Dillard’s, Inc. (NYSE: DDS) (the “Company” or “Dillard’s”)
announced operating results for the 14 and 53 weeks ended February
3, 2024. The Company follows the 4-5-4 retail reporting calendar,
which included an extra week in the fourth quarter of fiscal year
2023. Comparisons are made based on the 13 and 52 weeks ended
January 27, 2024 and January 28, 2023 where appropriate and noted.
This release contains certain forward-looking statements. Please
refer to the Company’s cautionary statements included below under
“Forward-Looking Information.”
Dillard’s Chief Executive Officer William T. Dillard, II
stated, “Our fourth quarter results were respectable considering
the continued weak consumer environment. We were pleased to pay a
special dividend of $20.00 per share in January – bringing total
shareholder return for the year to $621 million. We ended the year
with $956 million in cash and short-term investments.”
Highlights of the Fourth Quarter (compared to the prior year
fourth quarter):
- Total retail sales decreased 5% for the 13-week to 13-week
period
- Comparable store sales decreased 5% for the 13-week to
13-week period
- Net income of $250.5 million compared to $289.2
million
- Earnings per share of $15.44 compared to $16.89
- Retail gross margin of 37.7% of sales compared to 38.7% of
sales
- Operating expenses were $476.7 million (22.4% of sales)
compared to $458.4 million (21.6% of sales)
- Share repurchase of $16.2 million (approximately 52,000
shares)
- Ending inventory decreased 2% year over year
Fourth Quarter Results
Dillard’s reported net income for the 14 weeks ended February 3,
2024 of $250.5 million, or $15.44 per share, compared to $289.2
million, or $16.89 per share, for the 13 weeks ended January 28,
2023. Included in net income for the 14 weeks ended February 3,
2024 are two tax-related benefits:
- a federal income tax benefit of $21.1 million ($1.30 per share)
due to a deduction related to that portion of the special dividend
of $20.00 per share that was paid to the Dillard's, Inc. Investment
and Employee Stock Ownership Plan during the quarter
- a net $7.3 million ($0.45 per share) income tax benefit due to
the release of valuation allowances primarily related to state net
operating loss carryforwards
Included in net income for the 13 weeks ended January 28, 2023
is a pretax gain of $13.8 million ($10.8 million after tax or $0.63
per share) primarily related to the sale of two store properties.
Also included in net income for the 13 weeks ended January 28, 2023
are two tax-related benefits:
- a federal income tax benefit of $16.3 million ($0.95 per share)
due to a deduction related to that portion of the special dividend
of $15.00 per share that was paid to the Dillard's, Inc. Investment
and Employee Stock Ownership Plan during the quarter
- a net $13.7 million ($0.80 per share) income tax benefit due to
the release of valuation allowances primarily related to state net
operating loss carryforwards
Sales – Fourth Quarter
Net sales for the 14 weeks ended February 3, 2024 and 13 weeks
ended January 28, 2023 were $2.124 billion and $2.127 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 14 weeks ended
February 3, 2024 and 13 weeks ended January 28, 2023 were $2.057
billion and $2.069 billion, respectively. Total retail sales
decreased 5% for the 13-week period ended January 27, 2024 compared
to the 13-week period ended January 28, 2023. Sales in comparable
stores for that same period decreased 5%. The Company noted a
continued challenging sales environment during the fourth quarter.
Cosmetics was the strongest performing category followed by home
and furniture. Juniors’ and children’s apparel was the weakest
category followed by ladies’ accessories and lingerie and ladies’
apparel.
Gross Margin – Fourth Quarter
Consolidated gross margin for the 14 weeks ended February 3,
2024 was 36.6% of sales compared to 37.7% of sales for the 13 weeks
ended January 28, 2023.
Retail gross margin (which excludes CDI) for the 14 weeks ended
February 3, 2024 was 37.7% of sales compared to 38.7% of sales for
the 13 weeks ended January 28, 2023. Gross margin increased
moderately in home and furniture and was essentially flat in
cosmetics, ladies’ accessories and lingerie and ladies’ apparel.
