Dillard’s Inc. was “running through cash like crazy” in the early days of the COVID-19 pandemic, Dillard’s CEO William Dillard II said Saturday during the company’s annual meeting.
Dillard told shareholders at the retailer’s Little Rock headquarters that they should be pleased with the company’s navigation through the pandemic, now in its third year.
The department store operator has bounced back from its worst quarter that ended May 2, 2020, when it reported a $162 million net loss on retail sales of $751 million. Two years later, Dillard’s reported $251.1 million net income on sales of $1.61 billion
Dillard’s stock price also soared since the first quarter of the pandemic in 2020. At the time of the shareholders’ meeting in May 2020, Dillard’s stock price was $25.85. A year later it was $125. And it was $250 on Saturday, down from $323.89 on May 13.
Dillard said the reason the stock price fell in the last 10 days was because its competitors’ results have been poor, but not Dillard’s.
“If you look today at the success, … it came more from reduced inventory than any other single thing,” Dillard told the group of about 35 people Saturday, one of the largest groups for the annual meeting that typically takes about five minutes.
Another change the company made was trimming its store hours from 10 a.m. to 9 p.m. to 11 a.m. to 8 p.m., which will remain for the “foreseeable future,” Dillard said. “It’s turned out to be a better way to run our business. We basically only ask people to come to work if they’re going to work all day.
“We think, on average, our selling has improved dramatically,” he said.
Dillard’s employs about 30,500 people, with about 91% of them working full-time in its retail stores.
He said on Saturday that he wasn’t going to offer any forward looking projections. “I’m actually going to talk about history for the last two years,” he said.
In March 2020, as COVID cases began sweeping across the country, retailers began closing stores.
Three weeks later, about 90% of Dillard’s stores were closed. It operated about 285 stores at the time. Dillard’s didn’t have to close its stores in Arkansas and one or two other locations, he said. But “then we basically gave up” and temporarily closed the remaining stores by the end of March 2020, Dillard said.
“We were running through cash like crazy,” he said. The company’s main objective, though, was to survive the pandemic.
The stores remained closed throughout April and into May 2020. On the first Tuesday in May 2020, Dillard’s opened about 50 stores. “We weren’t sure we were going to sell anything,” Dillard said. “And I think that first week we sold about 50 percent of ’19 numbers.”
He said the company thought that was “actually pretty good.”
The second week in May 2020, Dillard’s opened another 50 stores, “and I think that week we sold 55 or 60 percent of ’19 numbers,” he said.
By the time of the shareholders’ meeting in May 2020, Dillard said that “we realized that we probably were going to be able to survive, because back in March of that year, we were running through cash like crazy. [It was a] difficult time, not just for us, but for the industry, the country.”
In the second quarter of 2020, Dillard’s reported a net loss of $8.6 million on sales of $893.2 million.
And by the fourth quarter of 2020, Dillard’s reported net income of $67 million.
Still, in the beginning of 2021, “business was weak,” he said.
Dillard’s big sales period has been at the end of February, when it sells off the previous year’s inventories. But Dillard’s had reduced its inventory by about 35% from the previous year.
“We didn’t have to clear last year,” Dillard said. “And as a result, February’s business was not very good, but we had a nice profit improvement.”
Dillard’s received a boost when the IRS issued $1,400 to qualified taxpayers in March 2021 as part of the American Rescue Plan Act of 2021. Dillard’s has “been off to the races ever since the stimulus kicked in,” he said.
For the fiscal year that ended Jan. 29, Dillard’s reported a net income of $862.5 million on sales of $6.5 billion, for one of its best performing years.
Alex Dillard, president of the Dillard’s, told the group Saturday that a friend emailed him a quote from tennis player Rod Laver, who said that your game is most vulnerable when you're ahead; never let up.
“Well, I assure you we’re not letting up,” he said.