U.S. departmental store chain Dillard’s Inc. (DDS) experienced a 3% increase in its same store sales as well as net sales figures for the five weeks ended October 2, 2010. Sales in comparable stores decreased 6% in September, 2009.
The company generated sales of $532.3 million for the month, up from $519.3 million recorded in the same period, last year. Region-wise, sales trend was above average in the Central area, in line with ongoing trend in Eastern province, while it was below average in the Western side.
Although sales of shoes were higher than average in the month of September, men’s apparel and accessories category posted disappointing results.
Year-to-date sales were $3,749.6 million, flat on a year-over-year comparison and comparable stores sales inched up 1% for the 35-week period.
For the second quarter 2010, Dillard’s reported net sales of $1,389 million compared with $1,428 million in the prior-year quarter. The comparable store inventory declined 6%, while comparable store sales remained unchanged on a percentage basis for the 13-week period ended July 31, 2010.
During the quarter, Dillard’s closed its Helena, Montana store (65,000 square feet). As of July 31, 2010, the company operated 296 locations and 14 clearance centers spanning 29 states with a total square footage of 53.7 million.
Little Rock, Arkansas-based Dillard’s, along with its subsidiaries, operates as a fashion apparel and home furnishing retailer. Although Dillard’s is a large regional departmental store, it faces competition at the national and local level from peers such as Kohl’s Corp. (KSS) (September same store sales up 3.0%), Macy’s Inc. (M) (September same store sales up 4.8%) and J. C. Penney Company Inc. (JCP) (September same store sales up 5.1%).
With an expectation that Dillard’s will perform well above its peers and industry in the coming quarters, we maintain our Outperform rating on the stock.
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