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Why Dillard's (DDS) Is Losing Sheen Post-Q4 Earnings
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Dillard's, Inc. (DDS - Free Report) has exhibited a bearish run in the last one year. Shares of this Zacks Rank #5 (Strong Sell) company have underperformed both the Zacks categorized Retail – Regional Department Stores industry and the broader sector. Over the past year, the stock declined nearly 40%, while the industry fell 29.1%. On the other hand, the broader Retail-Wholesale sector of which they are part of, gained 11.4% during the said time period.
Further, the stock has touched a 52-week low of $51.16 on Mar 6, though it eventually closed a little higher at $51.40. We note that since Feb 21, when the company came out with its fourth-quarter fiscal 2016 results, the stock declined 4%.
A glance at Dillard's trailing price-to-earnings (P/E) ratio reveals that the stock seems overvalued when compared with the industry. The stock has a trailing 12-month P/E ratio of 10.20, which is below the median level of 10.83 and the high level of 13.77 scaled in the past one year. On the contrary, the trailing 12-month P/E ratio for the industry is 7.39.
Let’s Delve Deeper
We note that Dillard's has been facing persistent challenging trends in the apparel retail segment due to the changing preferences of customers from offline to online. This resulted in the company’s second consecutive earnings miss when it reported fourth-quarter fiscal 2016 results.
The company posted adjusted earnings of $1.85 per share, which missed the Zacks Consensus Estimate of $2.34 and fell nearly 17.8% from the year-ago quarter. Earnings lagged due to soft sales stemming from weak traffic trends attributed to industry challenges, mainly owing to change in consumer preference from offline to online shopping. Moreover, Dillard’s fiscal 2017 outlook indicates significant cost pressures, which might hurt margins and earnings.
Consequently, estimates have witnessed a downward revision in the past 30 days. The Zacks Consensus Estimate of $4.36 and $4.17 for fiscal 2017 and 2018 has declined by $1.10 and 82 cents, respectively, during the same period.
Dillard's delivered negative earnings surprises of 15.6%, 13.0% and 20.9% in the first, third and fourth quarters of fiscal 2016, respectively. Further, it posted an average miss of 11.6% in the past four quarters.
Soft economic recovery, stiff competition along with other macroeconomic challenges in the retail merchandise space may weigh upon the company’s financial performance.
Key Picks
Investors looking for better-ranked stocks in the broader Retail-Wholesale sector may select Big 5 Sporting Goods Corp. (BGFV - Free Report) , The Children's Place, Inc. (PLCE - Free Report) and MarineMax, Inc. (HZO - Free Report) .
Big 5 Sporting, with a long-term earnings growth rate of 12%, has gained 31.4% in the past one year. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Children's Place, with a long-term earnings growth rate of 10.3% carries a Zacks Rank #2 (Buy). The stock has also surged 45.5% in the past one year.
MarineMax, a Zacks Rank #2 stock, has posted an impressive average beat of 131.2% in the trailing four quarters. In addition, the stock rose 20.4% in the past one year.
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In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
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Why Dillard's (DDS) Is Losing Sheen Post-Q4 Earnings
Dillard's, Inc. (DDS - Free Report) has exhibited a bearish run in the last one year. Shares of this Zacks Rank #5 (Strong Sell) company have underperformed both the Zacks categorized Retail – Regional Department Stores industry and the broader sector. Over the past year, the stock declined nearly 40%, while the industry fell 29.1%. On the other hand, the broader Retail-Wholesale sector of which they are part of, gained 11.4% during the said time period.
Further, the stock has touched a 52-week low of $51.16 on Mar 6, though it eventually closed a little higher at $51.40. We note that since Feb 21, when the company came out with its fourth-quarter fiscal 2016 results, the stock declined 4%.
A glance at Dillard's trailing price-to-earnings (P/E) ratio reveals that the stock seems overvalued when compared with the industry. The stock has a trailing 12-month P/E ratio of 10.20, which is below the median level of 10.83 and the high level of 13.77 scaled in the past one year. On the contrary, the trailing 12-month P/E ratio for the industry is 7.39.
Let’s Delve Deeper
We note that Dillard's has been facing persistent challenging trends in the apparel retail segment due to the changing preferences of customers from offline to online. This resulted in the company’s second consecutive earnings miss when it reported fourth-quarter fiscal 2016 results.
Also, sales in the quarter lagged estimates after four straight beats. Further, both the top and bottom lines plunged year over year. (Read more: Dillard's Plunges 8.3% on Q4 Earnings and Sales Miss)
The company posted adjusted earnings of $1.85 per share, which missed the Zacks Consensus Estimate of $2.34 and fell nearly 17.8% from the year-ago quarter. Earnings lagged due to soft sales stemming from weak traffic trends attributed to industry challenges, mainly owing to change in consumer preference from offline to online shopping. Moreover, Dillard’s fiscal 2017 outlook indicates significant cost pressures, which might hurt margins and earnings.
Consequently, estimates have witnessed a downward revision in the past 30 days. The Zacks Consensus Estimate of $4.36 and $4.17 for fiscal 2017 and 2018 has declined by $1.10 and 82 cents, respectively, during the same period.
Dillard's, Inc. Price and Consensus
Dillard's, Inc. Price and Consensus | Dillard's, Inc. Quote
Dillard's delivered negative earnings surprises of 15.6%, 13.0% and 20.9% in the first, third and fourth quarters of fiscal 2016, respectively. Further, it posted an average miss of 11.6% in the past four quarters.
Soft economic recovery, stiff competition along with other macroeconomic challenges in the retail merchandise space may weigh upon the company’s financial performance.
Key Picks
Investors looking for better-ranked stocks in the broader Retail-Wholesale sector may select Big 5 Sporting Goods Corp. (BGFV - Free Report) , The Children's Place, Inc. (PLCE - Free Report) and MarineMax, Inc. (HZO - Free Report) .
Big 5 Sporting, with a long-term earnings growth rate of 12%, has gained 31.4% in the past one year. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Children's Place, with a long-term earnings growth rate of 10.3% carries a Zacks Rank #2 (Buy). The stock has also surged 45.5% in the past one year.
MarineMax, a Zacks Rank #2 stock, has posted an impressive average beat of 131.2% in the trailing four quarters. In addition, the stock rose 20.4% in the past one year.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>