Dillard's Profit Surges
March 12, 2007,
Helped by a big $64 million tax credit, and putting behind $55 million in charges that cut income a year ago, Dillard's pushed fourth-quarter profits up by 57.4%, to $155.0 million from $98.5 million last year.
Sales improved by 2.6%, to $2.4 billion from $2.3 billion during the Christmas quarter, but same-store sales fell by 4.0%.
Average gross margin contracted modestly, while costs edged higher. Margins thinned by 80 basis points, to 32.8% from 33.6%, solely because last year's quarter included a hurricane recovery gain. Excluding that one item, margins actually improved by 40 basis points. Operating costs rose by 50 basis points, or half a percentage point, due to extra costs associated with the extra week in this year's 14-week fiscal quarter. Inventory was reduced by 1.7%, even as sales climbed higher by 2.6%.
|Qtr. 2/3 (x000)||2006||2005||% change|
|a. Fourth quarter results include an after-tax interest credit of $6.6 million; and an income tax benefit of $64.0 million. Prior-year results include a $55.3 pre-tax million asset impairment charge.
b. 12-month results include the $6.6 million after-tax interest credit; the $64.0 million tax credit; an $8.5 million after-tax gain on the sale of its interest in a mall; a $4.5 million after-tax gain form the Visa settlement; a $13.6 million charge stemming from litigation; a $5.8 million gain stemming from a change in a capital loss valuation allowance; and a $6.5 million gain due to the release of tax reserves. Prior-year results include a $61.7 million pre-tax impairment charge; a $29.7 million pre-tax hurricane recovery gain; and a $35.1 million tax benefit due to the sale of a subsidiary.
|Oper. Income (EBIT)||269,300||274,500||-1.9|
|Per share (diluted)||1.90||1.24||53.2|
|Average gross margin||32.8%||33.6%||—|
|Oper. Income (EBIT)||721,000||652,500||10.5|
|Per share (diluted)||3.05||1,49||104.7|
|Average gross margin||34.2%||33.7%||—|