Comparable Store Sales Increased 2% for Fiscal Year and Fourth Quarter
LITTLE ROCK, Ark.--(BUSINESS WIRE)--
Dillard’s, Inc. (NYSE: DDS) (the “Company” or “Dillard’s”) announced
operating results for the 52 and 13 weeks ended February 2, 2019. The
Company follows the retail 4-5-4 reporting calendar, which included a
53rd week in fiscal 2017. For comparability purposes, certain sales data
is reported using comparable 52 and 13-week periods. 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.”
Fiscal Year Results
Dillard’s reported net income for the 52 weeks ended February 2, 2019 of
$170.3 million, or $6.23 per share, compared to net income of $221.3
million, or $7.51 per share, for the 53 weeks ended February 3, 2018.
Included in net income for the 52-week period ended February 2, 2019 is
$2.9 million ($0.11 per share) in tax benefits related to additional
federal tax credits and an update of the provisional amounts recorded
for the income tax effects of the Tax Cuts and Jobs Act of 2017.
Included in net income for the prior year 53-week period ended February
3, 2018 is a pretax gain on disposal of assets of $4.9 million ($3.2
million after tax or $0.11 per share) and a $0.8 million pretax loss on
extinguishment of debt ($0.5 million after tax or $0.02 per share). Also
included in net income for the prior fiscal year is an estimated tax
benefit of approximately $77.4 million ($2.62 per share) related to the
Tax Cuts and Jobs Act of 2017.
Net sales were $6.356 billion for the 52 weeks ended February 2, 2019
and $6.262 billion for the 53 weeks ended February 3, 2018. Net sales
include the operations of the Company’s construction business, CDI
Contractors, LLC ("CDI").
Total merchandise sales (which exclude CDI) were $6.121 billion for the
52-week period ended February 2, 2019 and $6.108 billion for the 53-week
period ended February 3, 2018. Based upon comparable 52-week periods
ended February 2, 2019 and February 3, 2018, total merchandise sales
increased 2% and sales in comparable stores increased 2%.
Dillard’s Chief Executive Officer, William T. Dillard, II, stated, "Our
2% comparable store sales increase for 2018 is comprised of four
quarters of positive sales. For the year, we held retail gross margin
and operating expenses flat as a percent of sales. Additionally, during
2018, we returned $139 million to shareholders through share repurchases
and dividends."
During the year, the Company purchased $127.9 million of Class A Common
Stock under its share repurchase authorization.
Fourth Quarter Results
Dillard’s reported net income for the 13 weeks ended February 2, 2019 of
$85.1 million, or $3.22 per share, compared to net income of $157.6
million, or $5.55 per share, for the 14 weeks ended February 3, 2018.
Included in net income for the prior year fourth quarter ended February
3, 2018 is an estimated tax benefit of approximately $77.4 million
($2.73 per share) related to the Tax Cuts and Jobs Act of 2017.
Net sales for the 13 weeks ended February 2, 2019 were $2.011 billion
and $2.061 billion for the 14 weeks ended February 3, 2018.
Total merchandise sales were $1.959 billion for the 13-week period ended
February 2, 2019 and $2.024 billion for the 14-week period ended
February 3, 2018. Based upon comparable 13-week periods ended
February 2, 2019 and February 3, 2018, total merchandise sales increased
1% and sales in comparable stores increased 2%.
Sales trends for the fourth quarter were strongest in home and furniture
followed by cosmetics and men's clothing and accessories. Sales were
strongest in the Eastern region followed by the Western and Central
regions, respectively.
During the quarter, the Company purchased $36.0 million of Class A
Common Stock under its share repurchase authorization.
Gross Margin/Inventory
Gross margin from retail operations (which excludes CDI) was flat as a
percentage of sales at 33.6% for the 52 weeks ended February 2, 2019
compared to the 53 weeks ended February 3, 2018. Consolidated gross
margin for the 52 weeks ended February 2, 2019 declined 45 basis points
of sales to 32.5% compared to 32.9% for the 53 weeks ended February 3,
2018. The disparity between retail and consolidated gross margin
performance is attributable to increased operations at CDI, which is a
substantially lower margin business.
Gross margin from retail operations declined 69 basis points of sales to
30.3% for the 13 weeks ended February 2, 2019 compared to 31.0% for the
14 weeks ended February 3, 2018 primarily due to increased markdowns.
Consolidated gross margin for the 13 weeks ended February 2, 2019
declined 90 basis points of sales to 29.6% compared to the prior year
fourth quarter of 30.5%.
Inventory increased 4% at February 2, 2019 compared to February 3, 2018.
