Dillard's Inc. of Little Rock (NYSE:DDS) on Thursday morning reported lower net income on rising expenses in the third quarter.
The department store operator posted a $187.9 million profit in the period, down 4.8% from $197.3 million in the same quarter a year ago. On a per-share basis, the company reported profit of $10.96.
Sales rose 4.3% in the quarter to $1.54 billion, but the cost of sales increased by 7.5%. Consolidated operating expenses in the quarter rose to $413.8 million, up 5.2% year-over-year and $12.5 million more than in the second quarter of 2022.
On the retail side of the business, rising costs were attributed primarily to higher payrolls and payroll-related expenses in a competitive labor market.
The results still beat the Zacks Consensus Estimate for earnings per share of $4.87.
Dillard's said sales in the period were strongest in cosmetics, men’s apparel and accessories, home and furniture, and shoes. The weakest categories were juniors’ and children’s apparel.
Inventory was up 8% compared to the same quarter in 2021.
"Inventory control remains a priority as we have seen its powerful effects on our business," CEO William Dillard II said in a statement.
The company closed locations in Wichita Falls, Texas and St. Joseph, Missouri during the quarter.
Today, it plans to open a newly-remodeled building at the Westgate Mall in Amarillo, Texas. The building replaces a leased location at the shopping center where the company operates a dual-anchor format.
Dillard's has 249 locations and 28 clearance centers across 29 states.
Shares of the company rose nearly 4% Thursday morning, trading above $325. For the year to date, shares were up 33%.