On Oct 21, 2013, we reiterated our long-term recommendation on
) at Outperform, based on its strong bottom-line results for the
second consecutive quarter.
With a positive earnings surprise of 21.5% in the second quarter,
the company has surpassed the Zacks Consensus Estimate for the
second consecutive quarter as well as thrice in the trailing 4
quarters. The average earnings surprise for the past 4 quarters
was approximately 16.0%.
The company's second-quarter fiscal 2013 earnings benefitted
from the successful execution of its long-term growth strategies
and the strength of its distinguished and varied assortments.
We expect the company to maintain this trend of posting positive
earnings surprises in the years ahead, based on its focus on
boosting productivity at existing stores, developing a leading
omni-channel platform and enhancing its presence domestically.
Looking at the products offering, we note the company's strategy
of offering more fashion-forward and trendy products has
effectively attracted more customers to its stores. This is
evident from positive comparable store sales performance in the
trailing 11 quarters. Further, improved comparable store sales
performance and enhanced e-Commerce capabilities have helped
Dillard's report sales growth over the last several quarters.
Moreover, its wholly owned Captive Insurance Company and REIT
facilitate efficient risk management and boost its liquidity
position. On the other hand, we appreciate the company's prudent
inventory management that focuses more on conservative purchasing
and efforts to better match the timing of receipts with demand,
which ultimately result in reduced markdowns.
Other Stocks Worth Considering
Other stocks that are worth considering in the retail industry
Best Buy Co. Inc.
Fortune Brands Home & Security Inc.
Rite Aid Corp.
). All these stocks carry a Zacks Rank #1 (Strong Buy).
BEST BUY (BBY): Free Stock Analysis Report
DILLARDS INC-A (DDS): Free Stock Analysis
FORTUNE BRD H&S (FBHS): Free Stock Analysis
RITE AID CORP (RAD): Free Stock Analysis
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