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Here's How Dillard's (DDS) is Placed Just Ahead of Q2 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 second-quarter fiscal 2022 numbers. Higher SG&A expenses and supply-chain costs are likely to have dented its performance despite efforts to manage inventory levels and reduce operating expenses.

The Zacks Consensus Estimate for fiscal second-quarter revenues of $1.55 billion indicates a 1% decline from the year-ago reported figure.

The Zacks Consensus Estimate for fiscal second-quarter earnings is pegged at $2.88 per share, indicating a 67.3% decline from the year-ago quarter’s reported figure. The consensus estimate has been unchanged in the past 30 days.

We note that in the trailing four quarters, the company’s bottom line beat the Zacks Consensus Estimate by 224.1%, on average.

Dillard's, Inc. Price and EPS Surprise

 

Dillard's, Inc. Price and EPS Surprise

Dillard's, Inc. price-eps-surprise | Dillard's, Inc. Quote

Key Factors to Note

Dillard’s has been benefiting from continued momentum in consumer demand and better inventory levels. It has recently been witnessing robust demand for men’s apparel and accessories, ladies, and children’s apparel categories.

The company’s initiatives to control inventory and expenses have been contributing to bottom-line gains for the past few quarters. Improved consumer demand and better inventory management have been leading to lower markdowns, which have been boosting the gross margin. The trends are expected to have continued in the fiscal second quarter.

However, stiff competition and raw material price inflation are likely to have been concerning. Also, the company has been witnessing elevated SG&A expenses for the past few quarters, which have been denting the bottom line to some extent. The persistence of the trend is anticipated to have affected the company’s profitability in the to-be-reported 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 has a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%.

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 their upcoming releases:

Ulta Beauty (ULTA - Free Report) currently has an Earnings ESP of +3.27% and a Zacks Rank of 2. The company is likely to register top and bottom-line growth when it reports second-quarter fiscal 2022 results. The consensus mark for ULTA’s quarterly revenues is pegged at $2.2 billion, which suggests a rise of 11.7% from the figure reported in the prior-year quarter.

You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Ulta Beauty’s earnings has moved up by 1.3% to $4.84 per share in the past 30 days. The consensus estimate indicates 6.1% growth from $4.56 reported in the year-ago quarter.

Dollar General (DG - Free Report) currently has an Earnings ESP of +0.99% and a Zacks Rank of 2. The company is likely to register increases in the top and bottom lines when it reports second-quarter fiscal 2022 numbers. The consensus mark for DG’s quarterly earnings has moved up by a penny in the past seven days to $2.92 per share. The consensus estimate suggests 8.6% growth from the year-ago quarter’s reported number.

The Zacks Consensus Estimate for Dollar General’s quarterly revenues is pegged at $9.4 billion, which suggests growth of 8.4% from the figure reported in the prior-year quarter.

Williams-Sonoma (WSM - Free Report) currently has an Earnings ESP of +2.23% and a Zacks Rank of 3. The company is likely to register top and bottom-line growth when it reports second-quarter fiscal 2022 results. The consensus mark for WSM’s quarterly revenues is pegged at $2.03 billion, which suggests 4.1% growth from the figure reported in the prior-year quarter.

The consensus mark for WSM’s quarterly earnings has moved down 1.1% in the past 30 days to $3.47 per share. The consensus estimate suggests growth of 7.1% from the year-ago quarter.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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