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Dillard’s feels department store pain

BY Mike Troy

Little Rock, Ark. — Dillard’s Inc. profit declined 13.3% in the second quarter, but it still came in better than analysts had expected.

Growth in shoes and some apparel categories helped Dillard’s post a feeble second quarter same-store sale increase, but it was too little for the department store retailer to avoid the sharp decline in profitability. The retailer’s profit for the quarter ending Aug. 1 was $29.9 million, down from $34.5 million in the year-ago period.

Total merchandise sales were essentially flat at nearly $1.5 billion for the period ended Aug. 1, while same store sales increased 1%. The operator of roughly 300 stores said its sales trends were notably strong in shoes followed by juniors' and children's apparel and notably weak in the home and furniture category.

"While we achieved positive comparable store sales, we were disappointed with our overall performance compared to the prior year,” said Dillard’s CEO William T. Dillard, II. “However, from our strong cash position, we returned $208 million to shareholders under our share repurchase program."

The stock buyback activity reduced the company’s outstanding share total by 1.8 million shares which helped reduced the severity of the company’s earnings per share decline.

Shortly after the quarter ended, Dillard’s said it opened a 200,000-sq.-ft. store at the Fashion Place mall in Murray, Utah, that replaced a 190,000-sq.-ft. store at the same center.

Other projects on tap for October openings in the third quarter include a 126,000-sq.-ft. store at the Fremaux Town Center in the New Orleans suburb of Slidell that will replace an existing 177,000-sq.-ft. store. A new 155,000-sq.-ft. store is scheduled to open in Cincinnati’s Liberty Center.

Dillard’s currently operates 272 department stores and 25 clearance centers.

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