Dillard’s sales jump in Q3
New York — Dillard’s third quarter merchandise sales for the quarter ended Oct. 27 increased 4% to more than $1.4 billion, same-store sales increased 5% and operating profits increased 84% to nearly $73 million. Gross margins expanded 40 basis points to 37.1% and same-store inventory levels were down 1%.
"Driven by a strong 5% sales increase, we were able to double our earnings per share for the third quarter on top of a record performance last year," said Dillard’s CEO William Dillard, referring to adjusted earnings per share of 96 cents compared to the prior year’s 48 cents. "We are pleased with our gross margin improvement and expense control during the quarter as well as with our ending inventory level. We are entering the holiday season confidently based on these strong results and we look forward to serving our customers at the highest possible level in the coming weeks."
Third quarter comparison were complicated by a number of one time factors that muddied the waters. For example, this year’s unadjusted earnings per share figure of $1.01 included five cents worth of benefit related to a gain on the sale of two former locations and a tax benefit related to the reversal of something called, "a valuation allowance related to a deferred tax asset consisting of a capital loss carryforward." The prior year’s third quarter also included a lot of noise in the form of a whopping after tax credit of $202.5 million, or $3.83 per share, that enabled the company to report profits of $228.2 million or $4.31 a share.
After stripping out these one time benefits, Dillard’s was left with a respectable quarter that demonstrated improvement from the prior year. The company operates 284 stores and 18 clearance centers in 29 states, in addition to an e-commerce site, and appears well positioned for the holidays.ut only to those who hold one of the company’s REDcards.
Mobile mindset key to a Merry Christmas
Smartphones will be retailers’ friend this holiday season, according to Deloitte’s annual survey of spending intentions and trends.
Half of consumers surveyed own smartphones and nearly seven-in-10 plan to use them for holiday shopping this year, according to the online survey on 5,089 consumers conducted during the 10-day period that began Sept. 14. These shoppers will primarily use their devices to get store locations (62%), check and compare prices (58%) and obtain product information (50%). These consumers are expected to shell out 72% more than those who do not plan to use smartphones, spending a total $1,428 on the holidays across categories including gifts, entertaining at home, socializing away from home, non-gift clothing, home/holiday furnishings and other holiday spending.
"Deloitte’s research into smartphones’ influence on in-store sales indicates that the conversion rate for shoppers who use a retailer’s dedicated mobile application is 21% higher than those who do not," Alison Paul, vice chairman, Deloitte LLP, and retail & distribution sector leader. "This holiday season, branded applications, Wi-Fi connectivity and personalized, location-based promotions from retailers can enable shoppers to make an immediate buying decision in the store."
This year, Deloitte anticipates that in-store sales influenced by consumers’ smartphone use will account for $36 billion, or 5.1% of total holiday retail store sales.
Among the other findings:
- Nearly half of consumers plan to shop online for holiday gifts and where they will also read reviews before buying. One in three plan to rely on reviews more this year than last year.
- Nearly half of shoppers will make social media part of their holiday shopping process by tapping into social networks for discounts, to research gift ideas and read reviews.
- When shopping online, 47% of consumers indicate that low prices are most important when shopping a particular retailer. Online shoppers also expect some free perks in the form of shipping and returns.
- Despite the emphasis on mobile, social and online, in-store service still matters. Four out of 10 consumers indicate that during the holidays, they are more likely to seek help from store associates in electronics or office supply stores followed by traditional department stores and discount stores.
"The store continues to be central to holiday shopping, but its role and that of the store associate is evolving as the physical and virtual shopping experiences merge," Paul said. "Associates should be more informed and empowered than in the past; they should have the ability to make price-matching decisions on the spot, and be well-versed on promotions and products that customers are viewing via the retailer’s mobile and online channels."
Target joins early Black Friday crowd
Target plans to open at 9 p.m. on Thanksgiving Day to kick of its Black Friday promotional efforts and will follow up with additional deals that become available at 4 a.m.
The company is also rewarding its REDcard holders by allowing them early access to select Black Friday sale items at Target.com.
"We heard from our guests that they look forward to kicking off their holiday shopping with deal-hunting on Thanksgiving night. Opening at 9 p.m. gives Target’s Black Friday guests a more convenient way to create an after-dinner shopping event that the entire family can enjoy," said Kathee Tesija, Target’s EVP of merchandising. "Guests can shop with confidence throughout the entire holiday weekend knowing that Target offers incredible value on items for decorating, entertaining and gift giving."
Target is among a growing group of retailers who in recent years have moved forward Black Friday opening times to the point where it became inevitable stores would open on Thanksgiving Day. Walmart stores begin offering Black Friday deals at 8 p.m. on Thanksgiving Day and like Target attributed the decision to customer demand.
The other major structural change that has taken place around Black Friday is the early release of deals. Once tightly guarded, the digital era changed everything when several years ago deals began to leak out. Now, retailers take the proactive approach and simply pre-announce their special offers.
In Target’s case, some of the offers include a Apex brand 32 inch LCD TV for $147, a Nikon L310 digital camera for $99, a Nook Simple Touch e-reader for $49 and Beats headphones for $179.
Under the guise of "bonus doorbusters," Target has promotional pricing on other key items that kicks in at 4 a.m. and a special gift card incentive. Items offered at 4 a.m. include a Samsung 50 inch 1080p LED HDTV for $699, a Canon A3400 Camera bundle for $89 and Leapfrog Explorer Software for $15.
From 4 a.m. on November 23, until noon, those who spend $50 or more on apparel, accessories or home products will received a $10 Target gift card.
For those shoppers who want an even earlier head start, Target is making 20 promotional items available on it Web site beginning on Wednesday, November 21, but only to those who hold one of the company’s REDcards.