Dillard’s, Inc. (NYSE: DDS) (the “Company” or “Dillard’s”)
announced operating results for the 13 weeks ended April 30, 2022.
This release contains certain forward-looking statements. Please
refer to the Company’s cautionary statements included below under
“Forward-Looking Information.”
Chief Executive Officer William T. Dillard, II stated, “Our
customer responded well to our merchandise in the first quarter
producing a 23% increase in same-store sales. From this strong sell
through, we reported a record high retail gross margin of 47.3%
leading to net income of $251 million or $13.68 per share. We ended
the quarter with $862 million in cash after share repurchases
totaling $187 million.”
Highlights of the First Quarter (compared to the prior year
first quarter):
- Comparable retail sales increased 23%
- Net income of $251.1 million compared to net income of
$158.2 million
- Net income of $13.68 per share compared to net income of
$7.25 per share
- Retail gross margin of 47.3% of sales compared to 42.6% of
sales
- Operating expenses were $400.8 million (24.9% of sales)
compared to $336.6 million (25.3% of sales)
- Cash flow provided by operations of $365.2 million compared
to $302.4 million
- Share repurchase of $186.5 million (approximately 735,000
shares)
- Ending cash of $862.2 million compared to $615.9
million
First Quarter Results
Dillard’s reported net income for the 13 weeks ended April 30,
2022 of $251.1 million, or $13.68 per share, compared to net income
of $158.2 million, or $7.25 per share, for the 13 weeks ended May
1, 2021. Included in net income for the 13 weeks ended April 30,
2022 is a pretax gain of $7.2 million ($5.6 million after tax or
$0.31 per share) primarily related to the sale of a store property.
Included in net income for the prior year first quarter is a pretax
gain of $24.6 million ($19.2 million after tax or $0.88 per share)
primarily related to the sale of three store properties.
Sales
Net sales for the 13 weeks ended April 30, 2022 and the 13 weeks
ended May 1, 2021 were $1.612 billion and $1.329 billion,
respectively. Net sales includes the operations of the Company’s
construction business, CDI Contractors, LLC (“CDI”).
Total retail sales (which excludes CDI) for the 13-week period
ended April 30, 2022 and the 13-week period ended May 1, 2021 were
$1.581 billion and $1.297 billion, respectively. Total retail sales
increased 22% for the 13-week period ended April 30, 2022. Sales in
comparable stores for the period increased 23%. Stronger performing
categories included men’s apparel and accessories, ladies’ apparel,
and juniors’ and children’s apparel.
Gross Margin / Inventory
Consolidated gross margin for the 13 weeks ended April 30, 2022
improved significantly to 46.5% of sales compared to 41.7% of sales
for the prior year first quarter.
Retail gross margin (which excludes CDI) for the 13 weeks ended
April 30, 2022 improved significantly to 47.3% of sales compared to
42.6% of sales for the prior year first quarter.
Management attributes the substantial improvement in gross
margin to positive customer response to the company’s merchandise
assortment combined with continued inventory management leading to
decreased markdowns in the first quarter of 2022.
Inventory increased 4% at April 30, 2022 compared to May 1, 2021
following a 17% decrease in the prior year first quarter.
Selling, General & Administrative Expenses
Consolidated selling, general and administrative expenses
(“operating expenses”) for the 13 weeks ended April 30, 2022 were
$400.8 million (24.9% of sales) compared to $336.6 million (25.3%
of sales) for the prior year first quarter.
Retail operating expenses improved 60 basis points of sales for
the 13 weeks ended April 30, 2022 compared to the prior year first
quarter. Retail operating expenses were $398.9 million (25.2% of
sales) compared to $335.1 million (25.8% of sales). The dollar
increase in operating expenses is primarily due to increased
payroll and payroll-related expenses in the current nationwide
highly competitive wage environment. The Company remains focused on
hiring, developing and retaining talented associates.
