Dillard’s Inc. had another lackluster quarter with stagnant top-line sales, culminating in a net income for the year so far that dropped to $43.4 million from $85.1 million in the first nine months of 2018.
But the Little Rock, Ark.-based chain managed to pleasantly surprise investors, driving its stock up 13.3 percent midday Thursday to $76.85. For the third quarter ended Nov. 2, the department store logged profits of $5.5 million, down 25 percent from $7.4 million a year earlier. That looked strong compared with a dismal second quarter with $40.7 million in losses.
The firm’s net sales for the quarter hovered at $1.39 billion, a slight dip from the $1.42 billion a year earlier, marking an improvement from the second quarter, when sales dropped roughly 2 percent to $1.43 billion.
“While we were not satisfied with the third quarter, it was a substantial improvement over the second quarter,” said chief executive officer William T. Dillard 2nd. “We were pleased with our retail gross margin improvement (13 basis points) following a second-quarter decline of 319 basis points. We managed inventory to a 4 percent decrease from flat at the end of the second quarter. Our flat comparable sales performance improved from the 2 percent second-quarter sales decline.”
The company’s net income for the third quarter included $2.8 million in tax benefits from state tax filings, roughly the same amount as last year after changes from the federal Tax Cuts and Jobs Act of 2017.
The company, which has 259 locations and 30 clearance stores around the country, said it has plans to expand in malls in Texas and Missouri, though it also plans to close a clearance center in Mesa, Ariz., in January.