Dillard’s significantly outperformed expectations in the third quarter as the Little Rock, Ark.-based retailer reported net income that soared to $197.3 million, or $9.81 a share, compared to $31.9 million, or $1.43 a share, last year. The contrast is even more striking when compared to 2019 when net income was $5.5 million.
Total retail sales for the period ended Oct. 30, 2021, increased 47 percent to $1.5 billion from $995 million in the year-ago period. Comparable-store sales in the period jumped 48 percent. Compared to the third quarter of 2019, total sales increased 9 percent from $1.3 billion and comparable-store sales compared to two years ago increased 12 percent.
The company did not hold an earnings call, but said that sales of juniors’ and children’s apparel as well as men’s wear and accessories “significantly outperformed” other categories.
Retail gross margins were up in the quarter compared to last year and 2019, which management attributed to “strong consumer demand and better inventory management leading to decreased markdowns.”
Chief executive officer William T. Dillard 2nd said Thursday: “We are pleased to report another record quarter. Continued strong sales combined with record gross margin and expense control produced $197 million of net income. We ended the quarter in another strong cash position of $620 million after repurchasing $239 million of stock.”
Included in net income for the prior year third quarter is a net tax benefit of $32.4 million, or $1.46 a share, related to the Coronavirus Aid, Relief and Economic Security Act, or CARES. Also included in net income for the prior-year third quarter is a pretax loss of $2.2 million, $1.4 million after tax or 6 cents a share) primarily related to the sale of a store property.
Dillard’s management also said it is “monitoring the continuing supply chain issues, particularly with regard to shipping delays and disruptions in the global transportation network,” but provided no further details.
For the nine months, Dillard’s returned to profitability with net income for the 39 weeks of $541.2 million, or $25.76 a share, compared to a net loss of $138.7 million, or $6.05 a share, the prior year. Total retail sales increased 63 percent to $4.3 billion, up from $2.6 billion in the same period last year. And compared to 2019, sales rose 4 percent to $4.2 billion from $4.1 billion two years ago and comparable-store sales rose 7 percent.
During the 13 weeks ended Oct. 30, 2021, the company purchased approximately 1.2 million shares of Class A common stock and for the 39 weeks, it bought 2.6 million shares.
During the third quarter, Dillard’s opened its new location at Mesa Mall in Grand Junction, Colo. and closed its leased clearance center in Harlingen, Tex. All told, Dillard’s operates 250 full-line stores and 30 clearance center in 29 states.