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February 23, 2012 - Little Rock, Arkansas - Dillard's, Inc. (DDS-NYSE) (the "Company" or "Dillard's") announced operating results for the 13 and 52 weeks ended January 28, 2012. This release contains certain forward-looking statements. Please refer to the Company's cautionary statements regarding forward-looking information included below under "Forward-Looking Information".
Fourth Quarter Results
Dillard's reported income for the 13 weeks ended January 28, 2012 of $141.5 million, or $2.77 per share. Included in net income for the 13 weeks ended January 28, 2012 is a $44.5 million pre-tax credit ($28.7 million after tax or $0.56 per share) related to the settlement of a lawsuit with JDA Software Group. Excluding this credit, the Company would have recorded net income of $112.8 million or $2.21 per share marking a record-setting fourth quarter earnings per share performance.
Other highlights of the 13 weeks ended January 28, 2012 included:
Dillard's Chief Executive Officer, William T. Dillard, II, stated, "We are pleased with our progress in 2011 where we delivered a record setting performance. With strong operating cash flow, we purchased $491 million of our Class A Common Stock during the year with $99 million accomplished in the fourth quarter. In 2012, we will remain focused on creating a clearly distinctive shopping experience at Dillard's in merchandise selection as well as in customer service."
For the prior year fourth quarter, the 13 weeks ended January 29, 2011, Dillard's reported net income of $109.6 million, or $1.75 per share. Included in net income for the prior year fourth quarter are pre-tax credits totaling $9.7 million ($12.7 million after tax or $0.20 per share) which is comprised of the following items:
Excluding these after-tax credits, the Company would have recorded net income of $96.9 million or $1.55 per share for the prior year fourth quarter.
Fiscal Year Results
Dillard's reported net income for the 52 weeks ended January 28, 2012 of $463.9 million, or $8.52 per share. Included in net income for the 52 weeks ended January 28, 2012 is a net pre-tax credit totaling $50.9 million ($234.5 million after tax or $4.31 per share) which is comprised of the following items:
Excluding this net after-tax credit, the Company would have recorded net income of $229.4 million or $4.21 per share for the 52 weeks ended January 28, 2012 which is a record-setting earnings per share performance.
Other highlights of the 52 weeks ended January 28, 2012 included:
For the prior fiscal year, the 52 weeks ended January 29, 2011, Dillard's reported net income of $179.6 million, or $2.67 per share. Included in net income for the prior year fiscal year are net pre-tax credits totaling $10.4 million ($16.4 million after tax or $0.24 per share) which is comprised of the following items:
Excluding this net after-tax credit, the Company would have recorded net income of $163.2 million or $2.43 per share for the prior fiscal year.
Net Sales - 13 Weeks
Net sales for the 13 weeks ended January 28, 2012 were $1.970 billion compared to net sales for the 13 weeks ended January 29, 2011 of $1.934 billion. Net sales include the operations of the Company's construction business, CDI Contractors, LLC ("CDI").
Total merchandise sales (which exclude CDI) for the 13-week period ended January 28, 2012 were $1.946 billion compared to $1.912 billion for the 13-week period ended January 29, 2011. Total merchandise sales increased 2% during the fourth quarter. Sales in comparable stores increased 3%.
Net Sales - 52 Weeks
Net sales for the 52 weeks ended January 28, 2012 were $6.264 billion compared to net sales for the 52 weeks ended January 29, 2011 of $6.121 billion.
Total merchandise sales for the 52-week period ended January 28, 2012 were $6.194 billion compared to $6.020 billion for the 52-week period ended January 29, 2011. Total merchandise sales increased 3% during the fiscal year. Sales in comparable stores increased 4%.
Service Charges and Other Income
Included in service charges and other income for the 13 weeks ended January 29, 2011 is $7.5 million proceeds received as final payment related to hurricane losses ($4.8 million after tax or $0.08 per share).
Gross Margin/Inventory
Gross margin from retail operations (which excludes CDI) was 34.4% (of sales) for the 13 weeks ended January 28, 2012 compared to 34.5% for the prior year fourth quarter. Gross margin from retail operations for the 52 weeks ended January 28, 2012 improved 30 basis points (of sales) to 35.9% compared to 35.6% for the prior fiscal year.
Consolidated gross margin for the 13 weeks ended January 28, 2012 was 34.0% compared to 34.1% during the prior year fourth quarter. Consolidated gross margin for the 52 weeks ended January 28, 2012 improved 50 basis points to 35.5% compared to 35.0% for the prior year fiscal year.
