), leading fashion apparel, cosmetics and home furnishings
retailer, posted record fourth-quarter and fiscal 2012 earnings
on the back of a robust sales performance combined with gross
margin improvement as well as prudent cost control measures.
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Fourth quarter earnings per share of $2.87 grew 29.9% from $2.21
reported in the prior-year quarter but missed the Zacks Consensus
Estimate of $2.90. For fiscal 2012, the company reported earnings
of $6.32 per share, up 50.1% from $4.21 per share in fiscal 2011
but fell short of the Zacks Consensus Estimate of $6.33. Earnings
for both 2012 periods include an additional week compared with
the respective 2011 periods.
Sales & Comps
Dillard's net sales (including CDI Contractors LLC or CDI) jumped
6.9% to $2,106.3 million in the fourth quarter from $1,970.0
million in the year-ago quarter. Merchandise sales, excluding
CDI, came in at $2,087 million compared with $1,946 million in
the year-ago quarter. The company's total revenue (including
service charges and other income) of $2,154.1 million surpassed
the Zacks Consensus Estimate of $2,140 million. Sales results for
the fourth quarter are for a 14-weeks period compared with a
13-week period for the fourth quarter of 2011.
On a 13 weeks comparable basis, the company's net sales improved
2% while comparable store sales (comps) for the quarter were up
During the quarter, ladies' accessories and lingerie as well as
men's apparel and accessories were the outperforming categories.
The category that witnessed the lowest sales was home and
furniture. The best performing region was Central, followed by
East and West.
For fiscal 2012, the company reported net sales (including CDI
Contractors LLC or CDI) of $6,593.2 million, up 5.3% from
$6,263.6 million in fiscal 2011. Merchandise sales rose 5% to
$6,489 million compared with $6,194 million in the prior year.
Total revenue (including service charges and other income) came
in at $6,751.6 million, ahead of the Zacks Consensus Estimate of
$6,735 million. Sales results for fiscal 2012 comprised 53 weeks
compared to 52 weeks in fiscal 2011.
On a 52 weeks comparable basis, the company reported 3% increase
in net sales while comparable store sales gained 4%.
In the fourth quarter, gross margin from retail operations
(excluding CDI) expanded 40 basis points to 34.6%, while
consolidated gross margin (including CDI) augmented 50 basis
points to 34.4%.
Dillard's operating expenses for the quarter increased 7.7% to
$474.9 million from $440.8 million in the prior-year quarter,
mainly due to an additional week of operations in the quarter
compared to the year-ago quarter. Operating expenses as a
percentage of sales increased 10 basis points to 22.5% in the
Other Financial Details
Dillard's ended fiscal 2012 with cash and cash equivalents of
$124.1 million compared with $224.3 million last year. As of Feb
2, 2013, the company's long-term debt and capital leases slipped
marginally to $622.3 million from $623.9 million as of Jan 28,
2012. In fiscal 2012, the company generated net cash flow from
operations of $522.7 million.
During the quarter, Dillard's bought back nearly 294,000 shares
for about $23.4 million, at an average price of $79.69. For the
year, the company repurchased about 2.8 million shares for a
total of $185.5 million, at an average purchase price of $65.82.
As of Feb 2, 2013, the company had authorization worth nearly
$92.0 million remaining under its share repurchase program.
Further, in Dec 2012, the company rewarded shareholders by paying
a special dividend of $5.00 per share.
In the fourth quarter, Dillard's announced plans to close its
94,000 square feet store in the Cache Valley Mall in Logan, Utah.
The closure is expected to be completed in the first quarter of
As of Feb 2, 2013, Dillard's had about 284 namesake outlets as
well as 18 clearance centers operating in 29 states and an
Internet store at www.dillards.com. Total square footage as of
year-end was 52.3 million.
Looking into 2012
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.
Despite the earnings miss this quarter, our forward outlook for
Dillard's remains positive based on its strong performance over
the last several quarters. Going forward, we expect it to
continue posting earnings as well as revenue growth in the coming
quarters. The company currently holds a Zacks Rank #3 (Hold).
Other retailers currently performing well include
Big 5 Sporting Goods Corp.
), both of which carry a Zacks Rank #1 (Strong Buy), and
), which has a Zacks Rank #2 (Buy).