Dillard's Q3 Profit Dips on Rising Expenses, but Still Beats Estimates

Dillard's Q3 Profit Dips on Rising Expenses, but Still Beats Estimates
William Dillard II, CEO of Dillard's Inc.

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%.

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