Gross margin decreased slightly in shoes and decreased moderately
in juniors’ and children’s apparel and men’s apparel and
accessories.
Inventory decreased 2% at February 3, 2024 compared to January
28, 2023.
Selling, General & Administrative Expenses – Fourth
Quarter
Consolidated selling, general and administrative expenses
(“operating expenses”) for the 14 weeks ended February 3, 2024 were
$476.7 million (22.4% of sales) compared to $458.4 million (21.6%
of sales) for the 13 weeks ended January 28, 2023. The increase in
operating expenses of $18.3 million is primarily due to the
additional week of operations in the fourth quarter of fiscal year
2023.
Highlights of the Fiscal Year (compared to the prior fiscal
year):
- Total retail sales decreased 5% for the 52-week to 52-week
period
- Comparable store sales decreased 4% for the 52-week to
52-week period
- Net income of $738.8 million compared to $891.6
million
- Earnings per share of $44.73 compared to $50.81
- Retail gross margin of 41.8% of sales compared to 43.0% of
sales
- Operating expenses were $1,717.4 million (25.4% of sales)
compared to $1,674.3 million (24.4% of sales)
- Share repurchase of $281.4 million (approximately 917,700
shares)
Fiscal Year Results
Dillard’s reported net income for the 53 weeks ended February 3,
2024 of $738.8 million, or $44.73 per share. This compares to
$891.6 million, or $50.81 per share, for the prior year 52-week
period. Included in net income for the 53 weeks ended February 3,
2024 is a pretax gain of $6.1 million ($4.7 million after tax or
$0.28 per share) primarily related to the sale of two store
properties. Also Included in net income for the 53 weeks ended
February 3, 2024 are two tax-related benefits:
- a federal income tax benefit of $21.1 million ($1.28 per share)
due to a deduction related to that portion of the special dividend
of $20.00 per share that was paid to the Dillard's, Inc. Investment
and Employee Stock Ownership Plan during the year
- a net $9.8 million ($0.59 per share) income tax benefit due to
the release of valuation allowances primarily related to state net
operating loss carryforwards
Included in net income for the 52 weeks ended January 28, 2023
is a pretax gain of $21.0 million ($16.4 million after tax or $0.94
per share) primarily related to the sale of three store properties.
Also included in net income for the 52 weeks ended January 28, 2023
are two tax-related benefits:
- a federal income tax benefit of $16.3 million ($0.93 per share)
due to a deduction related to that portion of the special dividend
of $15.00 per share that was paid to the Dillard's, Inc. Investment
and Employee Stock Ownership Plan during the year
- a net $13.7 million ($0.78 per share) income tax benefit due to
the release of valuation allowances primarily related to state net
operating loss carryforwards
Sales – Fiscal Year
Net sales for the 53 weeks ended February 3, 2024 and 52 weeks
ended January 28, 2023 were $6.752 billion and $6.871 billion,
respectively.
Total retail sales for the 53 weeks ended February 3, 2024 and
52 weeks ended January 28, 2023 were $6.480 billion and $6.702
billion, respectively. Total retail sales decreased 5% for the
52-week period ended January 27, 2024 compared to the 52-week
period ended January 28, 2023. Sales in comparable stores for the
same period decreased 4%.
Gross Margin – Fiscal Year
Consolidated gross margin for the 53 weeks ended February 3,
2024 was 40.3% of sales compared to 42.0% of sales for the prior
year 52-week period. Retail gross margin for the 53 weeks ended
February 3, 2024 was 41.8% of sales compared to 43.0% of sales for
the prior year 52-week period.
Selling, General & Administrative Expenses – Fiscal
Year
Operating expenses for the 53 weeks ended February 3, 2024 were
$1,717.4 million (25.4% of sales) compared to $1,674.3 million
(24.4% of sales) for the prior year 52-week period. The increase in
operating expenses is primarily due to increased payroll and
payroll-related expenses and the additional week of operations in
the 2023 fiscal year.
Share Repurchase
During the 14 weeks ended February 3, 2024, the Company
purchased $16.2 million (approximately 52,000 shares) of Class A
Common Stock at an average price of $310.55 per share.
