First-quarter sales grew more rapidly than expenses at Dillard’s Inc., lifting the department store operator to a double-digit increase in profits.

This story first appeared in the May 11, 2012 issue of WWD. Subscribe Today.

During the three months ended April 28, the Little Rock, Ark.-based firm realized net income of $95 million, or $1.89 a diluted share, 23.9 percent above the $76.7 million, or $1.31, booked in the 2011 period. The year-ago figure was elevated $1.9 million, or 4 cents, by an asset disposal gain, offset by asset impairment and store closing charges.

Sales were up 5.5 percent, to $1.55 billion from $1.47 billion, and rose 5 percent on a same-store basis. Including service charges and other income, total revenues rose 5.6 percent to $1.58 billion. Gross margin for retail operations pulled back to 39 percent of sales from 39.1 percent a year ago.

The consensus estimate among the two analysts covering Dillard’s was for earnings per share of $1.67 on sales of $1.53 billion.

William Dillard 2nd, chief executive officer, noted it was the “seventh consecutive quarter of increased same-store sales as well as record-setting earnings and earnings per share performance.”

The firm singled out women’s accessories and lingerie as the top merchandise category in the quarter, with footwear, men’s apparel and accessories and cosmetics also generating strong results. Only juniors’ and children’s apparel and home and furniture fell below the general sales trend.

The bottom-line advance was the result of strict expense and inventory management by the company. While the cost of sales rose 6.1 percent to $954.1 million, selling, general and administrative expenses were up just 1 percent, to $393.2 million, and the two expense categories combined grew 4.6 percent to $1.35 billion. Same-store inventories were 1 percent higher than at the end of the first quarter of 2011.

The firm operated 287 department stores and 17 clearance locations at the end of the quarter. A department store at the Hutchinson Mall in Hutchinson, Kan., is scheduled to close during the current second quarter.

Shares of the retailer rose 71 cents, or 1.1 percent, to $66.19 prior to the disclosure of financial results Thursday afternoon and added 5.5 percent in the first two hours of post-market trading. The stock hit a new 52-week high of $67.22 on Monday.

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