Dillard's 4Q Profit Down 26 Percent

Dillard’s Inc. of Little Rock on Monday reported fourth-quarter profit of $119.1 million, down 26 percent from the $161.4 million it reported during the same time last year. 

Earnings per share were $2.71, down from $3.36 in the same quarter last year.

"Although it was a profitable fourth quarter, we are disappointed in our gross margin performance, as lower than anticipated sales necessitated heavier markdowns," Dillard's CEO William T. Dillard II said in a news release. "We are pleased with our expense control as well as with our strong cash flow for the year."

The publicly traded department store chain (NYSE: DDS) said gross margin on retail sales declined 180 basis points to 32.8 percent. The company attributed the decline to "increased markdowns in response to lower than anticipated sales." The company also said inventory rose 4 percent.

Quarterly same-store sales rose 2 percent. Total merchandise sales reached $2.01 billion, up slightly from $2.08 billion in the comparable period. Dillard's noted that this year's fourth quarter contained 13 weeks; last year's fourth-quarter was 14 weeks long.

Net sales for the quarter, which includes revenue its construction company, CDI Contractors LLC, reached $2.03 billion, down from $2.11 billion in the comparable quarter last year.

For the full year, Dillard's reported net income of $323.7 million, or $7.10 per share, down from $336.0 millionm, or $6.87 per share, during the comparable period last year.

Both fiscal years contained one-time after-tax credits. Excluding those credits, the retailer would have reported profit of $318.6 million, or $6.99 per share, up from $309.8 million, or $6.33 per share, from the previous year.

During the quarter, Dillard's closed three stores at Chapel Hill, N.C.; Plano, Texas; and Longmont, Colo. For the full fiscal year, it closed six locations.

Dillard's said it plans to open two new stores in October: a 200,000-SF store at The Shopes at Summerlin in Las Vegas, and a 180,000-SF store at The Mall at University Town Center, Sarasota, Fla.