Dillard's, Inc. Reports Record Second Quarter Earnings per Share

Dillard's, Inc. Reports Record Second Quarter Earnings per Share

LITTLE ROCK, Ark.--(BUSINESS WIRE)-- Dillard's, Inc. (NYS: DDS) (the "Company" or "Dillard's") announced operating results for the 13 and 26 weeks ended August 3, 2013. This release contains certain forward-looking statements. Please refer to the Company's cautionary statements regarding forward-looking information included below under "Forward-Looking Information."

Highlights of the Company's Second Quarter Performance

  • A 25% increase in second quarter earnings per share compared to the prior year
  • A 1% increase in comparable store sales
  • Merchandise gross margin improvement of 10 basis points of sales

Second Quarter Results

Dillard's reported net income for the 13 weeks ended August 3, 2013 of $36.5 million, or $0.79 per share compared to net income of $31.0 million, or $0.63 per share, for the prior year second quarter.

Dillard's Chief Executive Officer, William T. Dillard, II, stated, "Following a strong start to the year, we made further progress in the second quarter. Positive comparable store sales and gross margin expansion combined with continued expense control enabled us to report another quarter of year over year improvement at Dillard's."

26 Week Results

Dillard's reported net income for the 26 weeks ended August 3, 2013 of $153.7 million, or $3.30 per share compared to net income of $126.0 million, or $2.53 per share, for the prior year 26-week period. Included in net income for the 26-week period ended August 3, 2013 is a net after-tax credit totaling $4.4 million ($0.09 per share) comprised of the following three items:

  • A $7.6 million after tax gain ($0.16 per share) related to the sale of an investment
  • A $1.0 million after tax credit ($0.02 per share) related to a pension adjustment
  • After-tax asset impairment and store closing charges of $4.2 million ($0.09 per share)

Excluding this credit, Dillard's would have reported net income of $149.3 million ($3.20 per share) for the 26-week period ended August 3, 2013, a 26% earnings per share increase over the prior year 26-week performance.

Net Sales

Net sales for the 13 weeks ended August 3, 2013 were $1.480 billion and $1.488 billion for the 13 weeks ended July 28, 2012. Net sales include the operations of the Company's construction business, CDI Contractors, LLC ("CDI").

Total merchandise sales (which exclude CDI) for the 13-week period ended August 3, 2013 were $1.459 billion and $1.456 billion for the 13-week period ended July 28, 2012. Total merchandise sales were unchanged on a percentage basis for the 13-week period ended August 3, 2013. Sales in comparable stores for the period increased 1%.

Sales trends were notably strong in ladies' accessories and lingerie followed by juniors' and children's apparel. Sales were weakest in the home and furniture category followed by ladies' apparel. Sales trends were strongest in the Central region, followed by the Western and Eastern regions, respectively.

Gross Margin/Inventory

Gross margin from retail operations (which excludes CDI) improved 10 basis points of sales to 34.4% for the 13 weeks ended August 3, 2013 compared to 34.3% for the prior year second quarter. Consolidated gross margin for the 13 weeks ended August 3, 2013 improved 40 basis points of sales to 34.0% from 33.6% during the prior year second quarter. Inventory increased 7% at August 3, 2013 compared to July 28, 2012.

Selling, General & Administrative Expenses

Selling, general and administrative expenses ("operating expenses") were $398.2 million (26.9% of sales) and $398.8 million (26.8%) during the 13 weeks ended August 3, 2013 and the 13 weeks ended July 28, 2012, respectively. Decreases in advertising expense and services purchased were partially offset by increases in selling payroll expense and insurance.

Store Information

During the second quarter of 2013, the Company closed its Randolph Mall location in Asheboro, North Carolina (60,000 square feet).

At August 3, 2013, the Company operated 282 Dillard's locations and 18 clearance centers spanning 29 states and an Internet store at www.dillards.com. Total square footage at August 3, 2013 was 50.9 million.

 
 
 

Dillard's, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In Millions, Except Per Share Data)

 

 

13 Weeks Ended

 

13 Weeks Ended

August 3, 2013

 

July 28, 2012

  
% of% of

Amount

Net

Sales

Amount

Net

Sales

 
Net sales$1,479.9

100.0.

%

$1,487.9

100.0.

