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Dillard’s Inc. played the role that analysts expected Macy’s Inc. to play as second-quarter earnings season got under way Tuesday.
This story first appeared in the August 15, 2013 issue of WWD. Subscribe Today.
The 282-door Little Rock, Ark.-based chain beat Wall Street expectations for the quarter with a 17.7 percent profit gain, which drove the stock up 5.2 percent to $83.10 in after-hours trading.
On the other hand, Macy’s — a key Dillard’s competitor with a national scope — was expected to post strong results, but missed profit estimates for the first time since 2007 and cut back on its guidance, taking some of the air out of already diminished expectations for the quarter.
Dillard’s second-quarter net income increased to $36.5 million, or 79 cents a diluted share, from $31 million, or 63 cents, a year earlier. Earnings came in 5 cents ahead of the 74 cents analysts projected.
Total revenues, which include the company’s CDI Contractors construction business, fell 0.6 percent to $1.52 billion for the three months ended Aug. 3. Comparable-store sales increased 1 percent.
Gross margins in the company’s retail operations improved 10 basis points to 34.4 percent of sales for the quarter.
“Following a strong start to the year, we made further progress in the second quarter,” said William T. Dillard 2nd, chief executive officer. “Positive comparable-store sales and gross margin expansion, combined with continued expense control, enabled us to report another quarter of year-over-year improvement at Dillard’s.”
For the first half, Dillard’s profits rose 22 percent to $153.7 million, or $3.30 a diluted share, on a 0.2 percent drop in revenues, to $3.11 billion.