Strong apparel sales helped Dillard’s best Wall Street’s adjusted diluted earnings per share (EPS) projections for the first quarter by $6.94.
In a Nutshell: Dillard’s said Thursday that “positive customer response to the company’s merchandise assortment combined with inventory management” led to a decrease in first-quarter markdowns. Stronger performance categories included “men’s apparel and accessories, women’s apparel and juniors’ and children’s apparel,” the company said.
Strong apparel sales have driven business at the Little Rock, Ark.-based department store for several quarters.
Dillard’s said inventory rose 4 percent in the quarter, while retail gross margin improved to 47.3 percent of sales versus 42.6 percent in the year-ago quarter.
Net Sales: For the three months ended April 30, net sales grew 21 percent to $1.61 billion from $1.33 billion.
The company said net sales included the operations of the company’s construction business, CDI Contractors LLC. Excluding CDI, total retail sales rose 22 percent to $1.58 billion. Comparable store sales for the quarter rose 23 percent.
Earnings: Net income for the quarter jumped 59 percent to $251.1 million, or $13.68 a diluted share, from $158.2 million, or $7.25, in the year-ago quarter.
Net income in the quarter was boosted by a pretax gain of $7.2 million related to the sale of a store property. Included in net income for the prior year was a pretax gain of $24.6 million related to the sale of three store properties.
Wall Street expected adjusted diluted EPS of $6.74 on revenue of $1.55 billion.
CEO’s Take: “Our customer responded well to our merchandise in the first quarter producing a 23 percent increase in same-store sales. From this strong sell through, we reported a record high retail gross margin of 47.3 percent leading to net income of $251 million or $13.68 per share,” CEO William T. Dillard, II said.