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Dillard's Reports Record Q3 Earnings

Thursday November 14th, 2013 - 9:28AM


Dillard's, Inc. announced operating results for the 13 and 39 weeks ended November 2, 2013. The retailer reported record earnings per share of $1.13 versus $0.96 excluding items, a 1% increase in comparable store sales, and an operating expense leverage of 40 basis points of sales. It also announced the repurchase of $186.9 million of Class A Common Stock (2.4 million shares).

Dillard's reported net income for the 13 weeks ended November 2, 2013 of $50.9 million, or $1.13 per share compared to net income of $48.5 million, or $1.01 per share, for the 13 weeks ended October 27, 2012. 

Dillard's CEO, William T. Dillard, II, stated, "Another positive comparable store sales increase and expense control highlighted our third quarter at Dillard's, as did our aggressive execution of $187 million of share buyback. In spite of a somewhat disappointing 30 basis point decline in merchandise gross margin, we were pleased to deliver increased net income. As we enter our 75th anniversary holiday season, we are looking forward to serving our customers nationwide at an exceptional level."

Dillard's reported net income for the 39 weeks ended November 2, 2013 of $204.6 million, or $4.43 per share compared to net income of $174.5 million, or $3.55 per share, for the prior year 39-week period. 

Net sales for the 13 weeks ended November 2, 2013 were $1.469 billion and $1.450 billion for the 13 weeks ended October 27, 2012. Net sales include the operations of the company's construction business, CDI Contractors, LLC.

Total merchandise sales (which exclude CDI) for the 13-week period ended November 2, 2013 were $1.437 billion and $1.425 billion for the 13-week period ended October 27, 2012. Total merchandise sales increased 1% for the 13-week period ended November 2, 2013. Sales in comparable stores for the period increased 1%.

Sales trends were notably strong in ladies' accessories and lingerie followed by shoes and ladies' apparel. Sales were weakest in the home and furniture category. Sales trends were strongest in the Central region, followed by the Eastern and Western regions, respectively.

Net sales for the 39 weeks ended November 2, 2013 were $4.498 billion and $4.487 billion for the 39 weeks ended October 27, 2012. Total merchandise sales for the 39-week period ended November 2, 2013 were $4.426 billion and $4.403 billion for the 39-week period ended October 27, 2012. Total merchandise sales increased 1% for the 39-week period ended November 2, 2013. Sales in comparable stores for the period increased 1%.

Gross margin from retail operations (which excludes CDI) decreased 30 basis points of sales to 36.8% for the 13 weeks ended November 2, 2013 compared to 37.1% for the prior year third quarter. Consolidated gross margin for the 13 weeks ended November 2, 2013 decreased 40 basis points of sales to 36.2% from 36.6% during the prior year third quarter. Inventory increased 6% at November 2, 2013 compared to October 27, 2012.

During the third quarter of 2013, the company closed its Euclid Square Mall clearance location in Euclid, OH. Dillard's announced the upcoming closure of its University Mall location in Chapel Hill, NC and its Collin Creek location in Plano, TX. Both locations are expected to close by the end of the fourth quarter. At November 2, 2013, the company operated 282 Dillard's locations and 17 clearance centers spanning 29 states and an Internet store. Total square footage at November 2, 2013 was 50.8 million.