KSS Kohls Corporation

Dillard's Inc. (DDS), the leading apparel and home-furnishing retailer in the United States, reported a decline of 1.0% in same store sales for the five-week period ended April 02, 2011 compared with an increase of 9.0% for the five-week period ended April 03, 2010. The sales results were negatively impacted due to the shift in Easter holiday to April 24 this year from April 4 in the prior year.

Merchandise sales for the period inched down 1.3% to $519.8 million compared with an increase of 7.5% in sales for the five-week period ended April 03, 2010. The sales trend was slightly below average in the Eastern and Western regions while Central region sales remained consistent with the trend. Category wise, sales in the home and furniture category and the juniors' and children's apparel category were substantially below trend for the five-week period ended April 02, 2011.

Dillard's posted earnings of $1.55 a share for fourth-quarter 2010 surprisingly outpacing the Zacks Consensus Estimate of $1.25 and also the prior-year quarter's earnings of $1.04 a share. The increase was primarily attributable to strong top-line growth and good inventory management.

The company's net sales went up 5.5% to $1,934.3 million, which was well above the Zacks Consensus Estimate of $1,914.0 million. Moreover, comparable store sales grew 7% to $1,912.0 million compared with $1,794.0 million in the year-ago quarter.

Kohl's Corporation (KSS), which competes with Dillard's, reported decline in March stores sales of 6.5%, with total sales plummeting 4.9%. Another peer, J.C. Penney Company Inc. (JCP) also reported a decline of 0.3% in same-store-sales with total sales falling 4.0% in March, 2011.However, same store sales of another competitor Macy's Inc. (M) reported an increase of 0.9% in same-store-sales for March while total sales inched up 1.6%.

Based in Little Rock, Arkansas, Dillard's Inc. is a large departmental store chain in the United States featuring fashion apparel and home furnishings. The company currently operates 306 stores and 9 clearance centers across 29 states, all under the Dillard's brand name. Dillard's Inc.'s stores are mainly located in the Southwest, Southeast and Midwest regions in the US. The company's primary product categories include: women's and junior's apparel; shoes; accessories and lingerie; men's clothing and accessories; cosmetics; home; and children's clothing. Its merchandise mix consists of both branded and private-label items.

Dillard's shares maintain a Zacks #1 Rank, which translates into a short-term 'Strong Buy' rating. Our long-term recommendation on the stock remains 'Outperform'.

 
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