Dillard’s Posts Profit in Fourth Quarter
Dillard’s managed to hold its own in the final quarter of the year, thanks to the company’s ability to cut expenses while navigating through the pandemic. And it’s hopeful that warmer temperatures and lower infection rates due to COVID-19 will help the company even more as 2021 goes on.
In the fourth quarter ended Jan. 30, the Little Rock, Ark.-based department store chain reported net income of $67 million, or $3.05 a share, compared to net income of $67.7 million, or $2.75 a share, in the prior year’s fourth quarter. Included in net income for the 13 weeks this year is a non-cash pretax charge of $10.7 million in asset impairment related to certain clearance locations.
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Comparable-store sales for the 13-week period declined 17 percent, which was an improvement over the 24 percent decrease posted in the third quarter, the company said. Total retail sales fell 19 percent to $1.5 billion, down from $1.9 billion in the prior-year period. By region, sales in the Eastern region outperformed the Central and Western regions, the company said, and home and furniture significantly outperformed the other merchandise categories followed by cosmetics and shoes. Sales of women’s apparel were significantly below trend.
William T. Dillard 2nd, chief executive officer, said: “Our yearlong efforts to control inventory and expenses and preserve liquidity have resulted in encouraging fourth-quarter results. We ended the year with $360 million in cash and inventory down 26 percent. Retail gross margin improved 171 basis points, and operating expenses declined $123 million. Our team’s ability to adjust to the changing circumstances throughout the year made us proud. We are optimistic increased vaccinations, warmer weather and fresh fashions will motivate Americans to shop this spring.”
For the year, Dillard’s reported a net loss of $71.7 million, or $3.16 a share, compared to net income of $111.1 million, or $4.38 a share, for the prior year’s 52-week period. Included in the net loss for the 52 weeks ended Jan. 30 is a $2.2 million pretax primarily related to the sale of a store property and $10.7 million in asset impairment related to certain clearance locations.
Total retail sales for the 52-week period fell 32 percent to $4.2 billion compared to $6 billion the prior year. The retailer did not report comparable store sales data for the fiscal year due to COVID-19 related store closures in the first and second quarters.
Dillard’s operates 250 full-line department stores and 32 clearance centers in 29 states. The company did not provide any further details or host a call with analysts after reporting its results Monday afternoon after the close of the market. The stock closed at $80.85, up 3.3 percent, and rose slightly to $81 in after-hours trading.
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