Shares of Little Rock, Arkansas-based department store Dillard’s saw a decline today after the retailer posted disappointing results in its third-quarter earnings report, falling short of analyst estimates.
Dillard’s saw solid growth on the top line, as comparable sales increased 3 percent in the quarter, driving overall revenue up 4.7 percent to $1.42 billion, which topped estimates at $1.4 billion. However, that growth was largely propelled by markdowns and discounts rather than by improving operations, as gross margin in the retail business declined 87 basis points in the quarter.
“While we are encouraged by our 3 percent comparable sales performance, this was a disappointing quarter as markdowns weighed heavily on gross margin, particularly in the first month,” said William T. Dillard, II, chief executive officer of Dillard’s. “However, operating performance improved as the quarter progressed and sales turned positive. We also invested $54 million in share repurchases during the quarter.”
As of November 3, 2018, the company operated 265 Dillard’s locations and 27 clearance centers spanning 29 states as well as its own e-commerce site. Total square-footage as of November 3, 2018 was 49.1 million square-feet. On November 14th, Dillard’s opened its expansion at The Oaks Mall in Gainesville, Florida, adding 90,000 square-feet.
The retailer plans to close its West Town Center in Cincinnati, Ohio store in the fourth quarter of 2018 and its store in Arrowhead Mall in Muskogee, Oklahoma during the spring of 2019.