Dillards (DDS) earnings release review for the 2nd quarter of their 2021 fiscal year
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Category: Stock Market and Dillards (DDS)
Date: 16 August 2021 Stock Price of Dillards: $196.21 Market Capital of Dillards: $4.15 billion We take a look at the 2nd quarter 2021 earnings report of Dillards, a fashion retailer whose 2nd quarter 2021 revenues topped $1.57 billion, which is up 72% from the same quarter of the previous year and they recorded a net income of $187 million. The group currently operates out of 249 locations across the US.
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Dillard's Chief Executive Officer William T. Dillard, II - The strong consumer demand we saw in the first quarter continued throughout the second quarter. This momentum, combined with our continuing focus on inventory and expense control, produced a sequential record performance. We ended the quarter with $670 million in cash even after repurchasing $112 million of stock. "
About Dillards
Dillard’s, Inc. ranks among the nation’s largest fashion retailers, with annual sales exceeding $6.3 billion. The Company focuses on delivering style, service and value to its shoppers by offering compelling apparel, cosmetics and home selections complemented by exceptional customer care. Dillard’s stores offer a broad selection of merchandise and feature products from both national and exclusive brand sources. The Company operates 265 Dillard’s locations and 26 clearance centers spanning 29 states, plus an internet store at www.dillards.com.
Ladies coats. Image as obtained from Dillards
Overview of Dillards' 2nd quarter 2021 earnings
- Total retail sales increased 72%
- Net income of $185.7 million compared to a net loss of $8.6 million
- Net income of $8.81 per share compared to a net loss of $0.37 per share
- Retail gross margin of 41.7% compared to 31.1%
- Inventory decreased approximately 13%
- Operating expenses were $365.9 million (23.3% of sales) compared to $267.1 million (29.1% of sales)
- Share repurchases of $112.2 million during the quarter
- Cash flow provided by operations of $492.4 million compared to $294.5 million of cash used in operations (26 weeks)
- Ending cash of $669.5 million compared to $82.9 million with no short-term borrowings compared to $229.6 million
Dillards' management commentary on their 2nd quarter 2020 earnings report
LITTLE ROCK, Ark.--(BUSINESS WIRE)-- Dillard’s, Inc. (NYSE: DDS) (the “Company” or “Dillard’s”) announced operating results for the 13 and 26 weeks ended July 31, 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, "The strong consumer demand we saw in the first quarter continued throughout the second quarter. This momentum, combined with our continuing focus on inventory and expense control, produced a sequential record performance. We ended the quarter with $670 million in cash even after repurchasing $112 million of stock."
Dillard's Chief Executive Officer William T. Dillard, II stated, "The strong consumer demand we saw in the first quarter continued throughout the second quarter. This momentum, combined with our continuing focus on inventory and expense control, produced a sequential record performance. We ended the quarter with $670 million in cash even after repurchasing $112 million of stock."
Related Topics
Share Repurchase
During the 13 weeks ended July 31, 2021, the Company purchased $112.2 million (approximately 0.7 million shares) of Class A Common Stock under its March 2018 share repurchase program.
During the 26 weeks ended July 31, 2021, the Company purchased $171.0 million (approximately 1.4 million shares) of Class A Common Stock under its March 2018 share repurchase program.
As of July 31, 2021, authorization of $2.1 million remained under the March 2018 program and $500.0 million remained under the May 2021 program. Total shares outstanding (Class A and Class B Common Stock) at July 31, 2021 and August 1, 2020 were 20.7 million and 22.6 million, respectively.
Store Information
During the second quarter, the Company closed its Paradise Valley Mall location in Phoenix, Arizona (200,000 square feet). The Company plans to close its clearance center at Valle Vista Mall in Harlingen, Texas (100,000 square feet) during the third quarter. Dillard's plans to open its new location at Mesa Mall in Grand Junction, Colorado (100,000 square feet) during the third quarter.
The Company operates 249 Dillard’s locations and 31 clearance centers spanning 29 states and an Internet store at dillards.com. Total square footage at July 31, 2021 was 47.7 million square feet.
During the 13 weeks ended July 31, 2021, the Company purchased $112.2 million (approximately 0.7 million shares) of Class A Common Stock under its March 2018 share repurchase program.
During the 26 weeks ended July 31, 2021, the Company purchased $171.0 million (approximately 1.4 million shares) of Class A Common Stock under its March 2018 share repurchase program.
As of July 31, 2021, authorization of $2.1 million remained under the March 2018 program and $500.0 million remained under the May 2021 program. Total shares outstanding (Class A and Class B Common Stock) at July 31, 2021 and August 1, 2020 were 20.7 million and 22.6 million, respectively.
Store Information
During the second quarter, the Company closed its Paradise Valley Mall location in Phoenix, Arizona (200,000 square feet). The Company plans to close its clearance center at Valle Vista Mall in Harlingen, Texas (100,000 square feet) during the third quarter. Dillard's plans to open its new location at Mesa Mall in Grand Junction, Colorado (100,000 square feet) during the third quarter.
The Company operates 249 Dillard’s locations and 31 clearance centers spanning 29 states and an Internet store at dillards.com. Total square footage at July 31, 2021 was 47.7 million square feet.
Dillards (DDS) stock price chart over the last 5 years
The image below shows the stock price history of Dillards (NYSE: DDS) for the last 5 years. And its been a very good time of late for Dillards stockholders Over the last 5 years the stock of Dillards increased by 232.2%. No investor would say no to those type of returns.
The stock of Dillards is currently trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum of Dillard's stock is positive at this point
The stock of Dillards is currently trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum of Dillard's stock is positive at this point
Dillards (NYSE:DDS) stock price history over the last 5 years.
Dillards (DDS) stock vs American Eagle Outfitters (AEO) stock over the last 5 years
The image below shows the stock price history of Dillards (DDS) and American Eagle Outfitters (URBN) over the last 5 years. Both are active in the clothing retail and fashion space
The stock of Dillards has easily outperformed that of American Eagle Outfitters over the last 5 years. Thanks largely to the massive surge in its stock price over the last 12 months
- Dillards:232.2%
- American Eagle Outfitters: 81.2%
The stock of Dillards has easily outperformed that of American Eagle Outfitters over the last 5 years. Thanks largely to the massive surge in its stock price over the last 12 months
Dillards (DDS) stock vs American Eagle Outfitters (AEO) stock over the last 5 years
Dillards (DDS) latest stock valuation
So based on the 2nd quarter 20120 earnings report of Dillards (NYSE: DSS) what do we value Dillards stock at? Based on the earnings reported we value the stock of Dillards a $151.90 a stock.
We therefore feel that the stock of Dillards is overvalued and a good price long term fundamental or value investors should look to enter the stock at is at least 10% below our target price (full value price) which in this case is $151.90 We therefore believe a good entry point into Dillard's stock would be around $136.70 or below.
We expect the stock of Dillards to pull back from its current level to levels closer to our target price in coming weeks and months.
We therefore feel that the stock of Dillards is overvalued and a good price long term fundamental or value investors should look to enter the stock at is at least 10% below our target price (full value price) which in this case is $151.90 We therefore believe a good entry point into Dillard's stock would be around $136.70 or below.
We expect the stock of Dillards to pull back from its current level to levels closer to our target price in coming weeks and months.
Various menswear . Image as obtained from Dillards
Next earnings release of Dillards (DDS)
It is expected that Dillards will release their 3rd quarter 2021 earnings report in mid November 2021