Dillard’s said it was disappointed with its bottom line performance as the department store retailer posted declining profits and weaker margins amid increased discounting.
In the 13 weeks to August 2, net income amounted to $34.5 million. This compared to earnings of $36.5 million a year earlier.
Gross margin declined 20 basis points on the prior year second quarter, primarily as a result of increased markdowns.
Net sales in the period fell slightly to $1.47 billion from $1.48 billion in the prior year period, while comparable stores sales increased 1% for the quarter.
Sales trends were strongest in juniors’ and children’s apparel followed by men’s apparel and accessories. Geographically, trends were strongest in the Central region, followed by the Eastern and Western regions, respectively.
“Although our 1% comparable store sales increase led to a profitable quarter, we are somewhat disappointed in the bottom line performance,” said CEO William Dillard. “We are pleased with our inventory management during the quarter and with our ending inventory position.”
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