Dillard's Q2 Profit Declines, Stock Down - Update

(RTTNews) - Apparel retailer Dillard's, Inc. (DDS) Friday reported a decline in the second-quarter profit, amid flat sales and lower margins. The stock fell about 8 percent in the morning trade.

For the second quarter, the company's net income declined to $34.5 million from $36.5 million in the previous year. Meanwhile, earnings per share increased to $0.80 from $0.79 last year.

On average, six analysts polled by Thomson Reuters expected the company to report earnings of $0.86 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter were $1.475 billion, compared to $1.480 billion last year. Wall Street analysts' revenue consensus was $1.53 billion for the quarter.

Net sales included the operations of the company's construction business, CDI Contractors, LLC or CDI. Comparable stores sales edged up 1 percent for the quarter.

Total merchandise sales, which excluded CDI, for the 13-week period ended August 2, 2014 were $1.461 billion, compared to $1.459 billion for the 13-week period ended August 3, 2013. Total merchandise sales remained unchanged on a percentage basis for the recent quarter.

According to the firm, sales trends were strongest in juniors' and children's apparel followed by men's apparel and accessories. Sales were weakest in the home and furniture category. Sales trends were strongest in the Central region, followed by the Eastern and Western regions, respectively.

Consolidated gross margin declined 20 basis points of sales compared to the prior-year quarter.

Chief Executive Officer, William Dillard, II, said, "Although our 1% comparable store sales increase led to a profitable quarter, we are somewhat disappointed in the bottom line performance. We are pleased with our inventory management during the quarter and with our ending inventory position."

As at August 2, 2014, the company operated 278 Dillard's locations and 18 clearance centers spanning 29 states and an Internet store at www.dillards.com.

For fiscal 2014, the company expects capital expenditures to be $150 million, compared to $95 million in 2013.

DDS is currently trading at $109.78, down 5.03 percent.