Press Release:
LITTLE ROCK, Ark.–(BUSINESS WIRE)– Dillard’s, Inc. (NYSE:DDS – News) (the “Company” or “Dillard’s”) announced operating results for the 13 and 52 weeks ended January 29, 2011. This release contains certain forward-looking statements. Please refer to the Company’s cautionary statements regarding forward-looking information included below under “Forward-Looking Information”.
Highlights of the 13 weeks ended January 29, 2011 included:
Earnings per share of $1.75 for the fourth quarter compared to $1.08 for the prior year fourth quarter. Net income was $109.6 million for the 13 weeks ended January 29, 2011 compared to $79.5 million for the 13 weeks ended January 30, 2010.
A comparable store sales increase of 7% for the fourth quarter.
Improved gross margin from retail operations of 90 basis points of sales compared to the prior year fourth quarter with a comparable store inventory decline of 2%.
Advertising, selling, administrative and general expense (“operating expense”) leverage of 70 basis points of sales. Operating expenses as a percent of sales were 22.8% and 23.5% for the quarters ended January 29, 2011 and January 30, 2010, respectively.
Repurchase of approximately $160.0 million (4.6 million shares) of Class A Common Stock under the Company’s $250 million share repurchase program.
Ending cash position at January 29, 2011 of $343.3 million compared to $341.7 million at January 30, 2010.
Highlights of the 52 weeks ended January 29, 2011 included:
Earnings per share of $2.67 for the fiscal year compared to $0.93 for the prior year. Net income was $179.6 million for the 52 weeks ended January 29, 2011 compared to $68.5 million for the 52 weeks ended January 30, 2010.
Improved gross margin from retail operations of 190 basis points of sales compared to the prior year with a comparable store inventory decline of 2%.
Operating expense leverage of 40 basis points of sales. Operating expenses as a percent of sales were 26.6% and 27.0% for the years ended January 29, 2011 and January 30, 2010, respectively.
Cash flow from operations of $503.9 million allowing the repurchase of approximately $413.9 million (14.6 million shares) of Class A Common Stock under the Company’s share repurchase programs. Total shares outstanding at January 29, 2011 were 60.0 million shares compared to 73.8 million shares at January 30, 2010.
Dillard’s Chief Executive Officer, William T. Dillard, II, stated, “Our fourth quarter results underscore a year of progress at Dillard’s. We began 2010 well positioned to achieve notable results, and we remained focused on our core initiatives throughout the year. We executed disciplined inventory management and controlled our expenses while seeking clear distinction in the mind of the fashion consumer. With our strong cash flow, we were able to execute our share repurchase program, acquiring $414 million of our Class A Common Stock as a vote of confidence in Dillard’s and in support of our shareholders. We are energized by these results, and we are excited about the future of Dillard’s.”
Income – 13 Weeks
Dillard’s reported pretax income (income before income taxes and equity in losses of joint ventures) of $162.6 million for the 13 weeks ended January 29, 2011 compared to a $115.5 million for the 13 weeks ended January 30, 2010.
Net income for the 13 weeks ended January 29, 2011 was $109.6 million, or $1.75 per diluted share, compared to a net income for the 13 weeks ended January 30, 2010 of $79.5 million, or $1.08 per share. Included in net income for the 13 weeks ended January 29, 2011 are the following items:
$7.5 million proceeds received as final payment related to hurricane losses ($4.8 million after tax or $0.08 per share).
a $2.2 million pretax gain on disposal of assets primarily related to three closed stores ($1.4 million after tax or $0.02 per share).
a $6.5 million income tax benefit ($0.10 per share) primarily related to net decreases in unrecognized tax benefits, interest and penalties due to resolutions of federal and state examinations, decreases in state net operating loss valuation allowances, and a decrease in a capital loss valuation allowance.
Included in net income for the 13 weeks ended January 30, 2010 are the following items:
non-cash pretax asset impairment and store closing charges of $3.1 million ($2.0 million after tax or $0.03 per share).
a $5.7 million pretax gain ($3.6 million after tax or $0.05 per share) related to proceeds received from settlement of the Visa Check/Mastermoney Antitrust litigation.
a $2.3 million pretax gain on disposal of assets related to the sale of a vacant store location ($1.5 million after tax or $0.02 per share).
See Page 2 for full year results
Income – 52 Weeks
Dillard’s reported pretax income (income before income taxes and equity in losses of joint ventures) of $268.7 million for the 52 weeks ended January 29, 2011 compared to $84.5 million for the 52 weeks ended January 30, 2010.
Net income for the 52 weeks ended January 29, 2011 was $179.6 million, or $2.67 per diluted share, compared to net income for the 52 weeks ended January 30, 2010 of $68.5 million, or $0.93 per share. Included in net income for the 52 weeks ended January 29, 2011 are the following items:
$7.5 million proceeds received as final payment related to hurricane losses ($4.8 million after tax or $0.07 per share).
non-cash pretax asset impairment and store closing charges of $2.2 million ($1.4 million after tax or $0.02 per share).
a $5.1 million pretax gain on disposal of assets primarily related to five closed stores ($3.3 million after tax or $0.05 per share).
a $9.7 million income tax benefit ($0.14 per share) primarily related to net decreases in unrecognized tax benefits, interest and penalties due to resolutions of federal and state examinations, decreases in state net operating loss valuation allowances, and a decrease in a capital loss valuation allowance.
