Dillard’s Inc. posted first-quarter declines in both net income and net sales.
Net income for the quarter ended April 29 fell 14.3 percent to $66.3 million, or $2.12 a diluted share, from $77.4 million, or $2.17, a year ago. Net sales slipped 5.7 percent to $1.42 billion from $1.50 billion. Net sales includes the operations of the company’s construction business, CDI Contractors LLC. The company said total merchandise sales, excluding CDI, fell 4.3 percent to $1.39 billion from $1.45 billion a year ago. Dillard’s said comparable-store sales also fell 4 percent.
The retailer managed to beat Wall Street’s $2.02 consensus estimate, but missed the revenue projection of $1.47 billion.
William T. Dillard II, the retailer’s chief executive officer, said, “While our sales decline weighed heavily on our operating results, we remained active in returning cash to shareholders through $93 million of share repurchase and dividends. We still ended the quarter with $302 million of cash largely due to better cash management.”
The company said that sales of women’s apparel “notably outperformed” other merchandise categories, followed by juniors’ and children’s apparel. Weaker performances were noted in cosmetics, home and furniture, as well as women’s accessories and lingerie, the company said.
The company also said sales were strongest in the Western region, followed by the Eastern and Central regions. For the quarter, Dillard’s said gross margin from retail operations improved 65 basis points of sales compared with the prior year’s first quarter. Further, inventory rose 4 percent at the end of the first quarter compared with year-ago levels.
Dillard’s said it purchased $91.1million, or 1.7 million shares, of Class A Common Stock under its $500 million share repurchase program in the quarter. The remaining authorization under the February 2016 plan was $162.7 million at the end of the first quarter.
The retailer said it ended the quarter with 268 Dillard’s locations and 25 clearance centers across 29 states, as well as its online e-commerce site. Total square footage for its retail space is 49.2 million, the company said.
Shares of Dillard’s on Thursday fell 17.5 percent to close at $47.77.
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