LITTLE ROCK - Dillard’s, Inc. (NYSE: DDS) reported a notable beat on its fourth-quarter earnings, with a per-share profit that exceeded analysts' expectations, despite a decline in sales. The company's earnings per share (EPS) for the quarter was $15.44, significantly higher than the analyst estimate of $11.70.
The company's stock experienced a slight drop of 1.07% following the announcement, indicating a tempered reaction from investors.
For the fourth quarter ended February 3, 2024, Dillard's (NYSE:DDS) announced total retail sales decreased by 5% in a 13-week comparison to the same period last year. Comparable store sales also saw a 5% decline.
The company's net income for the quarter was $250.5 million, a decrease from the previous year's $289.2 million. Despite the lower net income, the reported EPS of $15.44 was higher than the previous year's $16.89, which included a pretax gain primarily related to the sale of two store properties.
CEO William T. Dillard, II commented on the results, "Our fourth quarter results were respectable considering the continued weak consumer environment." The company also highlighted the payment of a special dividend of $20.00 per share in January, contributing to a total shareholder return of $621 million for the year.
The company's gross margin for retail sales was 37.7% of sales, a slight decrease from the previous year's 38.7%. Operating expenses increased to $476.7 million, or 22.4% of sales, up from the prior year's $458.4 million, or 21.6% of sales. Inventory levels ended the year 2% lower compared to the previous year.
Looking ahead, Dillard's provided estimates for the 52-week period ending February 1, 2025, projecting depreciation and amortization at $185 million, rentals at $22 million, net interest and debt (income) expense at -$8 million, and capital expenditures at $125 million. These figures are based on current conditions, and actual results could vary.
The company's stock movement and the CEO's statement about the challenging environment suggest that while earnings were strong, the broader retail landscape remains uncertain. Dillard's, which operates 273 stores across 29 states, is set to expand into its 30th state with a new location in South Dakota in March 2024.
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