DILLARD’S EARNINGS top forecasts.

Stock price soars 14% after retailer posts $5.5M profit in 3Q

Dillard’s Inc. shares jumped 14% Wednesday after reporting unexpected profits for its third quarter that handily beat analysts’ earnings estimates.

On Thursday before markets opened, the Little Rockbased department store chain posted a profit of $5.5 million or 22 cents a share, for the period ending Nov. 2, compared with $7.4 million, or 27 cents per share, for the same period a year ago. The company’s profits included income of $2.8 million in state tax benefits and $2.9 million in federal tax credits.

According to Yahoo Finance, a consensus of four analysts had anticipated a loss of 25 cents per share.

Dillard’s reported total revenue of $1.42 billion for the period, compared with $1.45 billion for the third quarter last year. A consensus of three analysts had pegged revenue at $1.42 billion. Net sales were $1.39 billion for the third quarter, compared with $1.42 billion for the third quarter of 2018.

Dillard’s chief executive William Dillard said in a statement that while the retailer isn’t satisfied with the third-quarter results, it was a substantial improvement over the second quarter when the company reported a loss of $40.7 million, or 66 cents per share.

Dillard’s shares surged in

early trading Thursday and never gave up their gains. Dillard’s shares closed at $77.41, up $9.60, or a little more than 14%, on the New York Stock Exchange. Shares have traded as low as $47.95 and as high as $86.71 over the past year.

This is the second quarter in four where Dillard’s has bested earnings estimates.

Other department store stocks ticked upward slightly in trading Thursday, with Dillard’s the first major chain reporting its results for the quarter.

Macy’s Inc. saw its shares up 1% Thursday and according to analysts estimates is expected to not see a profit when it posts earnings on Nov. 21. J.C. Penny Co. shares were up less than 1% and is expected to post a loss when it releases results today. Nordstroms Inc., which saw its shares rise nearly 2%, is expected to report a slight decline in profits when it releases earnings Nov. 21. Kohl’s Corp. saw its shares increase a little more than 1% with the company expected to release earnings on Tuesday.

Going into the Christmas shopping season, most department store chains are bullish on their sales predictions but the shorter shopping season has some concerned.

Total merchandise sales at Dillard’s stood at $1.33 billion for the third quarter, down slightly from $1.34 billion for the same period last year. Sales in stores open at least a year, or same-store sales — a key metric — were flat, the company said, with sales strongest in the Eastern, Western and Central regions, respectively.

Gross margin from retail was up for the quarter and inventory decreased 4% when compared with the third quarter of 2018. Operating expenses were $418.1 million for the period, down slightly from $418.9 million a year ago.

Dillard’s said that it plans to open an expansion at Killeen Mall in Killeen, Texas, replacing 70,000 square feet of leased space with 75,000 square feet of companyowned space by the end of the fiscal year. In the first quarter of 2020, it plans to open an 85,000-square-foot expansion in Columbia Mall in Columbia, Mo. And sometime early in 2020 Dillard’s intends to replace 100,000 square feet of leased space at Richland Fashion Mall in Waco, Texas, with 125,000 square feet of company-owned space. Dillard’s plans to close its Fiesta Mall Clearance Center in Mesa, Ariz., in January.

During the quarter, Dillard’s bought back shares valued at $35.2 million, and it has repurchased $101.5 million in shares year to date.

Dillard’s has 259 locations and 30 clearance centers in 29 states, with total square footage of 48.9 million at the end of the third quarter.

Arkansas Democrat-Gazette