Boston, MA 05/19/2014 (wallstreetpr) – Dillard’s, Inc. (NYSE:DDS) announced operating results for the first quarter (1Q2014) ended May 3, 2014, with diluted EPS of $2.56 and operating cash flow of $161.9 million.
First quarter performance
Dillard’s, Inc. (NYSE:DDS)’s reported net income in 1Q2014 was $111.7 million or $2.56 per share versus $117.2 million or $2.50 per share in first quarter 2013 (1Q2013).
During the quarter, net sales including the Company’s construction business were $1.55 billion versus $1.54 billion a year ego. The marginal rise was due to increasing sales trend across the comparable stores that offset the declining performance of Dillard’s construction business.
The comparable store sales grew by 2% year over year during 1Q2014 that increased the overall merchandise sales by only 1% to $1.54 billion from $1.530 billion for the same period 2013. The retail operation, which accounts 99% of total revenue during 1Q2014, increased mainly due to a strong trend in apparel and accessories for men, women and children compared to home and furniture.
But, the increasing markdowns over the quarter raised the costs of sales and decreased the gross margin for the retail operation by 14 basis points versus prior year period. During the period, inventory rose by 1%. But, consolidated gross margin remained flat at 39.5% for the first quarter of 2014 and 2013. Despite lower advertising costs, SG&A expenses increased due to higher selling payroll.
Financial position
Dillard’s, Inc. (NYSE:DDS) generated higher cash flow from operation compared to prior year period. During 1Q2014, operating cash flow was $162 million (1Q2013: $137 million) due to positive improvement in working capital. But, the Company’s reported free cash flow was $139 million versus $130 million in 1Q2013, due to higher cash of $23 million used in capital expenditure.
During the quarter, Dillard repurchased $65.9 million (0.7 million shares) of shares at an average price of $89.34 per share under its repurchase plan that improved the cash used in financing activities as well as net cash from its operation. Accordingly, the net cash balance as of May 3, 2014 was $32 million.
Dillard’s, Inc. (NYSE:DDS) is financially healthy with strong balance sheet and liquidity position with shareholder’s equity of $2 billion and total debt of $622.1 million as of May 3, 2014.
