Dillard’s, Inc. (NYSE: DDS) (the “Company” or “Dillard’s”)
announced operating results for the 13 weeks ended April 29, 2023.
This release contains certain forward-looking statements. Please
refer to the Company’s cautionary statements included below under
“Forward-Looking Information.”
Dillard’s Chief Executive Officer William T. Dillard, II
stated, “We had a good quarter against a tough comparison. We
achieved retail gross margin of 45.6% on a sales decrease of 4% as
customer activity declined in the back half of the quarter. We
repurchased $113.8 million of stock and still had $955 million in
cash and short-term investments remaining.”
Highlights of the First Quarter (compared to the prior year
first quarter):
- Total retail sales decreased 4%
- Comparable store sales decreased 4%
- Net income of $201.5 million compared to $251.1
million
- Earnings per share of $11.85 compared to $13.68
- Retail gross margin of 45.6% of sales compared to 47.3% of
sales
- Operating expenses were $406.4 million (25.7% of sales)
compared to $400.8 million (24.9% of sales)
- Share repurchase of $113.8 million (approximately 357,000
shares)
- Ending inventory increase of 3%
First Quarter Results
Dillard’s reported net income for the 13 weeks ended April 29,
2023 of $201.5 million, or $11.85 per share, marking the Company’s
second highest first quarter net income performance. This compares
to $251.1 million, or $13.68 per share, for the prior year 13-week
period. Included in net income for the 13 weeks ended April 29,
2023 is a pretax gain of $1.8 million ($1.4 million after tax or
$0.08 per share) primarily related to the sale of a store
property.
Included in net income for the prior year 13-week period ended
April 30, 2022 is a pretax gain of $7.2 million ($5.6 million after
tax or $0.31 per share) primarily related to the sale of a store
property.
Sales
Net sales for the 13 weeks ended April 29, 2023 and April 30,
2022 were $1.584 billion and $1.612 billion, respectively. Net
sales includes the operations of the Company’s construction
business, CDI Contractors, LLC (“CDI”).
Total retail sales (which excludes CDI) for the 13 weeks ended
April 29, 2023 and April 30, 2022 were $1.515 billion and $1.581
billion, respectively. Total retail sales decreased 4% for the
13-week period ended April 29, 2023 compared to the prior year
first quarter. Sales in comparable stores decreased 4%. The Company
noted a decline in customer activity in the back half of the
quarter. Cosmetics was the strongest performing category followed
by shoes and ladies’ apparel. Ladies’ accessories and lingerie and
juniors’ and children’s apparel were the weakest categories.
Gross Margin
Consolidated gross margin for the 13 weeks ended April 29, 2023
was 43.7% of sales compared to 46.5% of sales for the prior year
first quarter.
Retail gross margin (which excludes CDI) for the 13 weeks ended
April 29, 2023 was 45.6% of sales compared to a record 47.3% of
sales for the prior year first quarter.
Selling, General & Administrative Expenses
Consolidated selling, general and administrative expenses
(“operating expenses”) for the 13 weeks ended April 29, 2023 were
$406.4 million (25.7% of sales) compared to $400.8 million (24.9%
of sales) for the prior year first quarter.
Share Repurchase
During the 13 weeks ended April 29, 2023, the Company purchased
$113.8 million (approximately 357,000 shares) of Class A Common
Stock at an average price of $318.66 per share.
As of April 29, 2023, authorization of $61.6 million remained
under the February 2022 program.
Total shares outstanding (Class A and Class B Common Stock) at
April 29, 2023 and April 30, 2022 were 16.8 million and 18.1
million, respectively.
Store Information
The Company operates 247 Dillard’s locations and 27 clearance
centers spanning 29 states (47.0 million square feet) and an
Internet store at dillards.com.