%

Service charges and other income 36.92.5 37.32.5
1,516.8102.51,525.2102.5
 
Cost of sales976.866.0987.866.4
Selling, general and administrative expenses398.226.9398.826.8
Depreciation and amortization64.24.364.24.3
Rentals5.50.48.60.6
Interest and debt expense, net16.31.117.71.2
Gain on disposal of assets-0.0

0.1

0.0

Income before income taxes and income on and equity in losses of joint ventures

55.83.848.23.2
Income taxes19.717.3
Income on and equity in losses of joint ventures 0.40.0 0.10.0
Net income$36.52.5%$31.02.1%
 
Basic earnings per share$0.79$0.64
Diluted earnings per share$0.79$0.63
Basic weighted average shares 46.3 48.3
Diluted weighted average shares 46.3 49.2

 
 
 

Dillard's, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In Millions, Except Per Share Data)

 

 

26 Weeks Ended

 

26 Weeks Ended

August 3, 2013

 

July 28, 2012

  
% of% of

Amount

Net

Sales

Amount

Net

Sales

 
Net sales$3,029.0

100.0

%

$3,037.2

100.0

%

Service charges and other income 77.22.5 73.92.4
3,106.2102.53,111.1102.4
 
Cost of sales1,914.663.21,944.764.0
Selling, general and administrative expenses788.426.0792.026.1
Depreciation and amortization129.44.3128.24.2
Rentals11.10.416.90.6
Interest and debt expense, net32.61.135.11.2
Gain on disposal of assets

12.4

0.4

1.1

0.0
Asset impairment and store closing charges 6.50.2 -0.0

Income before income taxes and income on and equity in losses of joint ventures

236.07.8195.36.4
Income taxes83.170.3
Income on and equity in losses of joint ventures 0.80.0 1.00.0
Net income$153.75.1%$126.04.1%
 
Basic earnings per share$3.30$2.58
Diluted earnings per share$3.30$2.53
Basic weighted average shares 46.6 48.8
Diluted weighted average shares 46.6 49.8

 
 
 
Dillard's, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(In Millions)
  
August 3,July 28,
20132012
Assets
Current Assets:
Cash and cash equivalents$113.7$162.5
Accounts receivable26.233.4
Merchandise inventories1,459.31,362.1
Other current assets 50.1 44.6
Total current assets1,649.31,602.6
 
Property and equipment, net2,198.72,388.1
Other assets 259.5 270.8
 
Total Assets$4,107.5$4,261.5
 
Liabilities and Stockholders' Equity
Current Liabilities:
Trade accounts payable and accrued expenses$713.1$699.0
Other short term borrowings-24.0
Current portion of long-term debt and capital leases0.978.2

Federal and state income taxes including current deferred taxes

 83.5 74.3
Total current liabilities797.5875.5
 
Long-term debt and capital leases621.9622.8
Other liabilities229.2246.7
Deferred income taxes248.0295.0
Subordinated debentures200.0200.0
Stockholders' equity 2,010.9 2,021.5
 
Total Liabilities and Stockholders' Equity$4,107.5$4,261.5

Read Full Story

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

More to Explore
Fri, Aug 18
Set Your Location
City, State, or Zip
 
 
 
Dillard's, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In Millions)

 
  

26 Weeks

Ended

August 3,


2013

 

26 Weeks

Ended

July 28,


2012

Operating activities:  
Net income$153.7$126.0

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization of property and deferred financing cost

130.3

129.2

Gain on disposal of assets(12.4)(1.1)
Asset impairment and store closing charges6.5-
Excess tax benefits from share-based compensation-(2.0)
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable5.3(4.7)
Increase in merchandise inventories(164.7)(58.1)
Increase in other current assets(7.5)(9.9)
Decrease in other assets1.37.8
Increase in trade accounts payable and accrued expenses and other liabilities

54.9

44.4

Decrease in income taxes payable  (35.7)  (78.8)
Net cash provided by operating activities  131.7   152.8 
Investing activities:
Purchase of property and equipment(40.9)(86.7)
Proceeds from disposal of assets  18.3   7.8 
Net cash used in investing activities  (22.6)  (78.9)
Financing activities:
Principal payments on long-term debt and capital lease

obligations

(1.2

)

(2.0

)

Cash dividends paid(2.3)(5.0)
Purchase of treasury stock(114.7)(153.1)
Increase in short term borrowings-24.0
Excess tax benefits from share-based compensation-2.0
Proceeds from stock issuance-3.7
Issuance cost of line of credit  (1.3)  (5.3)
Net cash used in financing activities  (119.5)  (135.7)
Decrease in cash and cash equivalents(10.4)(61.8)
Cash and cash equivalents, beginning of period  124.1   224.3 
Cash and cash equivalents, end of period $113.7