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Holiday quarter is weak for Dillard's

The chain's earnings fell 29 percent to $51-million, or 61 cents a share as revenues dipped 3.7 percent to $2.3-billion.

The good news that spread to many retailers during the holidays eluded the Dillard's chain, which on Thursday reported declines in both net income and sales for the fourth quarter.

While Dillard's said its continuing shift to more private-label goods is enhancing profitability, the Little Rock, Ark., company also increased its margins by trimming expenses, closing underperforming stores and reducing its advertising budget in the quarter that ended Jan. 31.

Earnings dropped 29 percent to $51-million, or 61 cents a share, down from $72-million, or 85 cents a share, in the same period a year ago. Dillard's stock closed Thursday at $17.42, up 32 cents. That's partly because analysts were projecting earnings of 3 cents a share less than the company reported.

Dillard's revenues fell 3.7 percent to $2.3-billion in the quarter. Sales in stores open more than a year, a measure of a retailer's hold on existing customers, were down by 4 percent.

Dillard's competes in a department store universe of chains that sell moderate to better priced goods. It's a sector that has been squeezed by a weak economy and discounters. But some department store chains have reported steadily improving sales and earnings since the Bush White House pushed through tax breaks in an effort to stimulate the economy.

Indeed, Dillard's sales improved by 2 percent in January. Revenues were also up 2 percent in February. However, many rivals did better. February sales were up 24 percent at Neiman Marcus, 12 percent at Nordstrom, 12 percent at J.C. Penney, 9 percent at Federated Department Stores Inc. and 8 percent at Saks Inc. department stores, according to Bernard Sands, a New York firm that tracks retailers' performance for suppliers.

Dillard's also said sales trends were bolstered by stronger performance in western states, but dragged down by weaker results in the Midwest and central states.

For the fiscal year, Dillard's reported net income of $9-million, or 11 cents a share, which was an improvement compared with a loss of $398-million, or $4.67 a share, in fiscal year 2003. Revenues were $7.6-billion, down from $7.9-billion.

- Mark Albright can be reached at albright@sptimes.com or 727 893-8252.