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Dillard's Inc. (DDS - Free Report) posted impressive fourth-quarter fiscal 2022 results, wherein the bottom and top lines surpassed the Zacks Consensus Estimate. This marked the eighth straight quarter of a top line beat and 10th straight quarter of bottom line beat. Results gained from better inventory management and consumer demand.
Adjusted earnings of $14.50 per share significantly surpassed the Zacks Consensus Estimate of $8.85. However, the bottom line declined 7.5% from the year-ago quarter's $15.68 per share.
Total revenues of $2,127 million increased 0.7% from the prior-year quarter and beat the Zacks Consensus Estimate of $2,111 million. Also, the figure came ahead of our estimate of $2,064.3 million.
Total retail sales (excluding CDI Contractors, LLC) remained almost flat year over year to $2,069 million. Comparable store sales also remained flat year over year. The company witnessed robust sales in cosmetics and ladies’ apparel. On the flip side, home and furniture was the weakest performing category.
The retail gross margin contracted 270 basis points (bps) to 38.7% from the year-ago quarter. On a consolidated basis, the gross margin of 37.7% reflects a 310-bps contraction from 40.8% in the prior-year quarter. This is mainly due to higher markdowns stemming from soft sales at the beginning of the quarter and during the holiday season.
Dillard's consolidated SG&A expenses (as a percentage of sales) expanded 70 bps to 21.6% from the prior-year quarter's 26.5%. In dollar terms, SG&A expenses (operating expenses) grew 4% to $458.4 million.
The retail operating expense rate expanded 90 bps to 22%. In dollar terms, retail operating expenses grew 4% to $456.3 million.
Shares of this Zacks Rank #4 (Sell) have declined 9.8% in the past three months against the industry's growth of 1.5%.
Image Source: Zacks Investment Research
Financial Details
Dillard's ended the quarter with cash and cash equivalents of $650.3 million, long-term debt of $321.3 million, and total shareholders' equity of $1,610.4 million. The company provided $948.3 million of cash through operating activities. Capital expenditure for fiscal 2023 is likely to be $150 million, up from the year-ago figure of $120 million.
The company repurchased $24.3 million of Class A common stock under its existing repurchase program. As of Jan 28, it has shares worth $175.4 million remaining under its February 2022 plan.
Store Update
DDS announced the opening of one store at The Empire Mall in Sioux Falls, SD, in spring 2024. It also intends to close three stores in Santa Rosa Mall, FL; Conestoga Mall, NE; and Metrocenter Mall, AZ. That said, DDS currently operates 247 full-line Dillard’s stores, and 27 clearance stores in 29 states and on dillards.com.
For fiscal 2023, Dillard’s expects depreciation and amortization of $180 million compared with the prior year’s reported figure of $188 million. Net interest income is likely to be $11 million compared with the prior year’s expenses of $32 million.
The Zacks Consensus Estimate for Urban Outfitters’ current financial-year revenues suggests growth of 5% from the year-ago reported figure.
Arhaus, which operates as a lifestyle brand and premium retailer in the home furnishing market, carries a Zacks Rank #2 at present. The expected EPS growth rate for three to five years is 16.1%.
The Zacks Consensus Estimate for Arhaus’ revenues and EPS suggests growth of 54% and 26.1%, respectively, from the year-ago reported figure. Arhaus has a trailing four-quarter earnings surprise of 112%, on average.
American Eagle Outfitters, a retailer of casual apparel, accessories and footwear, currently carries a Zacks Rank of 2. AEO delivered an earnings surprise of 82.6% in the last reported quarter.
The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year sales and EPS suggests growth of 1.3% and 58.9%, respectively, from the year-ago reported figures.
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Dillard's (DDS) Surpasses Q4 Earnings & Revenue Estimates
Dillard's Inc. (DDS - Free Report) posted impressive fourth-quarter fiscal 2022 results, wherein the bottom and top lines surpassed the Zacks Consensus Estimate. This marked the eighth straight quarter of a top line beat and 10th straight quarter of bottom line beat. Results gained from better inventory management and consumer demand.
