Exhibit 99.1
Dillard's, Inc. Reports First Quarter Results
LITTLE ROCK, Ark.--(BUSINESS WIRE)--May 24, 2005--Dillard's, Inc.
(NYSE:DDS) (the "Company" or "Dillard's") today announced operating
results for its thirteen weeks ended April 30, 2005. This release
contains certain forward-looking statements. Please refer to the
Company's cautionary statement regarding forward-looking information
included below under "Forward-Looking Information".
Net income for the 13 weeks ended April 30, 2005 was $38.0 million
($0.46 per diluted share) compared to net income of $53.8 million
($0.64 per diluted share) for the 13 weeks ended May 1, 2004. Included
in net income for the 13 weeks ended April 30, 2005 and May 1, 2004,
respectively, were pretax impairment and store closing charges of $0.4
million ($0.3 million after-tax or $0.00 per diluted share) and $4.7
million ($3.0 million after-tax or $0.04 per share).
Revenues
Net sales for the 13 weeks ended April 30, 2005 were $1.803
billion compared to sales for the 13 weeks ended May 1, 2004 of $1.854
billion. Net sales decreased 3% for the thirteen-week period on both a
total and comparable store basis.
During the 13 weeks ended April 30, 2005, net sales in the
Company's Eastern and Western regions were above trend, exceeding the
Company's average sales performance for the period. Net sales were
slightly below trend in the Central region. Net sales of lingerie,
accessories and shoes significantly exceeded the Company's average
sales trend, while performance of women's apparel and furniture was
significantly below trend.
Gross Margin/Merchandise Initiatives
Gross margin for the 13 weeks ended April 30, 2005 declined 90
basis points as a percentage of sales. The decline was driven by
higher levels of markdowns. Increased markdown activity was necessary
during the quarter as the Company monitored and responded to lower
than expected sales performance as it maintained acceptable inventory
levels. Inventory increased primarily due to an increase relating to
inventory in transit.
Dillard's continues to execute key merchandise initiatives as it
works to maintain relationships with existing loyal customers while
attracting new customers with expanded offerings in upscale and
contemporary fashions. The Company will continue to use existing
technology and research to edit its assortments by store to meet the
specific preference, taste and size requirements of the local area.
Advertising, Selling, Administrative and General Expenses
Advertising, selling, administrative and general ("SG&A") expenses
declined $12.5 million to $497.3 million for the 13 weeks ended April
30, 2005 compared to $509.8 million for the prior year first quarter.
Savings were driven primarily by decreases in bad debt expense,
payroll and communication costs as a result of the Company's sale of
its credit card business in November of 2004.
Debt/Interest Expense
Interest and debt expense declined $11.8 million during the 13
weeks ended April 30, 2005 as a result of lower debt levels. Interest
and debt expense declined to $26.2 million compared to $38.0 million
for the thirteen weeks ended May 1, 2004.
At April 30, 2005, the Company had $1.62 billion total long-term
debt outstanding compared with $2.2 billion at May 1, 2004 (including
Guaranteed Preferred Beneficial Interests in the Company's
Subordinated Debentures). At April 30, 2005, letters of credit
totaling $64.4 million were outstanding under the Company's $1 billion
revolving credit facility.
Approximately $16 million in share repurchase authorization
remained at April 30, 2005 under the Company's $200 million share
repurchase program. At April 30, 2005, the Company had 83.3 million
shares of its Class A and Class B Common Stock outstanding.
Store Openings/Closings
During the 13 weeks ended April 30, 2005, the Company opened the
following stores as scheduled:
Center City Square Feet Month
- ----------------------------------------------------------------------
St. Johns Town Center Jacksonville, FL 240,000 March
Imperial Valley Mall El Centro, CA 140,000 March
Crestview Hills Town Center(a) Crestview Hills, KY 200,000 March
Perimeter Mall Atlanta, GA 260,000 March
(a) Replacement store.
During the 13 weeks ended April 30, 2005, the Company completed
the closure of four stores in the following locations, consistent with
its plan to close under-performing units.
Center City Square Feet Month
- ----------------------------------------------------------------------
Westgate Shopping Center Cleveland, OH 362,000 April
Harding Mall Nashville, TN 100,000 April
Harper's Station Home Store Cincinnati, OH 50,000 April
River Falls Mall Clarksville, IN 188,000 March
The Company will continue to focus on closing under-performing
locations as appropriate. At April 30, 2005, the Company operated 329
Dillard's locations spanning 29 states.
