Dillard Not Too Concerned About Last Week’s Stock Performance

Dillard's Inc. CEO William Dillard II said the company is confident going into the holiday sales season.

Even though Dillard’s Inc. stock price tumbled 11.1 percent last week, its seventh-worst performance in the past five years, CEO William Dillard II didn’t appear too concerned Saturday morning.

“What happened this week to the stock is not uncommon,” Dillard said at the annual shareholders’ meeting held at the company’s Little Rock headquarters. “It’s not indicative of what we’ve done over the last five years. Our view around here is, has been, we’re in this for the long pull.”

Dillard pointed to a chart that showed Dillard’s stock performance over the last five fiscal years compared to the Standard & Poor’s 500 Index and the S&P’s 500 Department Store Index. For $100 invested on Jan. 29, 2010, the return for Dillard’s stock would have been $787, but only $214 for the S&P 500 and $203 for the S&P 500 Department Stores, assuming dividends were reinvested, according to Dillard’s chart.

Also during the meeting that lasted approximately 10 minutes, Dillard dismissed talk of spinning off a stand-alone real estate investment trust.

“We really fail to see why in the long-term basis a dollar of REIT income is any different than a dollar of department store income,” he said.

Last year activist investor Marcato Capital Management LP of San Francisco said it believed Dillard’s stock value could go much higher by forming a REIT.

Also during the meeting, Glen Hooks, the Sierra Club director for Arkansas, urged Dillard’s to adopt a stockholder proposal regarding sustainability reporting.

The proposal failed. It would have required Dillard’s to adopt goals to reduce greenhouse gas emission from operations and products and report its plans to achieve the goals by September.

“While over 500 businesses, including General Motors, Microsoft and Nike signed the Climate Declaration that states, ‘Tackling climate change is one of America’s greatest economic opportunities of the 21st century,’ Dillard is largely silent on climate change and environment issues,” Hooks said.

Dillard’s issued a statement Saturday that said it agreed that climate change issues are important. And it has “effectively addressed” and will continue to address the issues where it can have a meaningful impact.

Dillard’s noted that since 2008, it has reduced its electricity use by 19 percent by starting a number of energy-saving programs, including using more efficient roofing materials and heating, ventilation and air conditioning systems.

Other proposals put to shareholders passed “overwhelmingly,” the company said. The same 12 directors were re-elected to the board, and Dillard’s retained KPMG LLP as its auditor through the fiscal year that ends Jan. 30, 2016. Dillard’s paid KPMG $1.15 million in fiscal 2013 and $1.27 million in fiscal 2014.

James Freeman, 65, was among the directors re-elected, but he retired Feb. 1 as senior vice president and chief financial officer. He joined Dillard’s in 1988.

Chris Johnson, 43, who served as vice president of real estate for Dillard’s, has been promoted to principal vice president and co-principal financial officer.

Phillip Watts, 52, was promoted to principal vice president, co-principal financial officer and principal accounting officer. He had served as vice president of tax since 2002.