LITTLE ROCK, Ark. – Dillard’s retail sales contracted slightly during the first quarter in an environment that department store retailer described as “challenging.” For the quarter ended May 4, retail sales slipped 1% and comps declined 2%.
Home and furniture were neither among the strongest performing areas of the store (cosmetics came out on top) nor the weakest (men’s apparel and accessories).
Retail gross margin (which excludes the company’s CDI construction business) was 46.2% of sales compared to 45.6% of sales for the prior-year period. Gross margin increased moderately in home, furniture, and ladies’ accessories and lingerie, and increased slightly in men’s apparel and accessories, ladies’ apparel, and juniors’ and children’s apparel. Gross margin was essentially flat in shoes and cosmetics.
During the quarter, the retailer focused on profitable sales and inventory control, said CEO William T. Dillard II. “As a result, our retail gross margin was 46.2% and inventory was down 2%. For the first time in our history, we reported cash and short-term investments exceeding $1 billion.”
Total company revenue, which includes CDI, decreased 2% to $1.55 billion. Net income fell 11% to $180.0 million, or $11.09 per share, but beat expectations.
During the quarter, Dillard’s opened its first store in South Dakota, marking its 30th state of operation. It also announced the upcoming closure of its Eastwood Mall Clearance Center in Niles, Ohio, which is slated for July.
The company ended the quarter with 274 Dillard’s stores, including 29 clearance centers.
See also: Home shines for Dillard’s in a challenged Q4 environment