Dillard’s, Inc. and
Subsidiaries
Condensed Consolidated Statements
of Income (Unaudited)
(In Millions, Except Per Share
Data)
13 Weeks Ended
April 29, 2023
April 30, 2022
% of
% of
Net
Net
Amount
Sales
Amount
Sales
Net sales
$
1,583.9
100.0
%
$
1,611.7
100.0
%
Service charges and other income
30.0
1.9
31.1
1.9
1,613.9
101.9
1,642.8
101.9
Cost of sales
891.3
56.3
861.4
53.5
Selling, general and administrative
expenses
406.4
25.7
400.8
24.9
Depreciation and amortization
45.7
2.9
46.2
2.9
Rentals
4.4
0.3
5.1
0.3
Interest and debt expense, net
0.1
—
10.6
0.7
Other expense
4.7
0.3
1.9
0.1
Gain on disposal of assets
1.8
0.1
7.2
0.4
Income before income taxes
263.1
16.6
324.0
20.1
Income taxes
61.6
72.9
Net income
$
201.5
12.7
%
$
251.1
15.6
%
Basic and diluted earnings per share
$
11.85
$
13.68
Basic and diluted weighted average shares
outstanding
17.0
18.4
Dillard’s, Inc. and
Subsidiaries
Condensed Consolidated Balance
Sheets (Unaudited)
(In Millions)
April 29,
April 30,
2023
2022
Assets
Current Assets:
Cash and cash equivalents
$
848.3
$
862.2
Restricted cash
8.4
—
Accounts receivable
59.1
30.9
Short-term investments
98.4
—
Merchandise inventories
1,410.0
1,365.0
Other current assets
79.0
96.2
Total current assets
2,503.2
2,354.3
Property and equipment, net
1,108.7
1,170.3
Operating lease assets
32.9
39.7
Deferred income taxes
41.8
29.1
Other assets
62.4
65.4
Total Assets
$
3,749.0
$
3,658.8
Liabilities and Stockholders’ Equity
Current Liabilities:
Trade accounts payable and accrued
expenses
$
1,099.7
$
1,163.3
Current portion of long-term debt
—
44.8
Current portion of operating lease
liabilities
9.1
11.3
Federal and state income taxes
82.0
99.3
Total current liabilities
1,190.8
1,318.7
Long-term debt
321.4
321.3
Operating lease liabilities
23.7
28.5
Other liabilities
330.0
278.0
Subordinated debentures
200.0
200.0
Stockholders’ equity
1,683.1
1,512.3
Total Liabilities and Stockholders’
Equity
$
3,749.0
$
3,658.8
Dillard’s, Inc. and
Subsidiaries
Condensed Consolidated Statements
of Cash Flows (Unaudited)
(In Millions)
13 Weeks Ended
April 29,
April 30,
2023
2022
Operating activities:
Net income
$
201.5
$
251.1
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization of property
and other deferred cost
46.1
46.6
Gain on disposal of assets
(1.8
)
(7.2
)
Accrued interest on short-term
investments
(1.9
)
—
Changes in operating assets and
liabilities:
(Increase) decrease in accounts
receivable
(2.1
)
8.9
Increase in merchandise inventories
(289.8
)
(284.8
)
Decrease (increase) in other current
assets
7.2
(18.5
)
Increase in other assets
(0.4
)
(0.4
)
Increase in trade accounts payable and
accrued expenses and other liabilities
261.6
293.5
Increase in income taxes
60.5
76.0
Net cash provided by operating
activities
280.9
365.2
Investing activities:
Purchase of property and equipment and
capitalized software
(32.4
)
(27.3
)
Proceeds from disposal of assets
1.9
8.1
Proceeds from insurance
—
4.4
Purchase of short-term investments
(97.5
)
—
Proceeds from maturities of short-term
investments
150.0
—
Net cash provided by (used in) investing
activities
22.0
(14.8
)
Financing activities:
Cash dividends paid
(3.4
)
(3.9
)
Purchase of treasury stock
(103.1
)
(201.1
)
Net cash used in financing activities
(106.5
)
(205.0
)
Increase in cash and cash equivalents and
restricted cash
196.4
145.4
Cash and cash equivalents and restricted
cash, beginning of period
660.3
716.8
Cash and cash equivalents and restricted
cash, end of period
$
856.7
$
862.2
Non-cash transactions:
Accrued capital expenditures
$
8.6
$
6.7
Accrued purchase of treasury stock
11.9
1.6
Lease assets obtained in exchange for new
operating lease liabilities
1.8
—
Estimates for 2023
The Company is providing the following estimates for certain
financial statement items for the 53-week period ending February 3,
2024 based upon current conditions. Actual results may differ
significantly from these estimates as conditions and factors change
- See “Forward-Looking Information.”