Dillard's, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In Millions, Except Per Share Data)
13-Week Period Ended
----------------------------------
April 30, 2005 May 1, 2004
---------------- -----------------
% of % of
Amount Net Amount Net
Sales Sales
--------- ------ ---------- ------
Net sales $1,803.0 - $1,854.4 -
Total revenues 1,838.7 102.0% 1,911.9 103.1%
Cost of sales 1,170.3 64.9 1,187.5 64.0
Advertising, selling, administrative
and general expenses 497.3 27.6 509.8 27.5
Depreciation and amortization 74.6 4.1 74.2 4.0
Rentals 10.5 0.6 13.7 0.7
Interest and debt expense 26.2 1.5 38.0 2.1
Asset impairment and store
closing charges 0.4 0.0 4.7 0.3
--------- ---------
Total costs and expenses 1,779.3 1,827.9
--------- ---------
Income before income taxes 59.4 3.3 84.0 4.5
Income taxes 21.4 30.2
--------- ------ --------- ------
Net Income $38.0 2.1% $53.8 2.9%
========= ====== ========= ======
Basic income per share $0.46 $0.64
========= =========
Diluted income per share $0.46 $0.64
========= =========
Basic weighted average shares 83.2 83.5
========= =========
Diluted weighted average shares 83.5 83.9
========= =========
Dillard's, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In Millions)
April 30, May 1,
2005 2004
--------- ---------
Assets
Current Assets:
Cash and cash equivalents $ 455.5 $ 67.1
Trade accounts receivable 9.0 1,092.7
Merchandise inventories 2,073.8 1,969.5
Other current assets 40.6 26.3
--------- ---------
Total current assets 2,578.9 3,155.6
Property and equipment, net 3,202.7 3,161.8
Goodwill 35.5 36.7
Other assets 184.6 156.1
--------- ---------
Total Assets $6,001.7 $6,510.2
========= =========
Liabilities and Stockholders' Equity
Current Liabilities:
Trade accounts payable and accrued expenses $1,156.6 $1,084.0
Current portion of long-term debt and capital
leases 96.3 167.9
Federal and state income taxes 93.9 141.9
--------- ---------
Total current liabilities 1,346.8 1,393.8
Long-term debt and capital leases 1,326.3 1,869.2
Other liabilities 270.3 147.5
Deferred income taxes 498.0 611.9
Guaranteed preferred beneficial interests in the
Company's subordinated debentures 200.0 200.0
Stockholders' equity 2,360.3 2,287.8
--------- ---------
Total Liabilities and Stockholders' Equity $6,001.7 $6,510.2
========= =========
Other Financial Information
(In Millions)
April 30, May 1,
2005 2004
--------- ---------
Square footage 56.1 56.2
========= =========
Capital expenditures:
13 weeks ended $ 101.5 $ 42.8
Estimates for 2005
The Company is updating the following estimates for certain income
statement items for the fiscal year ended January 28, 2006 based upon
current conditions. Actual results may differ significantly from these
estimates as conditions and factors change - See "Forward-Looking
Information".
In Millions
------------------
2005 2004
Estimated Actual
------------------
Depreciation and amortization $310 $302
Rental expense 48 55
Interest and debt expense 105 139
Capital expenditures 335 285
Forward-Looking Information
The foregoing contains certain "forward-looking statements" within
the definition of federal securities laws. Statements made in this
release regarding the Company's execution of merchandise initiatives
and estimates for 2005 are forward-looking statements. The Company
cautions that forward-looking statements, as such term is defined in
the Private Securities Litigation Reform Act of 1995, contained in
this report are based on estimates, projections, beliefs and
assumptions of management at the time of such statements and are not
guarantees of future performance. The Company disclaims any obligation
to update or revise any forward-looking statements based on the
occurrence of future events, the receipt of new information, or
otherwise. Forward-looking statements of the Company involve risks and
uncertainties and are subject to change based on various important
factors. Actual future performance, outcomes and results may differ
materially from those expressed in forward-looking statements made by
the Company and its management as a result of a number of risks,
uncertainties and assumptions. Representative examples of those
factors (without limitation) include general retail industry
conditions and macro-economic conditions; economic and weather
conditions for regions in which the Company's stores are located and
the effect of these factors on the buying patterns of the Company's
customers; the impact of competitive pressures in the department store
industry and other retail channels including specialty, off-price,
discount, internet, and mail-order retailers; changes in consumer
spending patterns and debt levels; adequate and stable availability of
materials and production facilities from which the Company sources its
merchandise; changes in operating expenses, including employee wages,
commission structures and related benefits; possible future
acquisitions of store properties from other department store operators
and the continued availability of financing in amounts and at the
terms necessary to support the Company's future business; potential
disruption from terrorist activity and the effect on ongoing consumer
confidence; potential disruption of international trade and supply
chain efficiencies; events causing disruption or delays in the store
construction schedule, world conflict and the possible impact on
consumer spending patterns and other economic and demographic changes
of similar or dissimilar nature.
CONTACT: Dillard's Inc., Little Rock
Julie J. Bull, 501-376-5965