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Key Takeaways
- Dillard’s missed second-quarter earnings and revenue estimates as sales slowed and costs rose.
- The department store chain said the rise in costs was driven by higher payroll expenses.
- Shares of Dillard’s tumbled Thursday following the company’s earnings release.
Dillard’s (DDS) shares sank over 10% Thursday after the department store chain reported second-quarter results that missed analysts’ estimates as inflation-weary consumers cut back on discretionary spending and the company’s costs rose.
Dillard’s posted second-quarter adjusted earnings per share (EPS) of $4.59, with revenue down 5.3% from a year ago to $1.51 billion. Both were below estimates.
Total retail sales dropped 5%, as did comparable store sales. The company said sales were weakest in men’s apparel, accessories, and shoes.
Payrolls Drive Rise in Costs
Costs jumped to $433.6 million or 29.1% of sales, up from $412.6 million or 26.3% of sales in 2023. Dillard’s said the rise was driven by higher payroll expenses.
CEO William Dillard said the company was “disappointed with our weak performance,” adding that “while the consumer environment remained challenged, our expenses were up, squeezing profitability.” Dillard said the firm is “working to address this.”
Dillard’s shares closed 10.7% lower at $348.89 Thursday, and have lost about 13.6% since the start of the year.
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