Dillard’s Inc. on Wednesday posted a 30 percent decline in first-quarter earnings on a 3.9 percent sales decline.
For the three months ended May 5, net income dropped to $42.9 million, or 53 cents a diluted share, from $61.3 million, or 77 cents, in the year-ago quarter. Total revenues fell 4.1 percent to $1.8 billion from $1.88 billion, which includes a sales decrease to $1.76 billion from $1.84 billion. Same-store sales declined 5 percent.
The company said in a statement that sales of shoes outperformed the average company performance trend, but sales of junior and children’s apparel “declined significantly more than trend during the period.”
Analyst Bernard Sosnick of Oppenheimer on Wednesday issued a research note with a “sell” rating on shares of Dillard’s after the retailer posted results. Sosnick said the retailer’s business is in “free-fall.”
Sosnick wrote, “Dillard’s is slipping deeper into a strategic bind, due to its eroding sales. Increasingly, it will face Macy’s strategic might.”
Sosnick said shares of Dillard’s have “performed well for the last year based on expectations that intrinsic values would be released through a sale of the company. Before the Dillard family would relinquish control of [Dillard’s], we surmise the company’s operating outlook would have to deteriorate further.”
This story first appeared in the May 24, 2007 issue of WWD. Subscribe Today.