It’s not exactly news that quarterly earnings of department stores are poor, but the numbers are stark in the Dillard’s quarterly report filed today for the period ending May 2.
For a time, all 285 stores in the Little Rock-based chain were closed.
45 opened May 5.
80 more opened May 12, but all are operating on reduced hours.
It hopes to have 241 stores and 29 clearance centers open by next week.
At the peak of closures, 90 percent of 38,000 workers were furloughed.
About 65,000 are still furloughed.
In early April, CEO William Dillard II stopped drawing a salary. (His base salary is about $1 million, but total compensation last year was more than $2 million.)
All salaried workers got a 20 percent pay cut on April 17. It is expected to last at least through May 30.
Steps the company has taken to cope with plunging income:
Extended vendor payment terms
▪ Canceled, suspended and significantly delayed merchandise shipments
▪ Reduced merchandise purchases during the quarter by 33%
▪ Reviewed and reduced discretionary operating and capital expenditures ▪ Reduced payroll expense as described above
▪ Affected extraordinary measures to clear inventory
Key financial stats:
• Total retail sales decreased 47%. The Company reported no comparable store sales data for the quarter due to the temporary closure of its brick-and-mortar stores as well as the interdependence between in-store and online sales.
• Net loss of $162.0 million compared to net income of $78.6 million for the prior year first quarter
• Net loss of $6.94 per share compared to net income of $2.99 per share
• Retail gross margin of 12.8% compared to 37.8% • Inventory decreased 14%
• Selling, general and administrative expenses were $290.4 million compared to $405.1 million • Share repurchases of $61.8 million during the quarter
But…..the company said its balance sheet is strong. It has low debt and liquidity.
A prepared statement from the CEO:
COVID-19 has impacted every aspect of our business. The mall business in general and department stores, specifically, have been particularly hard hit. While our balance sheet was already strong, we took decisive, sometimes difficult, actions to preserve liquidity and ensure our long-term viability. As we re-open stores, we see positive things happening. We believe people are ready to get out and shop. We are hoping this is the start of better times.
Here’s the Dillard SEC filing.