Dillard's Swings to Profit After Pandemic Loss

Dillard's Swings to Profit After Pandemic Loss
Dillard’s headquarters at 1600 Cantrell Road in Little Rock.  (Stephanie Dunn)

Dillard's Inc. of Little Rock on Thursday reported improvement in both first-quarter profit and sales compared to the first quarter of 2020, when stores closed or cut hours in response to the COVID-19 pandemic.

The department store chain (NYSE: DDS) reported $158.2 million in profit, or $7.25 per share, compared to a loss of $162 million, or $6.94 per share, for the same period last year. Dillard’s said this year’s first-quarter profit included a pretax gain of $24.6 million tied to the sale of three stores.

"There are a lot of good things to say about this quarter,” CEO William Dillard II said in a news release. “As vaccinations increased, stimulus money was released and warmer weather arrived, we saw sales increase over 2019 levels, with momentum continuing throughout the quarter. 

“We are pleased to report record performances in gross margin and earnings per share. With strong cash flow, we accomplished $59 million in share repurchase while still ending the quarter with $616 million in cash,” he added.

According to the news release, Dillard’s repurchased about 625,000 shares for $58.8 million during the first quarter.

Total retail sales, which exclude revenue generated by Dillard’s construction company, CDI Contractors LLC, hit $1.3 billion, up 73% from $751 million in the same quarter last year. The company said its strongest performing categories were juniors' and children's apparel, men's apparel and accessories and ladies' accessories and lingerie.

Quarterly earnings per share beat Wall Street expectations of $1.20 per share. Total revenue of $1.33 billion also beat expectations, according to Zacks Investment Research.

The department store operator posted revenue of $1.33 billion in the period, which also topped Street forecasts. Three analysts surveyed by Zacks expected $1.21 billion.

In its earnings release, the department store chain also provided comparisons between the first quarter of 2021 and the first quarter of 2019.

Compared to that pre-COVID period, first-quarter 2021 profit nearly doubled, but total retail sales were down 9% from $1.4 billion, and same-store sales were down 6%. First quarter 2021 operating expenses decreased to $336.6 million from $403.3 in the first quarter of 2019, mostly due to decreased payroll and related expenses.

Net sales that include the construction company’s revenue totaled $1.33 billion, up 69% year-over-year but down 10% from the first quarter of 2019.

Last year's first-quarter loss was the worst in Dillard’s 80-year history. The company wrapped up fiscal 2020 with a $72 million annual loss — its first since 2008. Dillard’s will hold its annual meeting at its Little Rock headquarters on Saturday, where shareholders will vote whether to expand its board of directors from 12 directors to 15.

The company operates 250 Dillard’s locations and 31 clearance centers in 29 states as well as dillards.com.

(The Associated Press contribued to this report.)

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