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Why Is Dillard's (DDS) Up 15% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Dillard's, Inc. (DDS - Free Report) . Shares have added about 15% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Dillard's Tops Q1 Earnings, Results Fall Y/Y
Dillard's released first-quarter fiscal 2017 results, wherein the company posted earnings of $2.12 per share, which came ahead of the Zacks Consensus Estimate of $1.98, while it fell nearly 2.3% from $2.17 in the year-ago quarter primarily due to soft sales.
Dillard's total revenue (including service charges and other income) of $1,452.9 million dropped 5.6% from the year-ago quarter and surpassed the Zacks Consensus Estimate of $1,450 million.
Dillard's net sales (including CDI Contractors LLC or CDI) declined 5.7% year over year to $1,418.1 million in the reported quarter. Merchandise sales, excluding CDI, fell 4.3% to roughly $1,386 million. Merchandise comparable-store sales for the 13-week period ended Apr 29, 2017 were down 4% from the year-ago period.
While ladies’ apparel category displayed strongest performance in the quarter, followed by juniors and children’s apparel category – Dillard’s performance remained soft across cosmetics, home and furniture, and ladies’ accessories and lingerie. The best performing region was Western, trailed by the Eastern and Central regions, respectively.
Consolidated gross margin expanded 108 basis points (bps), while gross margin from retail operations (excluding CDI) rose 65 bps.
Dillard's selling, general and administrative (SG&A) expenses (as a percentage of sales) escalated 160 bps to 28.1%. In dollar terms, SG&A expenses remained nearly flat at $398.5 million.
Financial Details
Dillard’s ended the quarter with cash and cash equivalents of $301.5 million, long-term debt and capital leases (excluding current portions) of $529.9 million and total shareholders’ equity of $1,690.4 million. Inventory improved 4% year over year to $1,713.9 million.
During the quarter, the company generated net cash flow from operations of $77.4 million and incurred $93 million on dividends and share buybacks. It bought back 1.7 million shares for $91.1 million in the fiscal first quarter. With this, the company has authorization worth $162.7 million remaining as of Apr 29, 2017, under its $500 million share repurchase plan announced in Feb 2016.
Store Update
During the quarter, Dillard’s opened its new 180,000 square feet replacement store in Nashville, Tennessee. Also, it purchased 2 stores – including a former Macy’s, Inc. (M) store in Utah, and a store in Texas. Both these stores are anticipated to open in fall 2017.
As of Apr 29, 2017, Dillard’s had about 268 namesake outlets and 25 clearance centers operating in 29 states, as well as an online store at www.dillards.com. Dillard’s total square footage, as of the end of fiscal 2016, was 49.2 million.
Fiscal 2017 Outlook
For fiscal 2017, Dillard’s now expects rentals of approximately $28 million, compared with $25 million projected earlier. In fiscal 2016, the company’s rentals amounted to $26 million.
Management retained its other forecasts. Net interest and debt expenses are anticipated to be nearly $63 million, flat with fiscal 2016 level. Further, the company projects capital expenditures of about $125 million for fiscal 2017 compared with $105 million in fiscal 2016. Depreciation and amortization expenses for fiscal 2017 are expected at $240 million compared with $244 million in the prior year.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, Dillard's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with a 'F'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is Dillard's (DDS) Up 15% Since the Last Earnings Report?
It has been about a month since the last earnings report for Dillard's, Inc. (DDS - Free Report) . Shares have added about 15% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Dillard's Tops Q1 Earnings, Results Fall Y/Y
Dillard's released first-quarter fiscal 2017 results, wherein the company posted earnings of $2.12 per share, which came ahead of the Zacks Consensus Estimate of $1.98, while it fell nearly 2.3% from $2.17 in the year-ago quarter primarily due to soft sales.
Dillard's total revenue (including service charges and other income) of $1,452.9 million dropped 5.6% from the year-ago quarter and surpassed the Zacks Consensus Estimate of $1,450 million.
Dillard's net sales (including CDI Contractors LLC or CDI) declined 5.7% year over year to $1,418.1 million in the reported quarter. Merchandise sales, excluding CDI, fell 4.3% to roughly $1,386 million. Merchandise comparable-store sales for the 13-week period ended Apr 29, 2017 were down 4% from the year-ago period.
While ladies’ apparel category displayed strongest performance in the quarter, followed by juniors and children’s apparel category – Dillard’s performance remained soft across cosmetics, home and furniture, and ladies’ accessories and lingerie. The best performing region was Western, trailed by the Eastern and Central regions, respectively.
Consolidated gross margin expanded 108 basis points (bps), while gross margin from retail operations (excluding CDI) rose 65 bps.
Dillard's selling, general and administrative (SG&A) expenses (as a percentage of sales) escalated 160 bps to 28.1%. In dollar terms, SG&A expenses remained nearly flat at $398.5 million.
Financial Details
Dillard’s ended the quarter with cash and cash equivalents of $301.5 million, long-term debt and capital leases (excluding current portions) of $529.9 million and total shareholders’ equity of $1,690.4 million. Inventory improved 4% year over year to $1,713.9 million.
During the quarter, the company generated net cash flow from operations of $77.4 million and incurred $93 million on dividends and share buybacks. It bought back 1.7 million shares for $91.1 million in the fiscal first quarter. With this, the company has authorization worth $162.7 million remaining as of Apr 29, 2017, under its $500 million share repurchase plan announced in Feb 2016.
Store Update
During the quarter, Dillard’s opened its new 180,000 square feet replacement store in Nashville, Tennessee. Also, it purchased 2 stores – including a former Macy’s, Inc. (M) store in Utah, and a store in Texas. Both these stores are anticipated to open in fall 2017.
As of Apr 29, 2017, Dillard’s had about 268 namesake outlets and 25 clearance centers operating in 29 states, as well as an online store at www.dillards.com. Dillard’s total square footage, as of the end of fiscal 2016, was 49.2 million.
Fiscal 2017 Outlook
For fiscal 2017, Dillard’s now expects rentals of approximately $28 million, compared with $25 million projected earlier. In fiscal 2016, the company’s rentals amounted to $26 million.
Management retained its other forecasts. Net interest and debt expenses are anticipated to be nearly $63 million, flat with fiscal 2016 level. Further, the company projects capital expenditures of about $125 million for fiscal 2017 compared with $105 million in fiscal 2016. Depreciation and amortization expenses for fiscal 2017 are expected at $240 million compared with $244 million in the prior year.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Dillard's, Inc. Price and Consensus
Dillard's, Inc. Price and Consensus | Dillard's, Inc. Quote
VGM Scores
At this time, Dillard's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with a 'F'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.