Share Repurchase
During the 13 weeks ended April 30, 2022, the Company purchased
$186.5 million (735,117 shares) of Class A Common Stock at an
average price of $253.72 per share under its share repurchase
programs. As of April 30, 2022, authorization of $425.5 million
remained under the February 2022 program.
Total shares outstanding (Class A and Class B Common Stock) at
April 30, 2022 and May 1, 2021 were 18.1 million and 21.4 million,
respectively.
Store Information
Dillard’s opened a new 160,000 square foot location at
University Place in Orem, Utah during the first quarter. This new
location will replace Provo Towne Centre in the same market
(200,000 square feet) which is expected to close later this month.
The Company will replace a leased building at Westgate Mall in
Amarillo, Texas with a newly remodeled owned facility in the fall
of 2022. During the first quarter, the Company closed a clearance
center located at University Mall in Tampa, Florida (80,000 square
feet).
The Company operates 251 Dillard’s locations and 29 clearance
centers spanning 29 states and an Internet store at dillards.com. Total square footage at April 30,
2022 was 47.7 million square feet.
Dillard’s, Inc. and
Subsidiaries
Condensed Consolidated Statements
of Income (Unaudited)
(In Millions, Except Per Share
Data)
13 Weeks Ended
April 30, 2022
May 1, 2021
% of
% of
Net
Net
Amount
Sales
Amount
Sales
Net sales
$
1,611.7
100.0
%
$
1,328.5
100.0
%
Service charges and other income
31.1
1.9
29.0
2.2
1,642.8
101.9
1,357.5
102.2
Cost of sales
861.4
53.5
774.1
58.3
Selling, general and administrative
expenses
400.8
24.9
336.6
25.3
Depreciation and amortization
46.2
2.9
46.4
3.5
Rentals
5.1
0.3
5.1
0.4
Interest and debt expense, net
10.6
0.7
11.5
0.9
Other expense
1.9
0.1
5.0
0.4
Gain on disposal of assets
7.2
0.4
24.6
1.9
Income before income taxes
324.0
20.1
203.4
15.3
Income taxes
72.9
45.2
Net income
$
251.1
15.6
%
$
158.2
11.9
%
Basic and diluted earnings per share
$
13.68
$
7.25
Basic and diluted weighted average
shares
18.4
21.8
Dillard’s, Inc. and
Subsidiaries
Condensed Consolidated Balance
Sheets (Unaudited)
(In Millions)
April 30,
May 1,
2022
2021
Assets
Current Assets:
Cash and cash equivalents
$
862.2
$
615.9
Accounts receivable
30.9
33.9
Merchandise inventories
1,365.0
1,306.5
Federal and state income taxes
—
73.5
Other current assets
96.2
79.0
Total current assets
2,354.3
2,108.8
Property and equipment, net
1,170.3
1,257.3
Operating lease assets
39.7
47.7
Deferred income taxes
29.1
24.8
Other assets
65.4
69.1
Total Assets
$
3,658.8
$
3,507.7
Liabilities and Stockholders’ Equity
Current Liabilities:
Trade accounts payable and accrued
expenses
$
1,163.3
$
1,075.6
Current portion of long-term debt and
finance lease liabilities
44.8
0.5
Current portion of operating lease
liabilities
11.3
13.0
Federal and state income taxes
99.3
—
Total current liabilities
1,318.7
1,089.1
Long-term debt
321.3
365.9
Operating lease liabilities
28.5
34.5
Other liabilities
278.0
280.5
Subordinated debentures
200.0
200.0
Stockholders’ equity
1,512.3
1,537.7
Total Liabilities and Stockholders’
Equity
$
3,658.8
$
3,507.7
Dillard’s, Inc. and
Subsidiaries
Condensed Consolidated Statements
of Cash Flows (Unaudited)
(In Millions)
13 Weeks Ended
April 30,
May 1,
2022
2021
Operating activities:
Net income
$
251.1
$
158.2
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization of property
and other deferred cost
46.6
47.2
Gain on disposal of assets
(7.2
)
(24.6
)
Proceeds from insurance
—
1.8
Loss on extinguishment of debt
—
2.8
Changes in operating assets and
liabilities:
Decrease in accounts receivable
8.9
2.8
Increase in merchandise inventories
(284.8
)
(218.7
)
Increase in other current assets
(18.5
)
(23.1
)
Increase in other assets
(0.4
)
(0.5
)
Increase in trade accounts payable and
accrued expenses and other liabilities
293.5
311.4
Increase in income taxes
76.0
45.1
Net cash provided by operating