Selling, General & Administrative Expenses
Retail selling, general and administrative expenses ("operating
expenses") were flat as a percentage of sales for the 52 weeks ended
February 2, 2019 compared to the 53 weeks ended February 3, 2018. Retail
operating expenses were $1.682 billion (27.5% of sales) and $1.678
billion (27.5% of sales) during the 52 weeks ended February 2, 2019 and
53 weeks ended February 3, 2018, respectively. Consolidated operating
expenses (which include CDI) were $1.691 billion (26.6% of sales) and
$1.685 billion (26.9% of sales) during the 52 weeks ended February 2,
2019 and 53 weeks ended February 3, 2018, respectively.
Retail operating expenses decreased 32 basis points of sales for the 13
weeks ended February 2, 2019 compared to the 14 weeks ended February 3,
2018. Retail operating expenses were $455.1 million (23.2% of sales) and
$476.9 million (23.6% of sales) during the 13 weeks ended February 2,
2019 and 14 weeks ended February 3, 2018, respectively. Consolidated
operating expenses were $458.0 million (22.8% of sales) and $479.0
million (23.2% of sales) during the 13 weeks ended February 2, 2019 and
the 14 weeks ended February 3, 2018, respectively. The decrease in
operating expenses of $21.0 million is due to the additional week of
operations during the prior year fourth quarter.
Share Repurchase
During the 13 weeks ended February 2, 2019, the Company purchased $36.0
million (0.6 million shares) of Class A Common Stock under its $500
million share repurchase program. During the 52 weeks ended February 2,
2019, the Company purchased $127.9 million (1.8 million shares) of Class
A Common Stock. Total shares outstanding (Class A and Class B Common
Stock) at February 2, 2019 and February 3, 2018 were 26.3 million and
28.1 million, respectively. At February 2, 2019, authorization of $406.9
million remained under the plan.
Store Information
During the fourth quarter of 2018, Dillard's closed its West Town Center
clearance location in Cincinnati, Ohio (115,000 square feet). Dillard's
has announced the upcoming closure of its Southern Park Mall location in
Boardman, Ohio (186,000 square feet). The store is expected to close
during the first quarter of 2019. At February 2, 2019, the Company
operated 265 Dillard’s locations and 26 clearance centers spanning 29
states and an Internet store at www.dillards.com.
Total square footage at February 2, 2019 was 49.0 million.
Dillard’s, Inc. and Subsidiaries
|
Condensed Consolidated Statements of Income (Unaudited)
|
(In Millions, Except Per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended
|
|
|
14 Weeks Ended
|
|
|
52 Weeks Ended
|
|
|
53 Weeks Ended
|
|
|
|
February 2, 2019
|
|
|
February 3, 2018
|
|
|
February 2, 2019
|
|
|
February 3, 2018
|
|
|
|
Amount
|
|
|
% of
Net
Sales
|
|
|
Amount
|
|
|
% of
Net
Sales
|
|
|
Amount
|
|
|
% of
Net
Sales
|
|
|
Amount
|
|
|
% of
Net
Sales
|
Net sales
|
|
|
$
|
2,010.6
|
|
|
|
100.0
|
%
|
|
|
$
|
2,060.8
|
|
|
|
100.0
|
%
|
|
|
$
|
6,356.1
|
|
|
|
100.0
|
%
|
|
|
$
|
6,261.5
|
|
|
|
100.0
|
%
|
Service charges and other income
|
|
|
45.7
|
|
|
|
2.3
|
|
|
|
48.4
|
|
|
|
2.3
|
|
|
|
147.2
|
|
|
|
2.3
|
|
|
|
161.2
|
|
|
|
2.6
|
|
|
|
|
2,056.3
|
|
|
|
102.3
|
|
|
|
2,109.2
|
|
|
|
102.3
|
|
|
|
6,503.3
|
|
|
|
102.3
|
|
|
|
6,422.7
|
|
|
|
102.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
1,415.7
|
|
|
|
70.4
|
|
|
|
1,432.5
|
|
|
|
69.5
|
|
|
|
4,291.5
|
|
|
|
67.5
|
|
|
|
4,199.7
|
|
|
|
67.1
|
|
Selling, general and administrative expenses
|
|
|
458.0
|
|
|
|
22.8
|
|
|
|
479.0
|
|
|
|
23.2
|
|
|
|
1,691.2
|
|
|
|
26.6
|
|
|
|
1,685.0
|
|
|
|
26.9
|
|
