The landscape continues to be challenging for many retailers despite improving economy and healing labor markets as consumers are still reluctant to spend their savings from low gas prices. Declining sales and rising costs continue to hurt Dillard’s earnings.
Founded in 1938, Dillard's Inc (DDS) is a large departmental store chain featuring fashion apparel, cosmetics and home furnishings. The company went public in 1969 and it currently operated about 300 stores across 29 states. Their merchandise includes both national and exclusive brands.
Disappointing Results
The company reported its fiscal Q1 results on May 14. Adjusted earnings per share of $2.66 missed the Zacks Consensus Estimate of $2.80. Net sales were up 1.4% year over year to $1.57 billion; merchandise sales, however fell 1.4% to $1.51 billion.
Merchandise comparable-store sales for the quarter decreased 1% from the same period a year ago.
During the quarter, sales were notably weak in the home and furniture category. For fiscal 2015, the company maintained its guidance.
Falling Estimates
Analysts have been cutting their estimates for the company after quarterly results. Zacks Consensus Estimates for the current and the next fiscal year are now $8.16 per share and $8.92 per share respectively, down from 8.66 per share and $9.69 per share, before the results. Declining estimates sent the stock back to Zacks Rank # 5 last week.
The company has missed Zacks Consensus Estimates in all of the last four quarters, with an average quarterly surprise of 5.4%.
The Bottom Line
Declining store traffic and highly promotional environment continue to present challenges for retailers. The Zacks industry rank for Retail-Regional Department Stores is currently 240 out of 265 (Bottom 9%).
Investors seeking exposure to the industry could look at J. C. Penney, which currently holds a Zacks Rank #2 (Buy).
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