In Millions
2023
2022
Estimated
Actual
Depreciation and amortization
$
180
$
188
Rentals
22
23
Interest and debt (income) expense,
net
(3
)
31
Capital expenditures
150
120
Forward-Looking Information
This report contains certain forward-looking statements. The
following are or may constitute forward- looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995: (a) statements including words such as “may,” “will,”
“could,” “should,” “believe,” “expect,” “future,” “potential,”
“anticipate,” “intend,” “plan,” “estimate,” “continue,” or the
negative or other variations thereof; (b) statements regarding
matters that are not historical facts; and (c) statements about the
Company’s future occurrences, plans and objectives, including
statements regarding management’s expectations and forecasts for
the 53-week period ended February 3, 2024 and beyond, statements
concerning the opening of new stores or the closing of existing
stores, statements concerning capital expenditures and sources of
liquidity and statements concerning estimated taxes. The Company
cautions that forward-looking statements contained in this report
are based on estimates, projections, beliefs and assumptions of
management and information available to management at the time of
such statements and are not guarantees of future performance. The
Company disclaims any obligation to update or revise any
forward-looking statements based on the occurrence of future
events, the receipt of new information or otherwise.
Forward-looking statements of the Company involve risks and
uncertainties and are subject to change based on various important
factors. Actual future performance, outcomes and results may differ
materially from those expressed in forward-looking statements made
by the Company and its management as a result of a number of risks,
uncertainties and assumptions. Representative examples of those
factors include (without limitation) the COVID-19 pandemic and its
effects on public health, our supply chain, the health and
well-being of our employees and customers and the retail industry
in general; other general retail industry conditions and
macro-economic conditions including inflation and changes in
traffic at malls and shopping centers; economic and weather
conditions for regions in which the Company’s stores are located
and the effect of these factors on the buying patterns of the
Company’s customers, including the effect of changes in prices and
availability of oil and natural gas; the availability of and
interest rates on consumer credit; the impact of competitive
pressures in the department store industry and other retail
channels including specialty, off-price, discount and Internet
retailers; changes in the Company’s ability to meet labor needs
amid nationwide labor shortages and an intense competition for
talent, changes in consumer spending patterns, debt levels and
their ability to meet credit obligations; high levels of
unemployment; changes in tax legislation; changes in legislation,
affecting such matters as the cost of employee benefits or credit
card income; adequate and stable availability and pricing of
materials, production facilities and labor from which the Company
sources its merchandise; changes in operating expenses, including
employee wages, commission structures and related benefits; system
failures or data security breaches; possible future acquisitions of
store properties from other department store operators; the
continued availability of financing in amounts and at the terms
necessary to support the Company’s future business; fluctuations in
LIBOR and other base borrowing rates; the elimination of LIBOR;
potential disruption from terrorist activity and the effect on
ongoing consumer confidence; other epidemic, pandemic or public
health issues; potential disruption of international trade and
supply chain efficiencies; any government-ordered restrictions on
the movement of the general public or the mandated or voluntary
closing of retail stores in response to the COVID-19 pandemic;
global conflicts (including the recent conflict in Ukraine) and the
possible impact on consumer spending patterns and other economic
and demographic changes of similar or dissimilar nature. The
Company's filings with the Securities and Exchange Commission,
including its Annual Report on Form 10-K for the fiscal year ended
January 28, 2023, contain other information on factors that may
affect financial results or cause actual results to differ
materially from forward-looking statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230511005300/en/
Dillard’s, Inc. Julie J. Guymon 501-376-5965
julie.guymon@dillards.com
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