Depreciation and amortization
|
|
|
55.8
|
|
|
|
2.8
|
|
|
|
54.7
|
|
|
|
2.7
|
|
|
|
223.8
|
|
|
|
3.5
|
|
|
|
231.6
|
|
|
|
3.7
|
|
Rentals
|
|
|
9.0
|
|
|
|
0.4
|
|
|
|
9.1
|
|
|
|
0.4
|
|
|
|
28.6
|
|
|
|
0.5
|
|
|
|
28.0
|
|
|
|
0.4
|
|
Interest and debt expense, net
|
|
|
12.1
|
|
|
|
0.6
|
|
|
|
16.1
|
|
|
|
0.8
|
|
|
|
52.5
|
|
|
|
0.8
|
|
|
|
62.6
|
|
|
|
1.0
|
|
Other expense
|
|
|
1.9
|
|
|
|
0.1
|
|
|
|
1.8
|
|
|
|
0.1
|
|
|
|
7.7
|
|
|
|
0.1
|
|
|
|
8.0
|
|
|
|
0.1
|
|
Gain on disposal of assets
|
|
|
—
|
|
|
|
0.0
|
|
|
|
—
|
|
|
|
0.0
|
|
|
|
—
|
|
|
|
0.0
|
|
|
|
4.9
|
|
|
|
0.1
|
|
Income before income taxes and income on and equity in losses of
joint ventures
|
|
|
103.8
|
|
|
|
5.2
|
|
|
|
116.0
|
|
|
|
5.6
|
|
|
|
208.0
|
|
|
|
3.3
|
|
|
|
212.7
|
|
|
|
3.4
|
|
Income taxes (benefit)
|
|
|
18.7
|
|
|
|
|
|
|
(40.8
|
)
|
|
|
|
|
|
37.7
|
|
|
|
|
|
|
(7.8
|
)
|
|
|
|
Income on and equity in losses of joint ventures
|
|
|
—
|
|
|
|
0.0
|
|
|
|
0.8
|
|
|
|
0.0
|
|
|
|
—
|
|
|
|
0.0
|
|
|
|
0.8
|
|
|
|
0.0
|
|
Net income
|
|
|
$
|
85.1
|
|
|
|
4.2
|
%
|
|
|
$
|
157.6
|
|
|
|
7.6
|
%
|
|
|
$
|
170.3
|
|
|
|
2.7
|
%
|
|
|
$
|
221.3
|
|
|
|
3.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per share
|
|
|
$
|
3.22
|
|
|
|
|
|
|
$
|
5.55
|
|
|
|
|
|
|
$
|
6.23
|
|
|
|
|
|
|
$
|
7.51
|
|
|
|
|
Basic and diluted weighted average shares
|
|
|
26.5
|
|
|
|
|
|
|
28.4
|
|
|
|
|
|
|
27.3
|
|
|
|
|
|
|
29.5
|
|
|
|
|
|
Dillard’s, Inc. and Subsidiaries
|
Condensed Consolidated Balance Sheets (Unaudited)
|
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
February 2,
2019
|
|
|
February 3,
2018
|
Assets
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
123.5
|
|
|
|
$
|
187.0
|
Accounts receivable
|
|
|
49.9
|
|
|
|
38.4
|
Merchandise inventories
|
|
|
1,528.4
|
|
|
|
1,463.6
|
Other current assets
|
|
|
68.8
|
|
|
|
50.4
|
Total current assets
|
|
|
1,770.6
|
|
|
|
1,739.4
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
1,586.7
|
|
|
|
1,696.3
|
Other assets
|
|
|
74.1
|
|
|
|
247.0
|
|
|
|
|
|
|
|
Total Assets
|
|
|
$
|
3,431.4
|
|
|
|
$
|
3,682.7
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
Trade accounts payable and accrued expenses
|
|
|
$
|
921.2
|
|
|
|
$
|
845.3
|
Current portion of long-term debt and capital leases
|
|
|
1.2
|
|
|
|
162.0
|
Federal and state income taxes
|
|
|
11.1
|
|
|
|
41.9
|
Total current liabilities
|
|
|
933.5
|
|
|
|
1,049.2
|
|
|
|
|
|
|
|
Long-term debt and capital leases
|
|
|
367.2
|
|
|
|
368.3
|
Other liabilities
|
|
|
238.8
|
|
|
|
240.2
|
Deferred income taxes
|
|
|
13.5
|
|
|
|
116.8
|
Subordinated debentures
|
|
|
200.0
|
|
|
|
200.0
|
Stockholders' equity
|
|
|
1,678.4
|
|
|
|
1,708.2
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders' Equity
|
|
|
$
|
3,431.4
|
|
|
|
$
|
3,682.7
|
|
Dillard’s, Inc. and Subsidiaries
|
Condensed Consolidated Statements of Cash Flows (Unaudited)
|
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
52 Weeks
Ended
|
|
|
53 Weeks
Ended
|
|
|
|
February 2,
2019
|
|
|
February 3,
2018
|
Operating activities:
|
|
|
|
|
|
|
Net income
|
|
|
$
|
170.3
|
|
|
|
$
|
221.3
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
Depreciation and amortization of property and other deferred cost
|
|
|
225.8
|
|
|
|
233.7
|
|
Deferred income taxes
|
|
|
0.3
|
|
|
|
(102.1
|
)
|
Loss on disposal of assets
|
|
|
—
|
|
|
|
1.0
|
|
Gain from insurance proceeds
|
|
|
—
|
|
|
|
(5.9
|
)
|
Loss on early extinguishment of debt
|
|
|
—
|
|
|
|
0.8
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
(Increase) decrease in accounts receivable
|
|
|
(11.4
|
)
|
|
|
8.9
|
|
