Little Rock-based retailer Dillard's Inc. reported fourth quarter earnings that handily beat analysts' expectations as the company continues to focus on inventory control, but the company noted sales in December were sluggish, resulting in January mark-downs.
Dillard's reported net income for the quarter ended Jan. 28 of $289.2 million or $16.89 per share compared to $321.2 million or $16.61 per share for the same period a year ago. A consensus of three analysts had put earnings per share at $12.35, according to Yahoo Finance.
Net income for the quarter included a pretax gain of 63 cents per share connected to the sale of two properties and two tax related benefits of 95 cents per share and 80 cents per share respectively.
Net sales for the quarter was $2.13 billion compared with $2.11 billion for the same quarter of 2022. A consensus of three analysts had expected revenue of $2.15 billion, according to Yahoo Finance.
The company said it will close stores in Fort Walton Beach, Fla.; Grand Island, Neb.; and Phoenix during the first quarter. Dillard's added it would open a new, 140,000 square foot store in Sioux Falls, S.D. in the spring. It's the company's first location in South Dakota and marks the 30th state in which Dillard's operates.
Company shares sagged in trading Tuesday, closing the day at $337.01, down $69.64 or 17% in trading on the New York Stock Exchange. Shares have traded as low as $193 and as high as $417.86 over the past year.
For the year the company reported net income of $841.6 million or $50.81 per share compared with $862.5. million or $41.88 cents per share. Net sales for the year was $6.87 billion compared to $6.49 billion for the year prior. Same store sales were up 5% for the period.
"We are entering our 85th year of operation in a strong position with today's results," Dillard's Chief Executive Officer William T. Dillard, II said in a statement. "Fiscal year earnings per share of $50.81 seemed impossible just a couple of years ago, but we have seen what we can do by controlling our inventory and focusing on our customer."
For the fourth quarter the stronger performing categories were cosmetics and ladies' apparel while home and furniture was the weakest. Same store sales were flat as a percentage. Retail operating expenses for the quarter stood at $456.3 million or 22% of sales compared to $439. million or 21.1% of sales.
For the quarter, consolidated gross margin, which includes Dillard's construction business, CDI Contractors, was 37.7% of sales compared to 40.8% for the fourth quarter a year ago. Retail gross margin was 38.7%, the company's second best fourth quarter, behind the pervious fourth quarter record margin of 41.4%. The company said weaker sales at the beginning of the Christmas holiday season led to more mark downs and stronger January sales when compared to the fourth quarter of 2022.
During the year Dillard's repurchased about 1.7 million of its Class A shares valued at $436.6 million.