Dillard’s Hurt By COVID But Improved In Q4

The COVID-19 pandemic hit Dillard’s hard in the 2020, although it is working to recover with a negative fourth- quarter comparable-store sales reading still seven points better than the minus-24% registered in the third quarter, and an earnings beat versus Wall Street in the fourth quarter.

Dillard’s posted a net loss for the 52 weeks ended January 30 of $71.7 million, or $3.16 per share, versus net income of $111.1 million, or $4.38 per share, for the prior year.

Included in net loss is a $2.2 million pretax loss, or $1.4 million after tax and six cents per share, primarily related to the sale of a store property and $10.7 million, or $8.4 million after tax and 37 cents per share, in asset impairment related to certain clearance locations, the company stated. Included in net income for the previous year was a pretax gain of $20.3 million, or $15.8 million after tax and 62 cents per share, primarily related to the sale of six store properties. Also included in net income for the period is $5.1 million, or 20 cents per share, in tax benefits related to amended state tax return filings and the Taxpayer Certainty and Disaster Tax Relief Act of 2019.

Total retail sales for the year were $4.16 billion, and net sales were $4.3 billion, the company maintained, versus $6.01 billion and $6.2 billion, respectively, in the year earlier. Dillards pointed out that it is not reporting comparable-store sales data for the fiscal year due to COVID19-related store closures in the first and second quarters.

Dillard’s posted fourth quarter net income of $67 million, or $3.05 per share, versus $67.7 million, or $2.75 per share, for the prior-year period. Included in net income for the fourth quarter was  a non-cash pretax charge of $10.7 million, or $8.4 million after tax and 38 cents per share, in asset impairment related to certain clearance locations, the company reported.

When adjusted for one-time charges, Dillard’s earnings per share beat a MarketBeat-published analyst consensus estimate by 78 cents.

Total retail sales for the quarter were $1.52 billion, and net sales were $1.57 billion, the company indicated, versus $1.88 billion and $1.92 billion, respectively, in the year-earlier period. Comparable sales fell 17% in the quarter year over year.

Sales in the company’s eastern region outperformed the central and western regions. Home and furniture sales significantly outperformed other merchandise categories, with cosmetics and shoes next best. Sales of ladies’ apparel were significantly below trend, according to Dillard’s.

Over the year ended January 30, Dillard’s purchased $95.6 million, or  2.2 million shares, of Class A Common Stock under its $500 million share repurchase program.

In announcing the financial results, company CEO William Dillard, II, said, “Our year-long efforts to control inventory and expenses and preserve liquidity have resulted in encouraging fourth quarter results. We ended the year with $360 million in cash and inventory down 26%. Retail gross margin improved 171 basis points, and operating expenses declined $123 million. Our team’s ability to adjust to the changing circumstances throughout the year made us proud. We are optimistic increased vaccinations, warmer weather and fresh fashions will motivate Americans to shop this spring.”