During the 53 weeks ended February 3, 2024, the Company
purchased $281.4 million (approximately 917,700 shares) at an
average price of $306.66 per share. As of February 3, 2024,
authorization of $394.0 million remained under the May 2023
program.
Total shares outstanding (Class A and Class B Common Stock) at
February 3, 2024 and January 28, 2023 were 16.2 million and 17.1
million, respectively.
Store Information
The Company will open its Empire Mall location in Sioux Falls,
South Dakota in March of 2024 (140,000 square feet) marking its
30th state of operation.
The Company operates 273 Dillard’s stores, including 28
clearance centers, spanning 29 states (totaling 46.7 million square
feet) and an Internet store at dillards.com.
Dillard’s, Inc. and
Subsidiaries
Condensed Consolidated Statements
of Income (Unaudited)
(In Millions, Except Per Share
Data)
14 Weeks Ended
13 Weeks Ended
53 Weeks Ended
52 Weeks Ended
February 3, 2024
January 28, 2023
February 3, 2024
January 28, 2023
% of
% of
% of
% of
Net
Net
Net
Net
Amount
Sales
Amount
Sales
Amount
Sales
Amount
Sales
Net sales
$
2,124.4
100.0
%
$
2,126.7
100.0
%
$
6,752.1
100.0
%
$
6,871.1
100.0
%
Service charges and other income
34.5
1.6
35.8
1.7
122.3
1.8
125.1
1.8
2,158.9
101.6
2,162.5
101.7
6,874.4
101.8
6,996.2
101.8
Cost of sales
1,346.5
63.4
1,325.3
62.3
4,031.1
59.7
3,983.6
58.0
Selling, general and administrative
expenses
476.7
22.4
458.4
21.6
1,717.4
25.4
1,674.3
24.4
Depreciation and amortization
44.3
2.1
47.6
2.2
179.6
2.7
188.5
2.7
Rentals
7.3
0.3
7.5
0.4
21.6
0.3
23.2
0.3
Interest and debt (income) expense,
net
(3.1
)
(0.1
)
3.4
0.2
(4.6
)
(0.1
)
30.5
0.4
Other expense
4.7
0.2
1.9
0.1
18.8
0.3
7.7
0.1
Gain on disposal of assets
—
0.0
13.8
0.6
6.1
0.1
21.0
0.3
Income before income taxes
282.5
13.3
332.2
15.6
916.6
13.6
1,109.4
16.1
Income taxes
32.0
43.0
177.8
217.8
Net income
$
250.5
11.8
%
$
289.2
13.6
%
$
738.8
10.9
%
$
891.6
13.0
%
Basic and diluted earnings per share
$
15.44
$
16.89
$
44.73
$
50.81
Basic and diluted weighted average shares
outstanding
16.2
17.1
16.5
17.5
Dillard’s, Inc. and
Subsidiaries
Condensed Consolidated Balance
Sheets (Unaudited)
(In Millions)
February 3,
January 28,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
808.3
$
650.3
Restricted cash
—
10.0
Accounts receivable
60.6
57.0
Short-term investments
148.0
148.9
Merchandise inventories
1,094.0
1,120.2
Other current assets
97.3
85.5
Total current assets
2,208.2
2,071.9
Property and equipment, net
1,074.3
1,118.4
Operating lease assets
42.7
33.8
Deferred income taxes
63.9
42.3
Other assets
59.8
62.8
Total assets
$
3,448.9
$
3,329.2
Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable and accrued
expenses
$
782.5
$
828.5
Current portion of operating lease
liabilities
11.3
9.7
Federal and state income taxes
34.0
20.8
Total current liabilities
827.8
859.0
Long-term debt
321.4
321.4
Operating lease liabilities
31.7
24.2
Other liabilities
370.9
326.0
Subordinated debentures
200.0
200.0
Stockholders’ equity
1,697.1
1,598.6
Total liabilities and stockholders’
equity
$
3,448.9
$
3,329.2
Dillard’s, Inc. and
Subsidiaries
Condensed Consolidated Statements
of Cash Flows (Unaudited)
(In Millions)
53 Weeks Ended
52 Weeks Ended
February 3,
January 28,
2024
2023
Operating activities:
Net income
$
738.8
$
891.6
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization of property
and other deferred cost
181.2
190.0
Deferred income taxes
(17.7
)
(15.3
)
Gain on disposal of assets
(6.1
)
(21.0
)
Gain from insurance proceeds
—
(0.2
)
Accrued interest on short-term
investments
(5.7
)
(3.2
)
Changes in operating assets and
liabilities:
Increase in accounts receivable
(3.6
)
(17.2
)
Decrease (increase) in merchandise
inventories
26.2