Included in net income for the 52 weeks ended January 30, 2010 are the following items:
non-cash pretax asset impairment and store closing charges of $3.1 million ($2.0 million after tax or $0.03 per share).
a $5.7 million pretax gain ($3.6 million after tax or $0.05 per share) related to proceeds received from settlement of the Visa Check/Mastermoney Antitrust litigation.
a $2.3 million pretax gain on disposal of assets related to the sale of a vacant store location ($1.5 million after tax or $0.02 per share).
a $10.6 million income tax benefit, $0.14 per share, primarily related to state administrative settlement and a decrease in a capital loss valuation allowance.
a pretax gain on early extinguishment of debt of $1.7 million ($1.0 million after tax or $0.01 per share) related to the repurchase of certain unsecured notes.
Net Sales/Total Revenues – 13 Weeks
Net sales for the 13 weeks ended January 29, 2011 were $1.934 billion compared to net sales for the 13 weeks ended January 30, 2010 of $1.834 billion. Net sales include the operations of the Company’s construction business, CDI Contractors, LLC (“CDI”).
Total merchandise sales, which exclude CDI, for the 13-week period ended January 29, 2011 were $1.912 billion compared to $1.794 billion for the 13-week period ended January 30, 2010. Total merchandise sales increased 6% for the fourth quarter while sales in comparable stores increased 7% for the period.
Net Sales/Total Revenues – 52 Weeks
Net sales for the 52 weeks ended January 29, 2011 were $6.121 billion compared to net sales for the 52 weeks ended January 30, 2010 of $6.095 billion.
Total merchandise sales, which exclude CDI, for the 52-week period ended January 29, 2011 were $6.020 billion compared to $5.890 billion for the 52-week period ended January 30, 2010. Total merchandise sales increased 2% for the fiscal year while sales in comparable stores increased 3% for the period.
Gross Margin/Inventory
Gross margin from retail operations (which excludes CDI) improved approximately 90 basis points of sales during the fourth quarter primarily as a result of the Company’s strong sales performance marked by a 7% comparable store sales increase. Gross margin from retail operations for the 52 weeks ended January 29, 2011 improved 190 basis points of sales. Inventory in comparable stores declined 2% at January 29, 2011 compared to January 30, 2010.
Consolidated gross margin (which includes CDI) improved 110 basis points of sales during the 13 weeks ended January 29, 2011 compared to the 13 weeks ended January 30, 2010. Consolidated gross margin improved 230 basis points of sales for the 52 weeks ended January 29, 2011 compared to the prior fiscal year.
Advertising, Selling, Administrative and General Expenses
Advertising, selling, administrative and general expenses increased approximately $10.6 million during the fourth quarter of 2010 primarily as a result of increases in payroll, services purchased and insurance partially offset by savings in advertising and property taxes. Operating expenses were $441.6 million (22.8% of sales) for the 13 weeks ended January 29, 2011 compared to $431.0 million (23.5% of sales) for the 13 weeks ended January 30, 2010. Operating expenses for the 52-week periods ended January 29, 2011 and January 30, 2010 were $1,625.8 million (26.6% of sales) and $1,644.1 million (27.0% of sales), respectively.
Share Repurchase
During the 13 weeks ended January 29, 2011, Dillard’s purchased $160.0 million (4.6 million shares) of Class A Common Stock under the Company’s $250 million share repurchase program which was authorized by the board of directors in August of 2010. During the 52 weeks ended January 29, 2011, Dillard’s purchased $413.9 million (14.6 million shares) of Class A Common Stock.
Total shares outstanding (Class A and Class B Common Stock) at January 29, 2011 and January 30, 2010 were 60.0 million and 73.8 million, respectively. At January 29, 2011, $18.7 million remained under the Company’s share repurchase program.
Credit Facility
As of January 29, 2011, there were no short-term borrowings outstanding under the Company’s $1.0 billion revolving credit facility. The credit agreement expires on December 12, 2012, and there are no financial covenants under this facility provided its availability exceeds $100 million. Letters of credit totaling $90.8 million were outstanding under the revolving credit facility as of January 29, 2011.
Store Information
During the 13 weeks ended January 29, 2011, Dillard’s closed its Coral Square Mall location in Coral Springs, Florida (98,000 square feet) as well as its Miami International Mall location in Miami, Florida (98,000 square feet). Dillard’s has announced the upcoming closure of its Decatur Mall location in Decatur, Alabama (128,000 square feet). The store is expected to close mid-year 2011.
At January 29, 2011, the Company operated 294 Dillard’s locations and 14 clearance centers spanning 29 states and an Internet store at www.dillards.com. Total square footage at January 29, 2011 was 53.5 million.
