Dillard’s Inc. became the first major U.S. retailer to report higher first-quarter profits, while J.C. Penney Co. Inc. saw earnings decline during the period.
Little Rock, Ark.-based Dillard’s net income nearly tripled despite a 12 percent sales decline.
Even as J.C. Penney’s first-quarter earnings fell 79.2 percent on a 5.9 percent sales decline and a pension expense, chairman and chief executive officer Myron E. “Mike” Ullman 3rd said the chain is standing its ground strategically.
“We know who we are,” Ullman said on a conference call Friday. “We are a department store that offers style and quality at affordable prices. We’re opening stores, not closing them. We’re improving our processes versus inventing them.…We have the financial flexibility to focus on growing our business.”
The Plano, Tex.-based chain, now with 1,101 doors after nine openings in the last quarter, projected earnings of 50 to 65 cents a diluted share this year, less than the 76 cents Wall Street had penciled in.
Ullman said Penney’s recently has seen greater stability but was careful not to underestimate the severity of the recession.
“The duration of unemployment is now 21.4 weeks, which is among the longest periods on record,” said the ceo, who also sits on the board of the Federal Reserve Bank of Dallas. “And notably, of the people employed, 11 percent of firms have actually cut their compensation for employees, which is a record high.”
Including the ranks of people who have given up job hunting, the nation’s unemployment rate is at 15.8 percent, he said.
Penney’s earnings dropped to $25 million, or 11 cents a diluted share, from $120 million, or 54 cents, a year earlier. Pension expense dragged earnings down by 32 cents a share. But the bottom line beat analysts’ profit forecast of 10 cents by a penny. Sales fell to $3.88 billion from $4.13 billion on a 7.5 percent drop in comparable-store sales for the three months ended May 2.
Gross profit margins grew to 40.5 percent of sales from 40 percent, reflecting leaner inventories and better-than-planned sales. The firm’s shares ended the day at $26.54, down 11 cents or 0.4 percent.
Women’s apparel was the best performing line of business for Penney’s, said Ken Hicks, president and chief merchandising officer.
Hicks said the company has worked to improve its a.n.a., Worthington and St. John’s Bay private label brands and that its spring launches, Allen B. and I [Heart] Ronson, had “good starts.” American Living, designed by Polo Ralph Lauren Corp., is ahead of a year ago on both the sales and the profit margin fronts.
To help build American Living, Penney’s is launching a marketing campaign with the country and western band Rascal Flatts. The three men will dress in American Living’s casual sportswear and the logo will be splashed across trucks during a two-year concert tour that’s expected to draw two million fans.
“They have a large following that happens to be the core of our customers,” Ullman noted at the firm’s annual meeting later on Friday.
Sales and inventory levels are projected to drop 10 percent this year, he said. The company is investing $600 million in capital expenditures in fiscal ’09 and probably $400 million next year compared with $1 billion in ’08.
In the three months ended May 2, Dillard’s reported net income of $7.7 million, or 10 cents a diluted share, compared with 2.7 million, or 4 cents a share, a year ago as sales eased to $1.47 billion from $1.67 billion and same-store sales dropped 13 percent.
Excluding a pretax gain of $1.5 million related to the repurchase of unsecured notes, Dillard’s posted profits of $6.2 million compared with adjusted earnings of $3.6 million in 2008.
The company said it achieved inventory reduction of $371.3 million in the quarter, and that inventory in comparable stores fell by 17 percent versus 2008.
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)