Dillard’s (DDS) is large departmental store chain, featuring fashion apparel and home furnishings. Management is undertaking restructuring initiatives and inventory reduction efforts to save costs and boost profitability, which augur well for future operating performance.
Moreover, the company has a strong balance sheet. And for the fourth quarter of 2009, the company reported strong results with earnings of $1.03 which outpaced the Zacks Consensus of $0.50.
Our long-term recommendation on Dillard’s is Outperform as we anticipate it to perform well above the broader market. However, intense competition from other established players and factors such as consumer preferences and spending patterns undermines the company’s future growth prospects and profitability.Zacks Investment Research
