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Bear of the Day

 

It has been a very challenging environment for mall based retailers due to declining traffic, rising trend for online shopping and increasing competition from off-price fashion chains. Of late, concerns regarding the impact of border adjustment tax on retailers are also making investors nervous.

Founded in 1938, Dillard's Inc (DDS - Free Report) is a large departmental store chain featuring fashion apparel, cosmetics and home furnishings. The company went public in 1969 and it currently operated about 300 stores across 29 states. Their merchandise includes both national and exclusive brands.

Disappointing Results

The retailer reported disappointing results for Q4, with both sales and earnings missing estimates and also declining year over year.

Adjusted earnings of $1.85 per share were significantly below the Zacks Consensus Estimate of $2.34 and down about 17.8% year-over-year.

“Our operating results reflect another quarter of mall traffic declines from continued retail industry challenges,” said the CEO.

Falling Estimates

Analysts have been cutting their estimates for the company after quarterly results. Zacks Consensus Estimates for the current and the next fiscal year are now $4.36 per share and $4.17 per share respectively, down from $5.00 per share and $4.77 per share respectively, before the results. Declining estimates sent the stock back to Zacks Rank # 5 last week.

The company has missed Zacks Consensus Estimates in three out of the last four quarters, with an average quarterly surprise of 5.4%.

 The Bottom Line

Declining store traffic and rising trend towards online shopping to present challenges for retailers. The Zacks industry rank for Retail-Regional Department Stores is currently 251 out of 265 (Bottom 5%).

There is no Zacks Rank #1 or #2 stock in this industry as of now.

More Stocks to Sell. Now.

Beyond our Bear Stock of the Day, today's list of 220 Zacks Rank #5 Strong Sells demand even more urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. Many appear to be sound investments but, since 1988, such stocks have actually performed more than 11X worse than the S&P 500. 

See today's Zacks ""Strong Sells"" absolutely free >>.


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