Dillard’s reported sales, and its comparable sales, dropped 6% because of weakening sales starting in September. A closer look at the results shows the strongest performance was in cosmetics, followed by home and furniture. The weakest areas were juniors’ apparel and children’s apparel. Women’s apparel, typically one of the strongest areas in Dillard’s stores, appeared to have a weak performance as well. Net sales for the third quarter were $1,476 million compared to $1,544 million last year.
Third quarter earnings were helped by the closing and sale of a store in MacArthur Center in Norfolk, Virginia. That transaction had a pretax gain of $4.0 million, which is $3.1 million after tax or $0.19 per share. The company reported net income for the thirteen weeks of $155.3 million or $ 9.49 per share compared to 2022 results of $187.9 million or $10.96 per share.
One of the most notable achievements was Dillard’s tight control of merchandise. Merchandise inventories dropped 1% to $1,629.2 million from $1,644.7 million last year. That is a great accomplishment.
Here is what Dillard’s CEO William T. Dillard II said about the earnings of the third quarter: “The sales environment remained challenging in the third quarter with particular weakness beginning in September. Our focus on producing profitable sales with inventory control paid off – with a retail gross margin of 45.3% and inventory down 1% year over year. We repurchased $48 million of stock and ended with $893 million of cash and short-term investments remaining.”
Looking to the future, on November 8, the company announced the debut of the ‘Nastia Liukin for Gianni Bini’ collection. It has been exclusively designed with Olympic Gold Medalist, Nastia Liukin. The collection includes apparel and footwear. Nastia Lukin won five medals at the 2008 Olympic games in Beijing, including the coveted All-Around Gold medal. Of note, she has been inducted into the International Gymnastics Hall of Fame (based in Oklahoma, USA).
Dillard’s vice president Alexandra Dillard Lucie adds: “We could not be more excited about Nastia’s stunning creations for Gianni Bini. The gorgeous pieces are an ode to the modern woman whose fashion needs are as diverse as her calendar. Just in time for the holidays, from festive work parties and holiday gatherings in cold weather staples with a twist, this collection embodies your dream capsule collection.”
POSTSCRIPT: Dillard’s has long been a leader in the South. It sells Sothern Cookbooks and featuring Southern Fashion. Nastia Lukin’s new fashion line should have great appeal and will sell in all stores.
It is likely that holiday sales will be stronger. For the three quarters recently ended, the company reported a sales decrease of 5% and a comparable sales decrease of 4%. Net income was $488.2 billion compared to $602.5 billion last year.