Dillard’s Inc. (NYSE:DDS) reported fourth-quarter results on Tuesday that beat earnings forecasts but fell short on revenue, as the department store chain contended with a difficult retail backdrop.
Shares rose about 1.39% in premarket trading following the announcement.
Adjusted earnings per share for the quarter ended January 31 came in at $13.05, well above analyst expectations of $10.61. Revenue totaled $1.96 billion, missing the consensus estimate of $2.04 billion.
Total retail sales slipped 1% year over year to $1.92 billion, while comparable store sales also declined 1%. The company said a winter storm during the third weekend of January disrupted operations at more than one-third of its locations, weighing on performance.
For the full fiscal year, Dillard’s posted net income of $570.2 million, or $36.42 per share, compared with $593.5 million, or $36.82 per share, a year earlier. Total retail sales were broadly unchanged at $6.23 billion.
Retail gross margin for the year stood at 40.8%, slightly below 41.0% in the prior year, while operating expenses increased to 27.2% of sales from 26.7%.
“We reported a respectable year. We achieved retail gross margin of 40.8% in a rapidly changing merchandising environment with unpredictable costs,” said Chief Executive Officer William T. Dillard, II. “We rewarded our shareholders with the largest dividend in our history and still held around $1.1 billion in cash and short-term investments at year-end.”
Fourth-quarter retail gross margin remained steady at 36.1% of sales, unchanged from the prior year. Operating expenses rose to $463.0 million, or 23.6% of sales, compared with $452.0 million, or 22.4% of sales, primarily reflecting higher payroll and related costs.
Dillard’s finished the year with $1.07 billion in cash and short-term investments, while inventory levels increased 2% year over year. During the fiscal year, the company repurchased roughly 300,000 shares for $107.8 million at an average price of $359.16 per share.