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Dillard's 1Q misses mark
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May 23, 2001: 1:50 p.m. ET
Earnings plunge more than 50% as comparable-store sales fall 8%
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NEW YORK (CNNfn) - Dillard's Inc. said fiscal first-quarter earnings dropped more than 50 percent Wednesday, missing analysts' forecasts, on declining sales amidst a slowing economy that has been tough on most retailers.
Dillard's (DDS: down $2.32 to $17.20, Research, Estimates) stock tumbled nearly 11 percent in afternoon trading Wednesday as investors sold their shares on the disappointing earnings news.
For the quarter ended May 5, the Little Rock, Ark.-based retail chain reported earnings before one-time items of $26 million, or 30 cents a share, down from $56 million, or 58 cents a share, in the year-earlier period.
Wall Street analysts expected the company to earn 33 cents a share, according to earnings tracker First Call.
Net income was $29 million, or 34 cents a share, compared with a net loss of $74 million, or 78 cents a share a year earlier.
An accounting change and early extinguishments of debt contributed to the year-ago loss.
Net sales for the quarter fell 8 percent to $1.920 billion from $2.083 billion a year earlier, and sales at stores open for more than a year also fell 8 percent.
Department stores have been struggling as consumers shift to discount chains like Wal-Mart (WMT: down $1.02 to $52.50, Research, Estimates), Kmart (KM: down $0.51 to $11.44, Research, Estimates), and Target (TGT: down $1.56 to $37.33, Research, Estimates) in order save money as they worry about layoffs and rising energy prices in the slowing economy.
In its earnings statement Dillard's blamed "continued softness in consumer demand in the broadline retail sector" and the company's inventory reduction measures for the sales decline.
The chain's earnings follows similarly lackluster earnings performances from Macy's and Bloomingdale's parent Federated Department Stores Inc. (FD: down $1.36 to $46.41, Research, Estimates) and J.C. Penney (JCP: down $0.88 to $21.18, Research, Estimates).
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Dillard's said the weak sales increased the impact of expenses on the bottom line, making it difficult to keep costs in line.
The company, which operates 342 stores in 29 states, said it is still evaluating the best use of eight former Montgomery Ward stores it acquired from the defunct chain. 
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Dillard's
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