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Dillard's, Inc. Reports Third Quarter Results

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Dillard's, Inc. (NYSE:DDS) (the "Company" or "Dillard's") announced
operating results for the 13 and 39 weeks ended October 28, 2017. 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."

Third Quarter Results

Dillard's reported net income for the 13 weeks ended October 28, 2017 of
$14.5 million, or $0.50 per share, compared to net income of $22.8
million, or $0.67 per share, for the prior year third quarter. Included
in net income for the 13-week period ended October 28, 2017 is a pretax
gain on disposal of assets of $4.8 million ($3.1 million after tax or
$0.11 per share) and $0.8 million loss on extinguishment of debt ($0.5
million after tax or $0.02 per share). The gain on disposal of assets
includes the sale of a store property and insurance recovery on a
previously damaged Chesterfield, Missouri location partially offset by a
loss on the sale of equipment. The loss on extinguishment of debt
relates to the write-off of deferred credit facility fees upon the
Company's replacement of the facility earlier in the third quarter.

Net sales for the 13 weeks ended October 28, 2017 and for the 13 weeks
ended October 29, 2016 were $1.355 billion and $1.366 billion,
respectively. 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 October 28, 2017 were $1.313 billion and $1.323 billion for the
13-week period ended October 29, 2016. Total merchandise sales decreased
1% for the 13-week period ended October 28, 2017. Sales in comparable
stores for the period also decreased 1%. Sales of ladies' apparel were
notably above the average company sales trend, with above trend
performances also noted in ladies' accessories and lingerie and juniors'
and children's apparel. Sales were slightly above trend in men's apparel
and accessories and consistent with trend in home and furniture. Sales
were slightly below trend in shoes and significantly below trend in
cosmetics. Sales were strongest in the Western and Eastern regions
followed by the Central region.

Dillard's Chief Executive Officer, William T. Dillard, II, stated,
"Hurricanes Harvey and Irma affected our two largest states, Texas and
Florida, leading to a sales decline of 1%. Excluding these events, we
believe sales would have been flat for the quarter. We were encouraged
by positive sales trends in the past few weeks of the quarter, and we
hope it continues."

39-Week Results

Dillard's reported net income for the 39 weeks ended October 28, 2017 of
$63.8 million, or $2.14 per share, compared to net income of $112.3
million, or $3.24 per share, for the prior year 39-week period. Included
in net income for the 39-week period ended October 28, 2017 is a pretax
gain on disposal of assets of $4.9 million ($3.1 million after tax or
$0.10 per share) and $0.8 million loss on extinguishment of debt ($0.5
million after tax or $0.02 per share). See above description of these
items.

Net sales for the 39 weeks ended October 28, 2017 and for the 39 weeks
ended October 29, 2016 were $4.200 billion and $4.321 billion,
respectively. Total merchandise sales for the 39-week period ended
October 28, 2017 were $4.083 billion and $4.175 billion for the 39-week
period ended October 29, 2016. Total merchandise sales decreased 2% for
the 39-week period ended October 28, 2017. Sales in comparable stores
for the period also decreased 2%.

Gross Margin/Inventory

Gross margin from retail operations (which excludes CDI) declined 137
basis points of sales for the 13 weeks ended October 28, 2017 compared
to the prior year third quarter due to increased markdowns. Consolidated
gross margin for the 13 weeks ended October 28, 2017 declined 133 basis
points of sales compared to the prior year third quarter. Inventory
increased 3% at October 28, 2017 compared to October 29, 2016.

Selling, General & Administrative Expenses

Selling, general and administrative expenses ("operating expenses") were
$411.1 million (30.3% of sales) and $410.5 million (30.1% of sales)
during the 13 weeks ended October 28, 2017 and October 29, 2016,
respectively.

Share Repurchase

During the 13 weeks ended October 28, 2017, the Company purchased $23.7
million (0.4 million shares) of Class A Common Stock under its $500
million share repurchase program. As of October 28, 2017, authorization
of $69.5 million remained under the program. Total shares outstanding
(Class A and Class B Common Stock) at October 28, 2017 and October 29,
2016 were 28.7 million and 33.5 million, respectively.

Store Information

At October 28, 2017, the Company operated 268 Dillard's locations and 25
clearance centers spanning 29 states and an Internet store at www.dillards.com.
Total square footage at October 28, 2017 was 49.1 million square feet.
Damage to the Company's properties as a result of the above mentioned
hurricanes was minimal.

 
Dillard's, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In Millions, Except Per Share Data)
                               
13 Weeks Ended 39 Weeks Ended

October 28,
2017

October 29,
2016

October 28,
2017

October 29,
2016

Amount    

% of
Net
Sales

Amount    

% of
Net
Sales

Amount    

% of
Net
Sales

Amount    

% of
Net
Sales

Net sales $ 1,354.9 100.0 % $ 1,365.6 100.0 % $ 4,200.2 100.0 % $ 4,321.3 100.0 %
Service charges and other income   41.9 3.1   40.9 3.0   113.3 2.7   112.7 2.6
1,396.8 103.1 1,406.5 103.0 4,313.5 102.7 4,434.0 102.6
 
Cost of sales 890.1 65.7 878.9 64.4 2,767.2 65.9 2,810.8 65.0
Selling, general and administrative expenses 411.1 30.3 410.5 30.1 1,211.3 28.8 1,204.1 27.9
Depre
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