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Dillard's (DDS) Moves 18.1% Higher: Will This Strength Last?
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Dillard's (DDS - Free Report) shares ended the last trading session 18.1% higher at $161.57. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 33.6% gain over the past four weeks.
Dillard’s stock rally is an extension of its continued inventory management and cost reduction endeavors that have been impressing investors. Dillard’s 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. These aggressive measures to lower excess inventory owing to the pandemic-led decline in demand have been resulting in lower markdowns, thus, boosting margins. As of the end of first-quarter fiscal 2021, Dillard’s inventory declined about 17% year over year.
Furthermore, Dillard’s has taken several steps to reduce costs, including extension of vendor payment terms, reduction of discretionary and capital expenditures, and payroll reduction. These actions have led to significant SG&A expense leverage, aiding the bottom line.
Price and Consensus
This department store operator is expected to post quarterly earnings of $1.60 per share in its upcoming report, which represents a year-over-year change of +532.4%. Revenues are expected to be $1.29 billion, up 40.6% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Dillard's, the consensus EPS estimate for the quarter has been revised 282.3% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on DDS going forward to see if this recent jump can turn into more strength down the road.
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Dillard's (DDS) Moves 18.1% Higher: Will This Strength Last?
Dillard's (DDS - Free Report) shares ended the last trading session 18.1% higher at $161.57. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 33.6% gain over the past four weeks.
Dillard’s stock rally is an extension of its continued inventory management and cost reduction endeavors that have been impressing investors. Dillard’s 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. These aggressive measures to lower excess inventory owing to the pandemic-led decline in demand have been resulting in lower markdowns, thus, boosting margins. As of the end of first-quarter fiscal 2021, Dillard’s inventory declined about 17% year over year.
Furthermore, Dillard’s has taken several steps to reduce costs, including extension of vendor payment terms, reduction of discretionary and capital expenditures, and payroll reduction. These actions have led to significant SG&A expense leverage, aiding the bottom line.
Price and Consensus
This department store operator is expected to post quarterly earnings of $1.60 per share in its upcoming report, which represents a year-over-year change of +532.4%. Revenues are expected to be $1.29 billion, up 40.6% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Dillard's, the consensus EPS estimate for the quarter has been revised 282.3% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on DDS going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>