Dillard's Inc. of Little Rock on Monday reported fourth-quarter net income of $67 million, down slightly from the same quarter last year, but same-store sales declined 17%.
For the full year, the company reported a net loss of $71.7 million, or $3.16 per share, compared to net income of $111.1 million, or $4.38 per share, in the previous 52-week period. It was the first fiscal-year loss the company reported since 2008, when it fell $241 million in the red.
Still, the publicly traded department store chain (NYSE: DDS) pointed to efforts to control inventory and expenses and preserve liquidly, and said same-store sales improved from a 24% decline in the third quarter.
"We ended the year with $360 million in cash and inventory down 26%," CEO William T. Dillard II said in a news release. "Retail gross margin improved 171 basis points, and operating expenses declined $123 million. Our team's ability to adjust to the changing circumstances throughout the year made us proud. We are optimistic increased vaccinations, warmer weather and fresh fashions will motivate Americans to shop this spring."
Like many retailers, Dillard's was rocked by COVID-19 and state and local restrictions that caused many of its stores to temporarily close early last year. That led to a $162 million first-quarter loss — the worst quarterly loss in its 82-year history.
Sales have recovered since, but Dillard's remains hampered by the pandemic, trends against mall shopping and customers' growing preference for e-commerce. Dillard's has a website but does not share online sales results.
Dillard's beat analysts expectations for quarterly earnings per share but missed on revenue.
For the fourth quarter, Dillard's reported net income of $3.05 per share, up from $2.75 per share in the same quarter last year. Analysts surveyed by FactSet expected earnings per share of $2.65, according to MarketWatch.
Quarterly net sales were $1.570 billion, down 18% from the same quarter last year, missing analysts' expectations of $1.650 billion. Net sales includes the operations of the company's construction business, CDI Contractors LLC of Little Rock.
Excluding CDI sales, Dillard's posted $1.521 billion in sales, down 19% from the same quarter last year. The company said sales in its Eastern region outperformed the Central and Western regions. Sales of home and furniture significantly outperformed the other merchandise categories followed by cosmetics and shoes. Sales of ladies' apparel were significantly below trend, the company said.
For the year, net sales were $4.301 billion, down 31% from the previous year. Total retail sales were $4.160 billion, down 31% from the previous year. The company said it is not reporting same-store sales data for the fiscal year due to COVID19-related store closures in the first and second quarters.
Included in fourth-quarter net income is a non-cash pretax charge of $8.4 million after taxes, or 38 cents per share, in asset impairment related to certain clearance locations.
The company reported a net operating loss for the fiscal year. Dillard's noted that the federal CARES Act allows for net operating loss carryback to years in which the federal tax rate was 35% rather than the current 21%. Included in fourth-quarter net income is a net tax expense partially offsetting the net tax benefit recognized during the first 39 weeks related to the provision.
Included in net income for the previous fourth-quarter is a pretax gain of $6.5 million after taxes, or 26 cents per share, primarily related to the sale of two store properties and $2.3 million in tax benefits from the Taxpayer Certainty & Disaster Tax Relief Act of 2019.