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Here's How Dillard's (DDS) is Placed Ahead of Q4 Earnings
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Dillard’s, Inc. (DDS - Free Report) is expected to register year-over-year declines in the top and bottom lines when it reports fourth-quarter fiscal 2020 numbers. The company has been witnessing soft sales trends on the back of reduced retail traffic and store timings in the past few months due to the COVID-19 pandemic. The Zacks Consensus Estimate for revenues of $1.59 billion indicates a 19.2% decline from the year-ago reported figure.
The Zacks Consensus Estimate for fiscal fourth-quarter earnings is pegged at $2.73 per share, indicating a decline of 0.7% from the year-ago quarter’s reported number. However, the consensus estimate has moved up 5.4% in the past seven days.
We note that in the trailing four quarters, the company’s bottom line outperformed the Zacks Consensus Estimate by 1.5%, on average.
Despite the reopening of stores, Dillard’s fourth-quarter sales are expected to reflect continued losses from soft retail traffic trends as well as reduced store operating hours due to the pandemic. Additionally, higher pandemic-related costs are anticipated to have weighed on the bottom line in the fiscal fourth quarter.
Nonetheless, the company has been benefiting from initiatives to control inventory and expenses through the uncertain pandemic-led environment. These have contributed to bottom-line gains in the past two quarters. Notably, it has been keen on inventory management since the start of the pandemic through measures like cancellation, suspension and delaying of shipments as well as merchandise purchase reduction.
The aggressive measures to lower excess inventory, owing to the pandemic-led decline in demand, have proved beneficial for the company’s margins. The reduced total merchandise purchases have led to a decline in overall inventory levels in the past two quarters. The reasonable ending inventory bodes well for the fiscal fourth quarter.
Citing the business disruptions due to the pandemic, Dillard’s has taken several steps to reduce costs, starting from first-quarter fiscal 2020, which has resulted in reduced operating expenses. Some of these are the extension of vendor payment terms, reduction of discretionary and capital expenditure, and payroll layoffs. Gains from the efforts are likely to have led to operating expense leverage in the fiscal fourth quarter.
What the Zacks Model Suggests
Our proven model does not conclusively predict an earnings beat for Dillard’s this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Dillard’s currently carries a Zacks Rank #2 and has an Earnings ESP of -2.84%.
3 Stocks With Favorable Combination
Here are three companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat in the upcoming releases:
Macy’s, Inc. (M - Free Report) presently has an Earnings ESP of +48.08% and a Zacks Rank #2.
L Brands, Inc. (LB - Free Report) currently has an Earnings ESP of +6.31% and a Zacks Rank #3.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Here's How Dillard's (DDS) is Placed Ahead of Q4 Earnings
Dillard’s, Inc. (DDS - Free Report) is expected to register year-over-year declines in the top and bottom lines when it reports fourth-quarter fiscal 2020 numbers. The company has been witnessing soft sales trends on the back of reduced retail traffic and store timings in the past few months due to the COVID-19 pandemic. The Zacks Consensus Estimate for revenues of $1.59 billion indicates a 19.2% decline from the year-ago reported figure.
The Zacks Consensus Estimate for fiscal fourth-quarter earnings is pegged at $2.73 per share, indicating a decline of 0.7% from the year-ago quarter’s reported number. However, the consensus estimate has moved up 5.4% in the past seven days.
We note that in the trailing four quarters, the company’s bottom line outperformed the Zacks Consensus Estimate by 1.5%, on average.
Dillards, Inc. Price and EPS Surprise
Dillards, Inc. price-eps-surprise | Dillards, Inc. Quote
Key Factors to Note
Despite the reopening of stores, Dillard’s fourth-quarter sales are expected to reflect continued losses from soft retail traffic trends as well as reduced store operating hours due to the pandemic. Additionally, higher pandemic-related costs are anticipated to have weighed on the bottom line in the fiscal fourth quarter.
Nonetheless, the company has been benefiting from initiatives to control inventory and expenses through the uncertain pandemic-led environment. These have contributed to bottom-line gains in the past two quarters. Notably, it has been keen on inventory management since the start of the pandemic through measures like cancellation, suspension and delaying of shipments as well as merchandise purchase reduction.
The aggressive measures to lower excess inventory, owing to the pandemic-led decline in demand, have proved beneficial for the company’s margins. The reduced total merchandise purchases have led to a decline in overall inventory levels in the past two quarters. The reasonable ending inventory bodes well for the fiscal fourth quarter.
Citing the business disruptions due to the pandemic, Dillard’s has taken several steps to reduce costs, starting from first-quarter fiscal 2020, which has resulted in reduced operating expenses. Some of these are the extension of vendor payment terms, reduction of discretionary and capital expenditure, and payroll layoffs. Gains from the efforts are likely to have led to operating expense leverage in the fiscal fourth quarter.
What the Zacks Model Suggests
Our proven model does not conclusively predict an earnings beat for Dillard’s this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Dillard’s currently carries a Zacks Rank #2 and has an Earnings ESP of -2.84%.
3 Stocks With Favorable Combination
Here are three companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat in the upcoming releases:
Abercrombie & Fitch Company (ANF - Free Report) has an Earnings ESP of +9.17% and it currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Macy’s, Inc. (M - Free Report) presently has an Earnings ESP of +48.08% and a Zacks Rank #2.
L Brands, Inc. (LB - Free Report) currently has an Earnings ESP of +6.31% and a Zacks Rank #3.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>