Dillard's Inc. on Tuesday reported a fourth-quarter profit of $56.9 million, down 32 percent from $84 million for the same quarter a year ago. Earnings per share were $1.72, down from $2.31 a year ago.
Dillard's shares have dropped nearly 7 percent since the beginning of the year and by 21 percent in the past 12 months.
"Our operating results reflect another quarter of mall traffic declines from continued retail industry challenges," William T. Dillard II, chief executive officer of the Little Rock-based retailer, said in a news release.
"In response, we are ramping up our efforts to bring more distinctive brand and service experiences to Dillard's, both in-store and online. Our strong balance sheet provides us support in these challenging times, and during the year we returned $256 million to shareholders," Dillard said.
Wall Street analysts expected earnings per share of $2.34, according to the average estimate of four analysts surveyed by Zacks Investment Research.
For the quarter, Dillard's reported net sales of $1.94 billion, compared with $2.07 billion for the same period a year ago.
"Online sales and other changes in consumer shopping and spending habits continue to plague Dillard's, as well as their competition," said Bob Williams, senior vice president and managing director of Simmons First Investment Group.
With 268 stores and another 25 clearance stores, Dillard's anchors numerous malls across the United States, and mall traffic has declined in recent years, partly because of online shopping. Retailers across the board, from Nordstrom and Macy's to The Gap Inc., Abercrombie and Fitch, Sears and J.C. Penney, have been struggling.
"After many years of increases in same-store sales, trends are now heading downward," Williams said. "Despite offsets in other areas of the company, operating expenses, such as increased payroll and services, were higher. Notably, while the balance sheet reflects growth in the company's total assets, stockholder equity fell by $78 million during the quarter."
Dillard's said women's and men's apparel and accessories performed better than other categories, such as home, furniture and shoes. Sales were strongest in the East, followed by western and central regions.
For the year ending Jan. 28, Dillard's reported a profit of $169.2 million, or $4.93 a share, compared with the previous year's profit of $269.4 million, or $6.91 per share. The year-end figure includes a profit of $8.1 million, or 21 cents per share, from the sale of four stores.
Net sales for the year, including those in the company's construction segment, were $6.2 billion, down 5 percent from the previous year. Merchandise-only sales were $6 billion, compared with $6.3 billion the previous year.
Sales in comparable stores declined 5 percent between the two fiscal years.
Operating expenses for the year declined $14.3 million, but those savings were partially offset by increases in payroll and employee insurance, the company said.
During the fourth quarter, the company repurchased $80.6 million in shares, bringing the year's total to $246.2 million, for 3.8 million shares. Authorization for $253.8 million in repurchases remained under the company plan as of Jan. 28.
Business on 02/22/2017