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Dillard's Q4 Earnings & Sales Miss Expectations, Decline Y/Y

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Dillard's Inc. (DDS - Free Report) posted fourth-quarter fiscal 2024 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. Meanwhile, the company’s sales and earnings declined year over year. A tough consumer landscape adversely impacted sales and comparable store sales (comps).

Earnings per share (EPS) of $13.48 surpassed the Zacks Consensus Estimate of $9.66. However, the bottom line declined 12.7% from $15.44 in the year-ago quarter.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Net sales of $2.017 billion fell 5.1% from the prior-year quarter but beat the Zacks Consensus Estimate of $1.936 billion. Including service charges and other income, the company reported sales of $2.052 million, down 5% year over year.

Dillard’s shares lost 5% on Feb. 25, despite better-than-expected fourth-quarter fiscal 2024 performance. Shares of the Zacks Rank #3 (Hold) company have gained 2% in the past three months against the industry's 1.1% decline.

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Detailed Analysis of DDS’s Q4 Performance

Total retail sales (excluding CDI Contractors, LLC) dipped 5.5% year over year to $1.943 billion. On a 13-week comparison basis, total retail sales decreased 1% year over year. Comps declined 1% year over year. Retail sales were affected by the challenging sales environment. Our model had predicted a comps decline of 8.5% for the fiscal fourth quarter.

The company witnessed robust sales in the home and furniture, and cosmetics categories. On the flip side, men’s apparel and accessories, and shoes were the weakest categories.

The consolidated gross margin contracted 170 basis points (bps) year over year to 34.9%. The retail gross margin of 36.1% reflected a year-over-year decrease of 160 bps due to gross margin significant declines in home and furniture and ladies’ apparel, along with a slight decline in shoes, cosmetics and men’s apparel and accessories. Retail gross margin was flat for juniors’ and children’s apparel and ladies’ accessories and lingerie.

Dillard's consolidated SG&A expenses (as a percentage of sales) were 22.4%, flat from the prior-year quarter. In dollar terms, SG&A expenses (operating expenses) declined 5.2% year over year to $452 million. The decrease in operating expenses is mainly attributed to stringent expense control measures.

Our model had predicted SG&A expense (as a percentage of sales) to be 24.1%, up 200 bps. In dollar terms, we expected SG&A expenses to decline 0.2% year over year to $475.6 million.

Dillard's, Inc. Price, Consensus and EPS Surprise

Dillard's, Inc. Price, Consensus and EPS Surprise

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

Dillard’s Other Financial Details

DDS ended fiscal 2024 with cash and cash equivalents of $717.9 million, long-term debt of $321.6 million, and a total shareholders' equity of $1.796 billion. The company provided $714.1 million of net cash from operating activities as of Feb. 1, 2025. Inventory increased 7% year over year as of Feb. 1, 2025.

In the fourth quarter of fiscal 2024, the company repurchased 36,000 shares for $14 million, reflecting an average price of $391.04 per share. As of Feb. 1, 2025, the company had $273 million remaining under its current share repurchase authorization announced in May 2023.

The company expects capital expenditure of $120 million for fiscal 2025, suggesting an increase from the $105 million reported in fiscal 2024.

As of Feb. 1, 2025, DDS operated 272 Dillard’s stores, including 28 clearance stores across 30 states and an online store at dillards.com.

What Dillard’s Expects for FY25?

For fiscal 2025, Dillard’s expects depreciation and amortization expenses of $180 million. The company projects a net interest and debt income of $8 million compared with an income of $14 million in fiscal 2024. It anticipates rentals of $20 million compared with $21 reported in fiscal 2024.

Key Picks

We have highlighted three better-ranked stocks, including Boot Barn (BOOT - Free Report) , Deckers Outdoor (DECK - Free Report) and Genesco (GCO - Free Report) .

Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. BOOT currently sports a Zacks Rank #1 (Strong Buy).  You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for BOOT’s current financial-year sales and earnings per share implies growth of 14.9% and 21.4%, respectively, from the year-ago reported figures. The company has a trailing four-quarter earnings surprise of 7.2%, on average.

Deckers Outdoor is a leading designer, producer and brand manager of innovative, niche footwear and accessories developed for outdoor sports and other lifestyle-related activities. DECK currently sports a Zacks Rank #1.

The consensus estimate for Deckers’ current financial-year sales and earnings indicates growth of 15.6% and 21.2%, respectively, from the year-ago reported figures. DECK delivered an average earnings surprise of 36.8% in the trailing four quarters.

Genesco is a specialty retail and branded company that sells footwear and accessories in retail stores throughout the United States, Canada, the United Kingdom and the Republic of Ireland. GCO currently sports a Zacks Rank #1.

The Zacks Consensus Estimate for Genesco’s current financial-year sales and earnings indicates growth of 1.5% and 67.9%, respectively, from the year-ago reported figures. GCO delivered an average earnings surprise of 36.9% in the trailing four quarters.

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