Little Rock-based Dillard's reports 3Q profit down 36%

But that and revenue beat expectations; shares jump 12%

Posted: November 10, 2017 at 4:30 a.m.

Graphs showing Dillard’s Inc. third quarter information.

Graphs showing Dillard’s Inc. third quarter information.

Dillard's Inc. on Thursday reported net income of $14.5 million during the third quarter, a 36 percent decrease from the same three-month period a year ago.

The Little Rock retailer reported earnings per share of 50 cents, which was down from 67 cents during last year's third quarter. Revenue of $1.4 billion was a slight decrease from $1.41 billion.

The performance leading up to the Christmas-shopping season didn't match the previous year's results, but Dillard's beat analyst expectations for the quarter of $1.35 billion in revenue and earnings per share of 33 cents. The company also rebounded from the second quarter, when Dillard's posted a loss of $17.1 million, or 58 cents per share.

"Obviously the numbers were better than expected," said Bob Williams, senior vice president and managing director of Simmons First Investment Group. "Coming off last quarter with a loss of 58 cents, for investors, this was certainly a nice, pleasant swing."

Dillard's released its third-quarter earnings after the markets closed Thursday, but the company's stock enjoyed a strong performance throughout the day. Dillard's shares rose $6.20, or 12 percent, to close at $57.22.

The company said its net income for the quarter included a $4.8 million gain on the disposal of assets and an $800,000 loss on extinguished debt. The net income gain was related to the sale of store property and insurance recovery on a previously damaged location in Chesterfield, Mo.

The company said total merchandise sales -- which exclude its construction business CDI Contractors LLC -- and same-store sales were both down 1 percent during the quarter.

By department, Dillard's reported sales in women's apparel were "notably above the average company sales trend." There were above average trends in sales in both women's accessories and lingerie and junior's and children's apparel as well. Sales also were slightly above trends in shoes, but "significantly" below trends in cosmetics, according to the company.

"Hurricanes Harvey and Irma affected our two largest states, Texas and Florida, leading to a sales decline of 1 percent," Dillard's Chief Executive Officer William T. Dillard said in a news release. "Excluding these events, we believe sales would have been flat for the quarter. We were encouraged by positive sales trends in the past few weeks of the quarter, and we hope it continues."

Macy's and Kohl's reported third-quarter earnings Thursday morning and said their sales were hurt by the recent hurricanes as well.

Macy's same-store sales fell 4 percent from the previous year, but net income more than doubled to $36 million as the company did a better job of controlling costs. Earnings per share of 23 cents -- excluding one-time charges -- also beat Wall Street expectations.

Kohl's net income fell 18 percent to $117 million during the third quarter, but the retailer posted a slight increase in same-store sales.

Dillard's said Thursday it purchased $23.7 million -- or about 400,000 shares -- of stock under its $500 million share repurchase program. There is $69.5 million remaining under the repurchase program.

Business on 11/10/2017