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Oppressive economic continues to hit Dillard's operations
27 Nov '08
5 min read
Operating results for the thirteen weeks ended November 1, 2008 reflect the operations of CDI Contractors, LLC, ("CDI") a former equity method joint venture investment. The Company purchased the remaining 50% interest of CDI on August 29, 2008. The operations of CDI did not have a material impact on the operating results of the Company for the thirteen weeks ended November 1, 2008. Notably, the increase in accounts receivable from $10.0 million at November 3, 2007 to $80.1 million at November 1, 2008 is primarily due to the consolidation of CDI.
Net sales for the 13 weeks ended November 1, 2008 were $1.508 billion compared to net sales for the 13 weeks ended November 3, 2007 of $1.633 billion. Total sales declined 10% during the 13-week period. Sales in comparable stores declined 9%.
During the 13 weeks ended November 1, 2008, net sales were above the Company's average performance trend in the Central region, slightly below trend in the Western region and below trend in the Eastern region. Sales of juniors' and children's apparel were significantly below trend during the period.
Gross margin declined 390 basis points of sales during the 13 weeks ended November 1, 2008 primarily as a result of increased markdowns in a notably difficult sales environment. Inventory in comparable stores declined 7% as of November 1, 2008 compared to November 3, 2007.
Dillard's is committed to conservatively managing its inventory during this difficult retail environment. Dillard's efforts to improve gross margin performance include refining the merchandise mix by reducing duplication of product among vendor lines, eliminating under-performing brands and seeking brands that resonate with the Company's customers.
Advertising, selling, administrative and general ("S G & A") expenses declined $30.3 million during the third quarter as a result of expense saving measures implemented earlier in the fiscal year. Management believes recent expense saving initiatives will provide an additional S G & A savings of approximately $70 million in 2009.
Included in S G & A expenses for the thirteen weeks ended November 1, 2008 were approximately $4.4 million ($2.8 million after tax or $.04 per share) of hurricane losses and remediation expenses related to Hurricane Ike which occurred in September of 2008. Excluding these expenses, S G and A expenses declined approximately $34.7 million. S G & A expenses were $490.7 million and $521.0 million during the 13 weeks ended November 1, 2008 and November 3, 2007, respectively.
Net interest and debt expense declined $1.1 million for the 13 weeks ended November 1, 2008 compared to the 13 weeks ended November 3, 2007 primarily due to lower borrowing rates.
Net sales for the 13 weeks ended November 1, 2008 were $1.508 billion compared to net sales for the 13 weeks ended November 3, 2007 of $1.633 billion. Total sales declined 10% during the 13-week period. Sales in comparable stores declined 9%.
During the 13 weeks ended November 1, 2008, net sales were above the Company's average performance trend in the Central region, slightly below trend in the Western region and below trend in the Eastern region. Sales of juniors' and children's apparel were significantly below trend during the period.
Gross margin declined 390 basis points of sales during the 13 weeks ended November 1, 2008 primarily as a result of increased markdowns in a notably difficult sales environment. Inventory in comparable stores declined 7% as of November 1, 2008 compared to November 3, 2007.
Dillard's is committed to conservatively managing its inventory during this difficult retail environment. Dillard's efforts to improve gross margin performance include refining the merchandise mix by reducing duplication of product among vendor lines, eliminating under-performing brands and seeking brands that resonate with the Company's customers.
Advertising, selling, administrative and general ("S G & A") expenses declined $30.3 million during the third quarter as a result of expense saving measures implemented earlier in the fiscal year. Management believes recent expense saving initiatives will provide an additional S G & A savings of approximately $70 million in 2009.
Included in S G & A expenses for the thirteen weeks ended November 1, 2008 were approximately $4.4 million ($2.8 million after tax or $.04 per share) of hurricane losses and remediation expenses related to Hurricane Ike which occurred in September of 2008. Excluding these expenses, S G and A expenses declined approximately $34.7 million. S G & A expenses were $490.7 million and $521.0 million during the 13 weeks ended November 1, 2008 and November 3, 2007, respectively.
Net interest and debt expense declined $1.1 million for the 13 weeks ended November 1, 2008 compared to the 13 weeks ended November 3, 2007 primarily due to lower borrowing rates.
Dillard's Inc
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