Noncash asset impairment and store closure charges threw Dillard’s Inc. to a nearly $150 million loss in the fourth quarter.
This story first appeared in the March 6, 2009 issue of WWD. Subscribe Today.
The company reported late Thursday that for the three months ended Jan. 31 the loss was $149.3 million, or $2.03 a share, against income of $47.3 million, or 63 cents, in the same year-ago quarter.
Most of the loss came from pretax charges of $177.9 million for asset impairments and store closures and $2.9 million for losses and remediation expenses related to Hurricane Ike. In comparison, the prior year’s quarter had pretax asset impairment and store closure charges of $16.1 million and an income tax benefit of $10.3 million.
Excluding special items, Dillard’s had a loss of 31 cents a share in the most recent quarter and net income of 62 cents a share in its year-ago counterpart.
Total revenues fell 5.7 percent to $2.08 billion from $2.21 billion. That includes a sales drop of 5.7 percent to $2.04 billion from $2.16 billion and a comparable-store sales decline of 8 percent.
“Our extensive cost reduction measures resulted in a $67.3 million savings but were not enough to offset the significant declines in sales and gross margin that we experienced during the quarter,” said William Dillard 2nd, chief executive officer. “We remain committed to conserving our cash, managing our inventory, reducing our expenses and improving our merchandise assortments to emerge a stronger competitor in the long term.”
For the year, the loss was $241.1 million, or $3.25 a diluted share, against income of $53.8 million, or 68 cents, in 2007. Excluding special items, the loss last year was $1.56 a diluted share versus net income of 55 cents in the prior period. Revenues fell 5.2 percent to $6.99 billion from $7.37 billion.
The company said it owns 86 percent of its total store square footage, and that total maturities of long-term debt in 2009 and 2010 combined are less than $26 million.