Dillard's Inc. DDS has been in good stead driven by its constant efforts to capitalize on growth opportunities in brick-and-mortar stores and eCommerce business. Further, the company's focus on increasing productivity, enhancing domestic operations and boosting shareholder value remain noteworthy.
These attributes along with an earnings beat delivered in the most recent quarter have aided the stock to display a solid performance lately. Notably, this Zacks Rank #3 (Hold) stock showcases a 14.8% growth since reporting earnings on May 11, outdoing the Zacks categorized Retail - Regional Department stores
industry's fall of 1.6%. Further, the stock has managed to outperform the broader industry on a year-to-date basis as well. While the stock has declined 12.5%, the industry has slumped 31.3%.
Further, the stock is supported by a Value Style Score of "A" and long-term earnings growth rate of 2.6%, which justify its growth prospects.
Factors Aiding Performance
Dillard's enjoys a niche position among fashion apparel, cosmetics and home furnishing retailers. We believe that the company's strategy of offering fashion-forward and trendy products acts as a catalyst for attracting more customers, leading to top and bottom-line growth.
Driven by efforts to uphold growth at the brick-and-mortar stores, the company is likely to gain from better brand relations, focus on in-trend categories, store remodels and rewarding store personnel. Alongside, the company focuses on enhancing merchandise assortments and effective inventory management to boost growth across the eCommerce business. Further, the company's strong balance sheet and cash flow provide the financial flexibility to take up shareholder-friendly moves as well as engage in store and online business expansion.
However, the company has been plagued with the persistent challenging trends in the apparel retail segment. While the company posted an earnings beat in first-quarter fiscal 2017, it has a murky surprise history. Evidently, Dillard's earnings lagged the Zacks Consensus Estimate in five out of the past six quarters.
Dillard's, Inc. Price, Consensus and EPS Surprise
Dillard's, Inc. Price, Consensus and EPS Surprise | Dillard's, Inc. Quote
Moreover, both the top line and bottom line fell year over year in first-quarter fiscal 2017 mainly due to soft sales across significant categories and higher SG&A expenses. Also, both merchandise sales and comps dropped from last year. We believe that persistent industry headwinds like stiff competition and consumers' changing preferences toward online shopping may also prove to be hurdles.
Stocks to Consider
Meanwhile, investors may consider better-ranked stocks in the retail sector like The Children's Place Inc. PLCE , J.Jill Inc. JILL and Canada Goose Holdings Inc. GOOS . While Children's Place and J.Jill sports a Zacks Rank #1 (Strong Buy), Canada Goose carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Children's Place has an average positive earnings surprise of 36.6% in the trailing four quarters. The stock has a long-term growth rate of 8%.
J.Jill has witnessed positive estimate revisions in the last 30 days. The stock has a long-term growth rate of 19.8%.
Canada Goose, with long-term earnings per share growth rate of 32.8%, has surged 31.5% year to date.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Children's Place, Inc. (The) (PLCE): Free Stock Analysis Report Canada Goose Holdings Inc. (GOOS): Free Stock Analysis Report J.Jill, Inc. (JILL): Free Stock Analysis Report Dillard's, Inc. (DDS): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research