(40.0
)
Increase in other current assets
(7.8
)
(5.4
)
Increase in other assets
(4.6
)
(1.2
)
Decrease in trade accounts payable and
accrued expenses and other liabilities
(22.5
)
(28.6
)
Increase (decrease) in income taxes
5.4
(1.2
)
Net cash provided by operating
activities
883.6
948.3
Investing activities:
Purchase of property and equipment and
capitalized software
(132.9
)
(120.1
)
Proceeds from disposal of assets
6.3
25.1
Proceeds from insurance
4.5
4.9
Purchase of short-term investments
(295.4
)
(245.7
)
Proceeds from maturities of short-term
investments
301.9
100.0
Net cash used in investing activities
(115.6
)
(235.8
)
Financing activities:
Principal payments on long-term debt and
finance lease liabilities
—
(44.8
)
Cash dividends paid
(338.6
)
(271.3
)
Purchase of treasury stock
(281.4
)
(452.9
)
Net cash used in financing activities
(620.0
)
(769.0
)
Increase (decrease) in cash and cash
equivalents and restricted cash
148.0
(56.5
)
Cash and cash equivalents and restricted
cash, beginning of period
660.3
716.8
Cash and cash equivalents and restricted
cash, end of period
$
808.3
$
660.3
Non-cash transactions:
Accrued capital expenditures
$
6.2
$
5.2
Accrued purchase of treasury stock and
excise taxes
2.8
—
Stock awards
4.5
6.2
Lease assets obtained in exchange for new
operating lease liabilities
20.5
3.7
Estimates for 2024
The Company is providing the following
estimates for certain financial statement items for the 52-week
period ending February 1, 2025 based upon current conditions.
Actual results may differ significantly from these estimates as
conditions and factors change - See “Forward-Looking
Information.”
In Millions
2024
2023
Estimated
Actual
Depreciation and amortization
$
185
$
180
Rentals
22
22
Interest and debt (income) expense,
net
(8
)
(5
)
Capital expenditures
125
133
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 52-week period ended February 1, 2025 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) general retail industry
conditions and macro-economic conditions including inflation,
rising interest rates, a potential U.S. Federal government
shutdown, economic recession 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 (including the Inflation
Reduction Act of 2022); changes in legislation and governmental
regulations, affecting such matters as the cost of employee
benefits or credit card income, such as the Consumer Financial
Protection Bureau’s recent proposal to amend Regulation Z to limit
the dollar amounts credit card companies can charge for late fees;
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 SOFR and
other base borrowing rates; potential disruption from terrorist
activity and the effect on ongoing consumer confidence; epidemic,
pandemic or public health issues and their effects on public
health, our supply chain, the health and well-being of our
employees and customers and the retail industry in general;
potential disruption of international trade and supply chain
efficiencies; global conflicts (including the ongoing conflicts in
the Middle East and Ukraine) and the possible impact on consumer
spending patterns and other economic and demographic changes of
similar or dissimilar nature, and other risks and uncertainties,
including those detailed from time to time in our periodic reports
filed with the Securities and Exchange Commission, particularly
those set forth under the caption “Item 1A, Risk Factors” in the
Company’s Annual Report on Form 10-K for the fiscal year ended
January 28, 2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240226549393/en/
Dillard’s, Inc. Julie J. Guymon 501-376-5965
julie.guymon@dillards.com
Dillards (NYSE:DDS)
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