Dillard's Inc. DDS, a large departmental store chain featuring fashion apparel, cosmetics and home furnishings, has witnessed significant downward revision in the Zacks Consensus Estimate following a soft start to fiscal 2015. Shares of this Zacks Rank #5 (Strong Sell) stock have plunged roughly 15.3% since its last earnings release on May 14.
Over the past 60 days, the Zacks Consensus Estimate of $8.16 and $8.92 per share for fiscal 2015 and fiscal 2016 declined 5.8% and 7.9%, respectively.
The retail landscape continues to challenge many companies despite an 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.
In first-quarter fiscal 2015, the company’s adjusted earnings per share of $2.66 fell short of the Zacks Consensus Estimate of $2.80. Earnings were lower than expected due to a decline in merchandise sales, which deleveraged operating expenses. Merchandise sales, excluding CDI, fell 1.4% to $1,518 million while merchandise comps were down 1%.
Moreover, the company’s guidance for fiscal 2015 indicates significant cost pressures for the year which might hurt the bottom line again, leading to the estimates revisions.
The company has underperformed the Zacks Consensus Estimates in all of the last four quarters, with an average quarterly miss of 5.4%.
Stocks that Warrant a Look
A better-ranked stock in the same industry is J. C. Penney Company Inc. JCP, holding a Zacks Rank #2 (Buy). Other better-ranked stocks in the broader retail sector include American Eagle Outfitters Inc. AEO and Express Inc. EXPR, both carrying a Zacks Rank #1 (Strong Buy).
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