc. today reported that its third quarter profit was up 4.9% as comparable store sales improved and operating expenses declined. The results beat analysts’ expectations, too.
For the quarter ended Nov. 2, the department store posted net income of $50.9 million, or $1.13 a share, compared with net income of $48.5 million, or $1.01 a share, in the year-ago period. Included in the 2012 results was an after-tax credit of $2.4 million, or 5 cents a share. (Without those one-time items, third-quarter 2012 net income would have been $46.1 million or 96 cents a share)
Net sales edged up 1.4% to $1.51 billion, a total that includes the company’s construction business, CDI Contractors LLC.
Accessories: A Top Performer
Total merchandise sales (which exclude CDI) increased 1% to $1.437 billion while comparable store sales grew 1%, too—its 13th straight quarter of comp sales gains.
Analysts’ average estimate expected Dillard’s to post $1.05 a share on sales of $1.49 billion.
Best performing categories included women’s accessories and lingerie followed by shoes and women’s apparel. Sales were weakest in the home and furniture
category. Sales trends were strongest in the Central region, followed by the Eastern and Western regions, respectively.
Gross margin (excluding CDI) narrowed to 36.8% from 37.1% a year ago. Inventory increased 6%.
Selling, general and administrative expenses decreased to $404.4 million as advertising expenses and taxes other than income taxes were partially offset by
increased payroll, primarily selling payroll.
“Another positive comparable store sales increase and expense control highlighted our third quarter at Dillard’s, as did our aggressive execution of $187 million of share buyback,” said CEO William T. Dillard II. “In spite of a somewhat disappointing 30 basis point decline in merchandise gross margin, we were pleased to deliver increased net income.”
Dillard’s, which is celebrating its 75th anniversary, has incorporated the milestone into its holiday ad campaign, “Dillard’s. Making Christmas Merry for 75 Years.” The new tag line will be featured in all Dillard’s holiday advertising efforts throughout the holiday season including prominent in-store placement.
The retailer also confirmed that—unlike its most major retailers—it will remain closed on Thanksgiving with its Black Friday sale starting the next morning at 8 a.m.