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Earnings, Consumer Data Lift Dillard's

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Shares of department store operator Dillard's (NYSE: DDS) are trading higher by almost 8% on volume that has already eclipsed quadruple the daily average following a bullish earnings update and encouraging news about the health of the U.S. consumer.

After the close of U.S. markets Thursday, Arkansas-based Dillard's reported a first-quarter profit of $1.89 a share on sales of $1.55 billion, topping $1.67 a share and $1.53 billion in sales analysts expected. Dillards said its net income and EPS results were records for the company and that same-store sales rose for a seventh consecutive quarter.

For the fiscal quarter ending April 28, same-store sales rose 5% and Dillard's repurchased $27.5 million worth of its own stock.

Dillard's Chief Executive Officer, William T. Dillard, II, stated, “We are happy to report a very strong start to 2012 with our seventh consecutive quarter of increased same store sales as well as record setting earnings and earnings per share performances.”

The pop in Dillard's shares prompted the stock to gap up from the $65 area in which it had been consolidating for several weeks and has fanned the flames of a rally that has seen the stock surge more than 47% year-to-date and 39% in the past year.

Dillard's is also soaring as pricier rival Nordstrom (NYSE: JWN) struggles. That stock is down 3.5% on volume that is already more than double the average daily turnover after the company reported disappointing first-quarter results due to increased spending in a bid to boost its online sales. In the past year, Nordstrom has sharply lagged Dillard's, gaining just 12.2%.

Dillard's and the SPDR S&P Retail ETF (NYSE: XRT) along with the Consumer Discretionary Select Sector SPDR (NYSE: XLY) are also being boosted by perhaps the most positive U.S. economic data point in at least several weeks.

The Thomson Reuters/University of Michigan's preliminary May reading on the overall index on consumer sentiment improved to 77.8 from 76.4 in April, topping forecasts for a small decline to 76.2, good for the highest reading since January 2008.

Posted-In: Earnings Long Ideas News Sector ETFs Short Ideas Econ #s Intraday Update Markets


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