Dillard’s, Inc. Reports First Quarter Results

Dillard’s, Inc. (NYSE: DDS) (the “Company” or “Dillard’s”) announced operating results for the 13 weeks ended May 1, 2021. This release contains certain forward-looking statements. Please refer to the Company’s cautionary statements included below under “Forward-Looking Information.”

Dillard's Chief Executive Officer William T. Dillard, II stated, "There are a lot of good things to say about this quarter. As vaccinations increased, stimulus money was released and warmer weather arrived, we saw sales increase over 2019 levels, with momentum continuing throughout the quarter. We are pleased to report record performances in gross margin and earnings per share. With strong cash flow, we accomplished $59 million in share repurchase while still ending the quarter with $616 million in cash."

Due to the significant impact of COVID-19 on prior year figures, this release will include certain comparisons to 2019 to provide additional context.

Selected Financial Metrics of the First Quarter (Compared to the Prior Year First Quarter)

Total retail sales increased 73%.
Net income of $158.2 million compared to a net loss of $162.0 million
Net income of $7.25 per share compared to net loss of $6.94 per share
Retail gross margin of 42.7% compared to 12.8%
Inventory decreased approximately 17%
Operating expenses were $336.6 million (25.3% of sales) compared to $290.4 million (36.9% of sales).
Share repurchases of $58.8 million during the quarter
Cash flow from operations of $302.4 million compared to $111.1 million of cash used in operations
Ending cash of $616 million compared to $70 million

First Quarter Results

Dillard’s reported net income for the 13 weeks ended May 1, 2021 of $158.2 million, or $7.25 per share, compared to a net loss of $162.0 million, or $6.94 per share, for the prior year first quarter. Included in net income for the 13 weeks ended May 1, 2021 is a pretax gain of $24.6 million ($19.2 million after tax or $0.88 per share) primarily related to the sale of three store properties.

Sales

Net sales for the 13 weeks ended May 1, 2021 and the 13 weeks ended May 2, 2020 were $1,328.5 million and $786.7 million, respectively. Net sales includes the operations of the Company’s construction business, CDI Contractors, LLC ("CDI").

Total retail sales (which excludes CDI) for the 13-week periods ended May 1, 2021 and May 2, 2020 were $1,296.7 million and $751.0 million, respectively. Total retail sales increased 73% for the 13-week period ended May 1, 2021. Stronger performing categories were juniors' and children's apparel, men's apparel and accessories and ladies' accessories and lingerie.

Comparing to the first quarter of 2019, total retail sales for the 13-week periods ended May 1, 2021 and May 4, 2019 were $1,296.7 million and $1,420.5 million, respectively, a decrease of 9%. Retail sales for the first quarter of 2021 compared to the first quarter of 2019 in comparable stores declined 6%.

Gross Margin / Inventory

Consolidated gross margin (which includes CDI) for the 13 weeks ended May 1, 2021 improved significantly to 41.7% compared to 12.5% for the prior year first quarter.

Retail gross margin (which excludes CDI) for the 13 weeks ended May 1, 2021 improved significantly to 42.7% compared to 12.8% for the prior year first quarter.

Compared to the first quarter of 2019, retail gross margin improved 489 basis points of sales to 42.7% from 37.8%.

Management attributes the substantial improvement in gross margin to better inventory management and customer demand leading to decreased markdowns in the first quarter of 2021.

Inventory decreased approximately 17% at May 1, 2021 compared to May 2, 2020.

Selling, General & Administrative Expenses

Consolidated selling, general and administrative expenses ("operating expenses") for the 13 weeks ended May 1, 2021 were $336.6 million (25.3% of sales) compared to $290.4 million (36.9% of sales) for the prior year first quarter.

Comparing to the first quarter of 2019, retail operating expenses for the 13 weeks ended May 1, 2021 and May 4, 2019 were $335.1 million (25.9% of sales) and $403.3 million (28.4% of sales), respectively.

The decrease is primarily due to decreased payroll and payroll related expenses.

Share Repurchase

During the 13 weeks ended May 1, 2021, the Company purchased $58.8 million (approximately 625,000 shares) of Class A Common Stock under its $500 million share repurchase program. As of May 1, 2021, authorization of $114.3 million remained under the program. Total shares outstanding (Class A and Class B Common Stock) at May 1, 2021 and May 2, 2020 were 21.4 million and 23.2 million, respectively.

Store Information

The Company operates 250 Dillard’s locations and 31 clearance centers spanning 29 states and an Internet store at dillards.com. Dillard's has closed and sold its Cortana Mall location in Baton Rouge, Louisiana (120,000 square feet). Total square footage at May 1, 2021 was 47.9 million square feet.

Dillard’s, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)

(In Millions, Except Per Share Data)