), leading fashion apparel, cosmetics and home furnishings
retailer, kick started fiscal 2013 with strong first-quarter
earnings that benefited from a robust comparable store sales
performance combined with gross-margin improvement and prudent
cost control measures.
First-quarter earnings per share of $2.40 grew 27% from $1.89
reported in the prior-year quarter and surpassed the Zacks
Consensus Estimate of $2.08.
Sales & Comps
Dillard's net sales (including CDI Contractors LLC or CDI)
remained almost flat at $1,549.1 million in the first quarter
compared to the year-ago quarter. Merchandise sales, excluding
CDI, came in at $1,530 million compared with $1,522 million in
the year-ago quarter. The company's total revenue (including
service charges and other income) of $1,589.4 million was
marginally above $1,586.0 million reported in the year-ago
quarter and in line with the Zacks Consensus Estimate.
Merchandise comparable store sales (comps) for the quarter were
up 1% compared to a 5% increase in the first quarter of 2012.
During the quarter, ladies' accessories and lingerie as well as
juniors' and children's apparel were the outperforming
categories, offset by lowest sales at the home and furniture
categories. The best performing region was Central, followed by
the East and West.
In the first quarter, gross margin from retail operations
(excluding CDI) expanded 110 basis points to 39.9%, while
consolidated gross margin (including CDI) augmented 130 basis
points to 39.5%.
Dillard's operating expenses for the quarter marginally waned to
$390.2 million from $393.2 million in the prior-year quarter,
driven by a decline in advertising expenses partially offset by
an increase in selling payroll expenses. Operating expenses as a
percentage of sales contracted 20 basis points to 25.2% in the
Other Financial Details
Dillard's ended the quarter with cash and cash equivalents of
$156.0 million compared with $250.7 million last year. As of May
4, 2013, the company's long-term debt and capital leases slipped
marginally to $622.1 million from $623.4 million as of Apr 28,
In the first quarter, the company's net cash flow from operations
increased 39% to $136.9 million from $98.5 million in the
During the quarter, Dillard's bought back 1.4 million shares
worth about $114.7 million, at a price of $79.12 per share.
During the quarter, the company divested its holdings in
Fayetteville, Ark.-based e-Commerce company, Acumen Brands, for a
pre-tax gain of $11.8 million. The gain is recorded in books as a
gain on the disposal of assets.
In the first quarter, Dillard's shut down its 94,000 square feet
store in the Cache Valley Mall in Logan, Utah. Further, the
company announced plans to close its 60,000 square feet store in
Randolph Mall in Asheboro, N.C. The closure is expected to be
completed in the second quarter of 2013.
As of May 4, 2013, Dillard's had about 283 namesake outlets and
18 clearance centers operating in 29 states and an Internet store
at www.dillards.com. Total square footage as of May 4, 2013 was
Looking into 2013
Dillard's expects fiscal 2013 depreciation and amortization
expenses to be about $261 million, while rentals are projected at
approximately $27 million. Moreover, the company expects to spend
about $175 million toward capital expenditure in fiscal 2013,
compared with $137 million spent in fiscal 2012.
Our forward outlook on Dillard's remains positive based on its
strong performance over the last several quarters. We expect it
to continue posting earnings and revenue growth in the upcoming
quarters. The company currently holds a Zacks Rank #3 (Hold).
Other retailers currently performing well include
Build-A-Bear Workshop Inc.
Big 5 Sporting Goods Corp.
) , both of which carry a Zacks Rank #1 (Strong Buy), and
) , which has a Zacks Rank #2 (Buy).
BUILD-A-BEAR WK (BBW): Free Stock Analysis
BIG 5 SPORTING (BGFV): Free Stock Analysis
DILLARDS INC-A (DDS): Free Stock Analysis
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