On May 16, 2024, Dillard's Inc (DDS, Financial) released its 8-K filing detailing the financial results for the first quarter ended May 4, 2024. Dillard's Inc is an American fashion apparel, cosmetics, and home furnishings retailer. Its stores offer a large variety of merchandise and feature products from both national and exclusive brand sources. The company also operates a general contracting construction company, CDI Contractors. CDI Contractors' business includes constructing and remodeling stores for Dillard's. The merchandise selections include exclusive brand merchandise such as Antonio Melani, Gianni Bini, Daniel Cremieux, Roundtree & Yorke, and private-label merchandise, among others. The company operates in two business segments; Retail Operations and Construction. The Retail Operations segment generates maximum revenue for the company.
First Quarter Performance Overview
Dillard's Inc reported a net income of $180.0 million, or $11.09 per share, for the 13 weeks ended May 4, 2024, compared to $201.5 million, or $11.85 per share, for the same period last year. The decline in net income is attributed to a challenging consumer environment.
Net sales for the quarter were $1.549 billion, down from $1.584 billion in the prior year. Total retail sales, excluding CDI, decreased by 1% to $1.493 billion. Comparable store sales also saw a decline of 2%.
Financial Achievements and Challenges
Despite the decrease in sales, Dillard's managed to improve its retail gross margin to 46.2% from 45.6% in the previous year. Consolidated gross margin also saw an increase to 44.6% from 43.7%. Inventory levels were down by 2% compared to the previous year, reflecting effective inventory control measures.
Dillard’s Chief Executive Officer William T. Dillard, II stated, “While the consumer environment remained challenging, we focused on profitable sales by offering interesting product combined with inventory control. As a result, our retail gross margin was 46.2% and inventory was down 2%. For the first time in our history, we reported cash and short-term investments exceeding $1 billion.”
Income Statement Highlights
| 13 Weeks Ended | May 4, 2024 | April 29, 2023 |
|---|---|---|
| Net Sales | $1,549.1 million | $1,583.9 million |
| Net Income | $180.0 million | $201.5 million |
| Gross Margin | 44.6% | 43.7% |
| Retail Gross Margin | 46.2% | 45.6% |
| SG&A Expenses | $426.7 million | $406.4 million |
Balance Sheet and Cash Flow
As of May 4, 2024, Dillard's reported cash and cash equivalents of $817.8 million, slightly down from $848.3 million in the previous year. Short-term investments saw a significant increase to $347.2 million from $98.4 million. Total assets stood at $3.937 billion, up from $3.749 billion.
Net cash provided by operating activities was $244.4 million, compared to $280.9 million in the prior year. The company also reported a decrease in merchandise inventories to $1.387.7 million from $1.410.0 million.
Operational Highlights
Dillard's opened a new location at The Empire Mall in Sioux Falls, South Dakota, marking its 30th state of operation. However, the company announced the upcoming closure of its Eastwood Mall Clearance Center in Niles, Ohio.
Analysis
Dillard's Inc faced a challenging consumer environment in the first quarter, leading to a slight decline in sales and net income. However, the company managed to improve its gross margins and maintain strong inventory control. The increase in cash and short-term investments to over $1 billion is a significant milestone, reflecting the company's financial stability.
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Explore the complete 8-K earnings release (here) from Dillard's Inc for further details.
