Bull of the Day: Dillard's

by Zacks Equity Research

January 08, 2013 |
DDS

Driven by strong same-store sales performance along with improved margins, Dillard's (DDS) third-quarter 2012 earnings of $0.96 per share surged two-folds from the prior-year quarter, and outpaced the Zacks Consensus Estimate of $0.75. Moreover, total revenue grew 4.8% year over year to $1,450.0 million and beat the Zacks Consensus Estimate of 1,442.0 million.

Management is undertaking restructuring initiatives and inventory reduction efforts to reduce costs while boosting its profitability. We believe Dillard's healthy balance sheet and adequate cash flows allow it to make shareholder-friendly moves, such as acquisitions, dividends and share repurchases.

Moreover, we believe Dillard's wholly-owned Captive Insurance Company and REIT facilitate efficient risk management as well as boost its liquidity position. Currently, we maintain a long-term Outperform recommendation on the stock.

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