Dillard's (DDS) Strategies Bode Well: Buy The Stock Now

With constant focus on increasing productivity, development of a leading omni-channel platform and enhancement of its domestic operations, Dillard's Inc. (NYSE:DDS) remains confident of sustaining its growth momentum. Moreover, this Zacks Rank #2 (Buy) stock has surged nearly 13% in the past one month.

Dillard’s continuous efforts to capitalize on growth opportunities in its brick-and-mortar stores and eCommerce business place it well. These are likely to help the company retain its existing customers and attract new ones as well. On the store front, Dillard’s will gain by enhancing brand relations, focusing on in-trend categories, store remodels and rewarding store personnel.

As a leading player among fashion apparel, cosmetics and home furnishing retailers, Dillard’s offers a broad array of merchandise in its stores, featuring products from both national and exclusive brands. Also, the company has created a niche for itself through stringent focus on offering fashionable products and adding value through exceptional customer care service. We believe this strategy will act as a catalyst for attracting more customers, leading to top- and bottom-line growth.

However, Dillard’s commenced fiscal 2016 on a soft note, with lower-than-expected bottom-line results for the third straight time in the first quarter, while total revenue exceeded the Zacks Consensus Estimate. The company’s outlook for fiscal 2016 indicates significant cost pressures, which might hurt its margins and bottom line.

Nevertheless, with share price surging, estimates going up ahead of the second-quarter earnings release and a VGM Score of “B”, Dillard’s remains a sound investment opportunity.

Stocks that Warrant a Look

Some other favorably ranked stocks in the retail sector include The Children's Place, Inc. (NASDAQ:PLCE) , Carter's, Inc. (NYSE:CRI) and Christopher & Banks Corporation (NYSE:CBK) , all sporting a Zacks Rank #1 (Strong Buy).