Dillard's Reports Lower Net Income, Flat Sales in Q2

Dillard's Reports Lower Net Income, Flat Sales in Q2
Dillard's headquarters in Little Rock (Stephanie Dunn)

Dillard's Inc. of Little Rock (NYSE: DDS) reported fiscal second-quarter net income of $163.4 million, down 12% from $185.7 million in the same period a year ago.

Still, earnings per share rose 5.6% in the quarter to $9.30.

Sales for the period ending July 30 were flat, totaling $1.59 billion compared to $1.57 billion the second quarter of 2021. Stronger performing categories included men’s apparel and accessories and cosmetics. Ladies’ apparel was the weakest performing category.

Inventory increased 7% in the quarter against a 13% decrease a year ago.

Consolidated operating expenses increased 9.7% to $401.3 million, which the company attributed to "increased payroll and payroll-related expenses in the current highly competitive and inflationary wage environment."

CEO William Dillard II acknowledged that business softened in the period, but noted that halfway through the fiscal year, the company's performance has been far better than in 2021. Net income is up 21% and earnings per share are up 44%.

The company ended the quarter with 250 locations and 29 clearance centers in 29 states. Locations will soon close in Wichita Falls, Texas, and St. Joseph, Missouri, while a new store is expected to open in fall 2023 in Sioux Falls, South Dakota. 

Dillard's repurchased about 875,000 shares of Class A Common Stock at an average price of $258.11 per share during the quarter. The total purchase was valued at $225.8 million.

Shares on Thursday morning were up more than 11%, trading at around $274. Year to date, shares were up around 10%.

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