Increase in merchandise inventories
|
|
|
(64.9
|
)
|
|
|
(57.2
|
)
|
Increase in other current assets
|
|
|
(17.4
|
)
|
|
|
(1.9
|
)
|
(Increase) decrease in other assets
|
|
|
(10.4
|
)
|
|
|
2.2
|
|
Increase (decrease) in trade accounts payable and accrued expenses
and other liabilities
|
|
|
104.1
|
|
|
|
(20.4
|
)
|
Decrease in income taxes payable
|
|
|
(29.2
|
)
|
|
|
(6.2
|
)
|
Net cash provided by operating activities
|
|
|
367.2
|
|
|
|
274.2
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
(137.0
|
)
|
|
|
(130.5
|
)
|
Proceeds from disposal of assets
|
|
|
2.0
|
|
|
|
11.7
|
|
Proceeds from insurance
|
|
|
3.5
|
|
|
|
5.1
|
|
Distribution from joint venture
|
|
|
3.8
|
|
|
|
3.5
|
|
Net cash used in investing activities
|
|
|
(127.7
|
)
|
|
|
(110.2
|
)
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
Principal payments on long-term debt and capital lease obligations
|
|
|
(162.0
|
)
|
|
|
(90.5
|
)
|
Cash dividends paid
|
|
|
(11.1
|
)
|
|
|
(9.4
|
)
|
Purchase of treasury stock
|
|
|
(129.9
|
)
|
|
|
(223.0
|
)
|
Issuance cost of line of credit
|
|
|
—
|
|
|
|
(1.1
|
)
|
Net cash used in financing activities
|
|
|
(303.0
|
)
|
|
|
(324.0
|
)
|
|
|
|
|
|
|
|
Decrease in cash and cash equivalents
|
|
|
(63.5
|
)
|
|
|
(160.0
|
)
|
Cash and cash equivalents, beginning of period
|
|
|
187.0
|
|
|
|
347.0
|
|
Cash and cash equivalents, end of period
|
|
|
$
|
123.5
|
|
|
|
$
|
187.0
|
|
|
|
|
|
|
|
|
Non-cash transactions:
|
|
|
|
|
|
|
Accrued capital expenditures
|
|
|
$
|
2.6
|
|
|
|
$
|
23.1
|
|
Stock awards
|
|
|
2.7
|
|
|
|
2.7
|
|
Accrued purchase of treasury stock
|
|
|
—
|
|
|
|
2.0
|
|
|
|
|
|
|
|
|
|
|
Estimates for 2019
The Company is providing the following estimates for certain financial
statement items for the fiscal year ending February 1, 2020 based upon
current conditions. Actual results may differ significantly from these
estimates as conditions and factors change - See “Forward-Looking
Information.”
|
|
|
|
|
|
|
In Millions
|
|
|
|
2019
|
|
|
2018
|
|
|
|
Estimated
|
|
|
Actual
|
Depreciation and amortization
|
|
|
$
|
225
|
|
|
|
$
|
224
|
Rentals
|
|
|
28
|
|
|
|
29
|
Interest and debt expense, net
|
|
|
46
|
|
|
|
53
|
Capital expenditures
|
|
|
140
|
|
|
|
137
|
|
|
|
|
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Forward-Looking Information
The foregoing contains certain “forward-looking statements” within the
definition of federal securities laws. The following are or may
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995: statements including (a) words
such as “may,” “will,” “could,” “believe,” “expect,” “future,”
“potential,” “anticipate,” “intend,” “plan,” “estimate,” “continue,” or
the negative or other variations thereof, and (b) statements regarding
matters that are not historical facts. 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) general retail industry conditions and
macro-economic conditions; 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 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
consumer spending patterns, debt levels and their ability to meet credit
obligations; 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; potential disruption from
terrorist activity and the effect on ongoing consumer confidence;
epidemic, pandemic or other public health issues; potential disruption
of international trade and supply chain efficiencies; world conflict 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 February 3, 2018,
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/20190225006020/en/
Dillard’s, Inc.
Julie Johnson Guymon, C.P.A.
501-376-5965
julie.bull@dillards.com
Source: Dillard’s, Inc.