Battered by lower-than-anticipated top-line performance and
higher markdowns, leading fashion apparel, cosmetics and home
) fourth-quarter fiscal 2013 adjusted earnings declined
6.3% year over year to $2.69 per share. Moreover, it fell short
of the Zacks Consensus Estimate of $2.99 per share.
On a reported basis, fourth-quarter earnings came in at $2.71
per share, down from $3.36 in the year-ago comparable
Sales & Comps
Dillard's net sales (including CDI Contractors LLC or CDI)
decreased 3.4% year over year to $2,034.0 million in the quarter
and was lower than the Zacks Consensus Estimate of $2,092
million. Merchandise sales, excluding CDI, came in at $2,013
million as against $2,087 million in the year-ago quarter.
The company's total revenue (including service charges and
other income) of $2,078.7 million reflected a decline of 3.5%
from $2,154.1 million in the year-ago quarter.
Merchandise comparable store sales (comps) for the
thirteen-week period ended Feb 1, 2014 were up 2% from the
thirteen-week period ended Feb 2, 2013.
During the quarter, ladies' accessories and lingerie as well
as shoes were the outperforming categories. The best performing
region was Central, followed by the East and West.
In the quarter, gross margin from retail operations (excluding
CDI) contracted 180 basis points (bps) to 32.8% while
consolidated gross margin (including CDI) declined 180 bps to
32.6%. The year-over-year contraction in gross margin was
primarily due to higher markdowns.
Dillard's operating expenses for the quarter fell to $439.2
million from $474.9 million in the prior-year quarter, primarily
due to an additional week in the fourth quarter of fiscal 2012.
Operating expenses as a percentage of sales contracted 90 bps to
21.6% in the quarter.
Other Financial Details
Dillard's ended the fiscal with cash and cash equivalents of
$237.1 million compared with $124.1 million last fiscal. As of
Feb 1, 2013, the company's long-term debt and capital leases
improved marginally to $621.5 million from $622.3 million as of
Feb 2, 2013.
In the fiscal, the company's net cash flow from operations was
$501.7 million compared with $522.7 million in fiscal 2012.
During the fiscal, Dillard's bought back 3.9 million shares
worth about $301.6 million at a price of $78.30 per share.
Currently, the company has about $290.4 million remaining under
its ongoing share repurchase authorization.
In the fourth quarter, Dillard's shut down three stores,
namely University Mall in Chapel Hill, North Carolina (64,000
square feet), Collin Creek Mall location in Plano, Texas (195,000
square feet) and Twin Peaks Mall location in Longmont, Colorado
(90,000 square feet). Including these closures, the company
shuttered six stores in fiscal 2013.
As of Feb 1, 2014, Dillard's had about 278 namesake outlets
and 18 clearance centers operating in 29 states and an Internet
store at www.dillards.com. Total square footage as of Feb 1, 2014
was 50.5 million.
Fiscal 2014 Outlook
Dillard's expects fiscal 2014 depreciation and amortization
expenses to be about $260 million while rentals are projected at
approximately $26 million. Net interest and debt expenses are
expected to be nearly $60 million.
Moreover, the company expects to spend about $150 million
toward capital expenditure in fiscal 2014, compared with $95
million spent in fiscal 2013.
Other Stocks to Consider
Currently, Dillard's holds Zacks Rank #4 (Sell). However, some
better-performing retailers include
Christopher & Banks Corp.
Finish Line Inc.
). Of these, Christopher & Banks has a Zacks Rank #1 (Strong
Buy) while Macy's and Finish Line carry a Zacks Rank #2
CHRISTOPHER&BNK (CBK): Free Stock Analysis
DILLARDS INC-A (DDS): Free Stock Analysis
FINISH LINE-CLA (FINL): Free Stock Analysis
MACYS INC (M): Free Stock Analysis Report
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