Dillard's plans to close under-performing stores
May '08
Net income for the 13 weeks ended May 3, 2008 was $2.7 million ($0.04 per diluted share) compared to net income of $42.9 million ($0.53 per diluted share) for the 13 weeks ended May 5, 2007. Included in net income for the 13 weeks ended May 3, 2008 are asset impairment and store closing charges of $0.9 million ($0.6 million after tax or $0.01 per share).
Included in net income for the 13 weeks ended May 5, 2007 is a pretax $4.1 million hurricane recovery gain ($2.6 million after tax or $0.03 per diluted share) and asset impairment and store closings charges of $0.7 million ($0.4 million after tax or $0.01 per share).
Dillard's Chief Executive Officer, William T. Dillard, II, stated, "Our first quarter performance was certainly disappointing. The weak economic conditions, particularly in Florida, made it extremely difficult to achieve profitable sales levels. The detrimental effect on our gross margin performance was dramatic as we worked to control inventory position.
We will continue to run our business conservatively to navigate the near-term economic uncertainty." Specifically, Dillard's has announced plans to close under-performing stores, reduce capital expenditures, reduce expenses and continue to change its merchandise mix to strengthen its appeal to aspirational, upscale and contemporary shoppers.
Accordingly, during the quarter, the Company cutadvertising, selling, administrative and general expenses ("S G & A") by $17.8 million and announced six more store closures for 2008. Management believes expense saving measures implemented in the first quarter could result in savings of approximately $50 million for the 2008 fiscal year. Dillard's will continue to evaluate its store base for additional closures and will seek additional expense saving measures throughout the year.
Revenues:
Net sales for the 13 weeks ended May 3, 2008 were $1.676 billion compared to sales for the 13 weeks ended May 5, 2007 of $1.763 billion. Total net sales declined 5% during the 13-week period. Sales in comparable stores declined 6%.
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