by Lance Turner
Posted 8/29/2007 11:30 am
Updated 1 year ago
Shares of Dillard's Inc. of Little Rock were down more than 5 percent in trading on Wednesday after the department store chain reported a $25.2 million second-quarter loss.
Shares of Dillard's (NYSE: DDS) were trading at $23.10 on Wednesday after closing at $24.34 on Tuesday.
In its report after the market closed on Tuesday, Dillard's showed the loss on sales of $1.649 billion, down from $1.685 billion during the same quarter last year.
The department store chain said same-store sales were down 3 percent from the same quarter last year. Overall sales were down 2 percent.
Dillard's blamed the quarterly drop on a gross margin decline "as lackluster sales during the quarter necessitated higher markdown activity in order to maintain acceptable inventory levels." Dillard's said inventory in comparable stores dropped 4 percent from the same quarter last year.
Dillard's also said cost of sales as a percentage of sales increased to 68.5 percent during quarter, up from 66.6 percent from the same quarter last year.
The earnings report come as Dillard's finds itself in the middle of another series of sales declines. Monthly same-store sales figures have dropped each month since April, when the absence of an Easter holiday shopping weekend caused same-store sales to fall a whopping 14 percent. Sales in March were up by 6 percent.
In May, Dillard's same-store sales dropped 2 percent. Sales fell by 1 percent in June and 6 percent in July.
Dillard's first-quarter earnings also disappointed, when the retailer posted a 30 percent drop.
The company's lackluster performance has raised the ire of an investor group, Barington Capital Partners, which has at least twice requested to meet with Dillard's manage to discuss how the retail can "maximize shareholder value." Dillard's has so far declined to meet with Barington, which represents a group of investors that owns more than 3.2 percent of Dillard's shares.