Inventory in comparable stores increased 3% at January 28, 2012 compared to January 29, 2011.
Advertising, Selling, Administrative and General Expenses
Advertising, selling, administrative and general expenses ("operating expenses") decreased approximately 40 basis points of sales during the 13 weeks ended January 28, 2012 compared to the 13 weeks ended January 29, 2011. Operating expenses were $440.8 million (22.4% of sales) and $441.6 million (22.8% of sales), respectively. Specific areas of operating expense savings during the fourth quarter included advertising and utilities partially offset by increased services purchased.
Operating expense decreased approximately 60 basis points of sales during the 52 weeks ended January 28, 2012 compared to the 52 weeks ended January 29, 2011. Operating expenses were $1,630.9 million (26.0% of sales) and $1,625.8 million (26.6% of sales), respectively.
Gain on Litigation Settlement
During the 13 weeks ended January 28, 2012, the Company recorded a $44.5 million pre-tax credit net of legal fees and costs ($28.7 million after tax or $0.56 per share) related to the settlement of a lawsuit with JDA Software Group for $57.0 million.
Share Repurchase
During the 13 weeks ended January 28, 2012, Dillard's repurchased approximately $98.8 million (2.1 million shares) of Class A Common Stock. The Company repurchased approximately $491.1 million (11.4 million shares) of Class A Common Stock during the 52 weeks ended January 28, 2012. At January 28, 2012, $27.5 million of authorization remained under the Company's $250 million share repurchase program.
Total shares outstanding (Class A and Class B Common Stock) at January 28, 2012 and January 29, 2011 were 49.4 million and 60.0 million, respectively.
Credit Facility
Letters of credit totaling $83.7 million were outstanding under the Company's $1.0 billion revolving credit facility as of January 28, 2012.
Store Information
At January 28, 2012, the Company operated 288 Dillard's locations and 16 clearance centers spanning 29 states and an Internet store at www.dillards.com. Total square footage at January 28, 2012 was 52.7 million.
Sales Reporting
Dillard's will no longer report monthly sales results. Sales performance information will be included in the Company's quarterly press releases. Management believes that providing sales information quarterly with operating results provides a more complete representation of the Company's performance.
Estimates for 2012
The Company is updating the following estimates for certain financial statement items for the fiscal year ending February 2, 2013 based upon current conditions. Actual results may differ significantly from these estimates as conditions and factors change - See "Forward-Looking Information".
Forward-Looking Information
The foregoing contains certain "forward-looking statements" within the definition of federal securities laws. The following are or may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995: statements including (a) words such as "may," "will," "could," "believe," "expect," "future," "potential," "anticipate," "intend," "plan," "estimate," "continue," or the negative or other variations thereof, and (b) statements regarding matters that are not historical facts. The Company cautions that forward-looking statements contained in this report are based on estimates, projections, beliefs and assumptions of management and information available to management at the time of such statements and are not guarantees of future performance. The Company disclaims any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information, or otherwise. Forward-looking statements of the Company involve risks and uncertainties and are subject to change based on various important factors. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements made by the Company and its management as a result of a number of risks, uncertainties and assumptions. Representative examples of those factors include (without limitation) general retail industry conditions and macro-economic conditions; economic and weather conditions for regions in which the Company's stores are located and the effect of these factors on the buying patterns of the Company's customers, including the effect of changes in prices and availability of oil and natural gas; the availability of consumer credit; the impact of competitive pressures in the department store industry and other retail channels including specialty, off-price, discount and Internet retailers; changes in consumer spending patterns, debt levels and their ability to meet credit obligations; changes in legislation, affecting such matters as the cost of employee benefits or credit card income; adequate and stable availability and pricing of materials, production facilities and labor from which the Company sources its merchandise; changes in operating expenses, including employee wages, commission structures and related benefits; system failures or data security breaches; possible future acquisitions of store properties from other department store operators; the continued availability of financing in amounts and at the terms necessary to support the Company's future business; fluctuations in LIBOR and other base borrowing rates; potential disruption from terrorist activity and the effect on ongoing consumer confidence; epidemic, pandemic or other public health issues; potential disruption of international trade and supply chain efficiencies; world conflict and the possible impact on consumer spending patterns and other economic and demographic changes of similar or dissimilar nature. The Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended January 29, 2011, contain other information on factors that may affect financial results or cause actual results to differ materially from forward-looking statements.
Contact:
Julie Johnson Bull
(501) 376-5965
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