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Apparel and Home Goods Lift Dillard’s to Solid First Quarter Results

Dillard’s Inc. said a strong consumer spending environment helped boost the top and bottom lines in the first quarter, led by apparel and home goods.

In a Nutshell: Dillard’s, which operates 267 signature department stores and 25 clearance centers spanning 29 states, posted strong increases in sales and income in the quarter.

The company, which also sells on dillards.com, said sales of home and furniture, women’s accessories and lingerie, plus juniors’ and children’s apparel, were above the average company sales trend in the three months. Sales were slightly above trend in men’s apparel and accessories, on trend in women’s apparel, slightly below trend in cosmetics and notably below trend in shoes, the retailer noted. Sales were strongest in the Western region followed by the Eastern and Central regions.

Sales: Net sales for the first quarter ended May 5 rose 2.7% to $1.46 billion compared to $1.42 billion for the 13 weeks ended April 29, 2017. Net sales includes the operations of the company’s construction business, CDI Contractors. Total merchandise sales, which excludes CDI, for the 13-weeks grew 1.7% to $1.41 billion from $1.39 billion for the 13-week period ended April 29. Sales in comparable stores for the period also increased 2 percent.

Earnings: Net income for the quarter increased 21.4% to $80.5 million compared to net income of $66.3 million for the prior-year period. Gross margin from retail operations declined 31 basis points of sales for the quarter compared to the same time last year.

CEO’s Take: CEO William T. Dillard II, said: “Our positive sales momentum continued into the first quarter. We believe this indicates our customer is more comfortable spending in this economic environment and we hope the positive trend continues. We executed $35 million of share repurchases during the quarter, completing the amount authorized under our February 2016 program.”

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