activities
365.2
302.4
Investing activities:
Purchase of property and equipment and
capitalized software
(27.3
)
(16.9
)
Proceeds from disposal of assets
8.1
29.3
Proceeds from insurance
4.4
1.8
Net cash (used in) provided by investing
activities
(14.8
)
14.2
Financing activities:
Principal payments on long-term debt and
finance lease liabilities
—
(0.2
)
Cash dividends paid
(3.9
)
(3.3
)
Purchase of treasury stock
(201.1
)
(54.8
)
Issuance cost of line of credit
—
(2.7
)
Net cash used in financing activities
(205.0
)
(61.0
)
Increase in cash and cash equivalents
145.4
255.6
Cash and cash equivalents, beginning of
period
716.8
360.3
Cash and cash equivalents, end of
period
$
862.2
$
615.9
Non-cash transactions:
Accrued capital expenditures
$
6.7
$
8.8
Accrued purchase of treasury stock
1.6
4.0
Lease assets obtained in exchange for new
operating lease liabilities
—
3.8
Estimates for 2022
The Company is providing the following estimates for certain
financial statement items for the fiscal year ending January 28,
2023 based upon current conditions. Actual results may differ
significantly from these estimates as conditions and factors change
- See “Forward-Looking Information.”
In Millions
2022
2021
Estimated
Actual
Depreciation and amortization
$
190
$
199
Rentals
23
23
Interest and debt expense, net
42
43
Capital expenditures
150
104
Forward-Looking Information
This report contains certain forward-looking statements. The
following are or may constitute forward looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995: (a) statements including words such as “may,” “will,”
“could,” “should,” “believe,” “expect,” “future,” “potential,”
“anticipate,” “intend,” “plan,” “estimate,” “continue,” or the
negative or other variations thereof; (b) statements regarding
matters that are not historical facts; and (c) statements about the
Company’s future occurrences, plans and objectives, including
statements regarding management’s expectations and forecasts for
the remainder of fiscal 2022 and beyond, statements concerning the
opening of new stores or the closing of existing stores, statements
concerning capital expenditures and sources of liquidity and
statements concerning estimated taxes. 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) the COVID-19 pandemic and its effects on public health,
our supply chain, the health and well-being of our employees and
customers, and the retail industry in general; other general retail
industry conditions and macro-economic conditions including
inflation and changes in traffic at malls and shopping centers;
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 and interest rates on 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 the Company’s ability to meet labor
needs amid nationwide labor shortages and an intense competition
for talent, changes in consumer spending patterns, debt levels and
their ability to meet credit obligations; high levels of
unemployment; changes in tax legislation; 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; the elimination of LIBOR;
potential disruption from terrorist activity and the effect on
ongoing consumer confidence; other epidemic, pandemic or public
health issues; potential disruption of international trade and
supply chain efficiencies; any government-ordered restrictions on
the movement of the general public or the mandated or voluntary
closing of retail stores in response to the COVID-19 pandemic;
global conflicts (including the recent conflict in Ukraine) 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
January 29, 2022, contain other information on factors that may
affect financial results or cause actual results to differ
materially from forward-looking statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20220512005314/en/
Dillard’s, Inc. Julie J. Guymon 501-376-5965
julie.guymon@dillards.com
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