Dillard's Reports 4Q Profit Increase, 10th Straight Quarter of Sales Gains

Dillard's Inc. of Little Rock on Monday kept its winning streak alive, reporting its 10th consecutive same-store sales increase and fourth-quarter net income of $161.4 million, up 14 percent from the same quarter last year.

The department store chain said earnings per share reached $3.36, up 21 percent from $2.77 during the same time last year. The company noted that the fiscal fourth quarter of 2012 contained an extra week compared to the same quarter last year.

Earnings came on quarterly net sales of $2.106 billion, up 7 percent from $1.970 billion during the same quarter last year. Net sales include the operations of the company's construction business, CDI Contractors LLC of Little Rock.

Excluding CDI, total merchandise sales were $2.087 billion, up 7 percent from $1.946 billion during the same quarter last year. Based upon comparable weeks, total sales increased 2 percent, and same-store sales grew 3 percent for the fourth quarter.  

"We are pleased to report a strong finish to a very successful year at Dillard's," Dillard's CEO William T. Dillard II said in a news release. "Our positive sales performance and gross margin expansion combined with expense control drove strong cash flow throughout the year."

Dillard said the company repurchased $185.5 million of its Class A common stock during the year, paid a special $5 dividend during the fourth quarter and will mark its 75th anniversary this month.

Both the 2012 fourth quarter and the 2011 fourth quarter included millions of dollars in one-time items.

Without the those items, the retailer would have reported net income of $137.6 million, up 22 percent from $112.8 million during the same quarter last year. On an earnings-per-share basis, Dillard's would have reported $2.87 per share, less than analysts' expectations of $2.89 per share, but up 30 percent from $2.21 per share last year.

Sales Gains, Cash Flow

For the 10th straight quarter, Dillard's reported a same-store sales increase. The company said fourth-quarter same-store sales rose 3 percent. 

Dillard's also cired an improvement in fourth-quarter merchandise gross margin of 40 basis points of sales, and reported cash flow from operations for the fiscal year reached $522.7 million compared to $501.1 million for the previous fiscal year. The company said the cash flow increase made its share buybacks and $5 dividend possible.

As of Feb. 2, Dillard's operated 284 stores and 18 clearance centers in 29 states. Total square footage was 52.3 million.

Fiscal Year

For the full fiscal year, Dillard's reported net income of $336.0 million, or $6.87 per share, down from $463.9 million, or $8.52 per share. Both fiscal years included millions of dollars in one-time items.

Excluding the those items, the department store chain would have reported $309.3 million, or $6.32 per share for fiscal year 2012 -- a record-setting fiscal year earnings per share performance and a 50 percent increase from the previous fiscal year.

Net sales for the year were $6.593 billion, up 5 percent from $6.264 billion in the previous year.

Total merchandise sales for the year were $6.489 billion, up 5 percent from $6.194 billion in the previous year. Based upon comparable weeks, total sales increased 3 percent and sales in comparable stores increased 4 percent for the fiscal year.