Dillard’s, like many other retailers, missed its earnings estimates for the third quarter. The department store this morning reported net sales of $1.43 billion versus last year’s $1.46 billion and missing the estimate of $1.498 billion. The stock is dropping over 11 percent in pre-market trading to $68.41.

Dillard’s net income for the third quarter was $45.7 million, or $1.19 a share, versus last year’s net income of $55.2 million. To make matters worse, included in the net income figure is a net after-tax credit of $6 million related to the sale of three store locations. Last year’s third quarter net income also included a credit from one store sale. Total merchandise sales decreased 3 percent for the third quarter. Sales in comparable stores dropped 4 percent.

The better-performing categories included shoes, juniors, children’s apparel, cosmetics and women’s apparel. The weaker departments included men’s wear and accessories, women’s accessories and lingerie. The company said there was notable weakness in home and furniture. Sales were best in the Eastern region, followed by the Western and then the Central region. Dillard’s was also hit by higher payroll and insurance expenses, which it offset by spending less on advertising.

Dillard’s chief executive officer William T. Dillard II stated, “We are disappointed with our third-quarter sales performance and in the resulting decline in profit. Share buyback remained a high priority, and we repurchased $175 million of stock under our share repurchase program.”

The company spent $174.6 million to buy back 1.9 million shares during the quarter and as of the end of the quarter still had authorization to buy another $117.5 million worth of stock. The share buybacks haven’t driven the stock price any higher. Year-to-date the stock has fallen 38 percent to trade near $77.51. The stock fell another 8 percent on Friday ahead of the earnings.

Dillard’s joins many other retailers that had a difficult third quarter and aren’t enthusiastic about the upcoming holiday season. Dillard’s remained quiet with regards to forecasts for the next quarter and year.

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