Adjusted earnings of $14.50 per share significantly surpassed the Zacks Consensus Estimate of $8.85. However, the bottom line declined 7.5% from the year-ago quarter's $15.68 per share.
Total revenues of $2,127 million increased 0.7% from the prior-year quarter and beat the Zacks Consensus Estimate of $2,111 million. Also, the figure came ahead of our estimate of $2,064.3 million.
Total retail sales (excluding CDI Contractors, LLC) remained almost flat year over year to $2,069 million. Comparable store sales also remained flat year over year. The company witnessed robust sales in cosmetics and ladies’ apparel. On the flip side, home and furniture was the weakest performing category.
The retail gross margin contracted 270 basis points (bps) to 38.7% from the year-ago quarter. On a consolidated basis, the gross margin of 37.7% reflects a 310-bps contraction from 40.8% in the prior-year quarter. This is mainly due to higher markdowns stemming from soft sales at the beginning of the quarter and during the holiday season.
Dillard's consolidated SG&A expenses (as a percentage of sales) expanded 70 bps to 21.6% from the prior-year quarter's 26.5%. In dollar terms, SG&A expenses (operating expenses) grew 4% to $458.4 million.
The retail operating expense rate expanded 90 bps to 22%. In dollar terms, retail operating expenses grew 4% to $456.3 million.
Shares of this Zacks Rank #4 (Sell) have declined 9.8% in the past three months against the industry's growth of 1.5%.
Image Source: Zacks Investment Research
Financial Details
Dillard's ended the quarter with cash and cash equivalents of $650.3 million, long-term debt of $321.3 million, and total shareholders' equity of $1,610.4 million. The company provided $948.3 million of cash through operating activities. Capital expenditure for fiscal 2023 is likely to be $150 million, up from the year-ago figure of $120 million.
The company repurchased $24.3 million of Class A common stock under its existing repurchase program. As of Jan 28, it has shares worth $175.4 million remaining under its February 2022 plan.
Store Update
DDS announced the opening of one store at The Empire Mall in Sioux Falls, SD, in spring 2024. It also intends to close three stores in Santa Rosa Mall, FL; Conestoga Mall, NE; and Metrocenter Mall, AZ. That said, DDS currently operates 247 full-line Dillard’s stores, and 27 clearance stores in 29 states and on dillards.com.
Dillard's, Inc. Price, Consensus and EPS Surprise
Dillard's, Inc. price-consensus-eps-surprise-chart | Dillard's, Inc. Quote
Outlook
For fiscal 2023, Dillard’s expects depreciation and amortization of $180 million compared with the prior year’s reported figure of $188 million. Net interest income is likely to be $11 million compared with the prior year’s expenses of $32 million.
Stocks to Consider
Here are three better-ranked stocks to consider — Urban Outfitters (URBN - Free Report) , Arhaus (ARHS - Free Report) and American Eagle Outfitters (AEO - Free Report) .
Urban Outfitters, a leading lifestyle product and services company, currently carries a Zacks Rank #2 (Buy). The expected EPS growth rate for three to five years is 18%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Urban Outfitters’ current financial-year revenues suggests growth of 5% from the year-ago reported figure.
Arhaus, which operates as a lifestyle brand and premium retailer in the home furnishing market, carries a Zacks Rank #2 at present. The expected EPS growth rate for three to five years is 16.1%.
The Zacks Consensus Estimate for Arhaus’ revenues and EPS suggests growth of 54% and 26.1%, respectively, from the year-ago reported figure. Arhaus has a trailing four-quarter earnings surprise of 112%, on average.
American Eagle Outfitters, a retailer of casual apparel, accessories and footwear, currently carries a Zacks Rank of 2. AEO delivered an earnings surprise of 82.6% in the last reported quarter.
The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year sales and EPS suggests growth of 1.3% and 58.9%, respectively, from the year-ago reported figures.