Dillard’s 3rd Quarter Beats Expectations

Dillard’s reported 3^rd quarter 2022 earnings which showed excellent control of the business. The company was up against a very strong third quarter last year when comparable store sales increased 48%. This year the company reported an increase of 3% in total sales and also in comparable sales. Net income was $187.9 million compared to $197.3 million.Net earnings per share was $10.96 compared to $9.81 in last year’s 3^rd quarter.

Last year the company had the first strong post-pandemic performance in the third quarter and continued the trend forward this year. Mr. William Dillard II stressed in his remarks that while “we were up against an unprecedented third quarter, we achieved a 3% comparable store sales increase and reported our seventh quarter of gross margin over 40%. Inventory controls remains a priority, as we have seen its powerful effects on our business. To date this year, our net increase is up 11% over last year’s strong performance and earnings per share are up 37%.”

Inventory is up 8% at the end of the quarter, reflecting tight management control on inventory. The company is ready for strong holiday business with timely fashion merchandise. Retail gross margin was 45.7% in the quarter.

The company did purchase $24.3 million (or approximately 99,000 shares) of class A stock at an average price of $245.00 per shares under the share repurchasing program. For the 39 weeks the company has repurchased $436.6 million (approx. 1,709,000 shares) at an average price of $255.48 per share.

In the third quarter the company closed 2 stores located in Texas and Missouri. It is reopening today a replacement building in Amarillo, Texas. The building replaces a leased location at the Westlake Mall where the company operates a dual anchor format. The current store count is 249 Dillard’s locations and 28 clearance centers. The copay operates in 28 states.

One must congratulate management on the swift release of these third quarter earnings. Once again Dillard’s is the first retail company to report in the quarter. Other major retails will report next week.

POSTSCRIPT: Dillard’s Southern locations are a boost to the company’s growth. The company’s stores are filled with timely merchandise and clearances are relegated to the clearance centers. We expect a strong year-end performance from this management.