Exhibit 99.1
Dillard's Reports Third Quarter Results and
Repurchase of $111.6 Million of Class A Common Stock
Announces New Share Repurchase Plan
LITTLE ROCK, Ark.--(BUSINESS WIRE)--Nov. 19, 2007--Dillard's, Inc.
(NYSE: DDS) (the "Company" or "Dillard's") announced operating results
for the 13 weeks ended November 3, 2007. 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 loss for the 13 weeks ended November 3, 2007 was $11.3 million
($0.15 per share) compared to net income of $13.6 million ($0.17 per
share) for the 13 weeks ended October 28, 2006. Dillard's attributes
the disappointing third quarter operating performance to declines in
sales and gross margin rates during the period. Included in net loss
for the 13 weeks ended November 3, 2007 is a pretax gain of $11.1
million ($7.0 million after tax or $0.09 per share) related to
hurricane recovery regarding a store damaged by Hurricane Rita in
2005. The Company completed the cleanup of the damaged location during
the third quarter. Also included in the thirteen weeks ended November
3, 2007 are pretax asset impairment and store closing charges of $3.7
million ($2.3 after tax or $0.03 per share).
Dillard's announces its repurchase of $111.6 million of its Class
A Common Stock during the thirteen weeks ended November 3, 2007,
completing the repurchase activity authorized under its $200 million
share repurchase program approved by the board of directors in May of
2005. Additionally, Dillard's announces that the board of directors
has authorized a new share repurchase plan under which the Company may
repurchase up to $200 million of its Class A Common Stock. The new
open-ended authorization permits the Company to repurchase its Class A
Common Stock in the open market or through privately negotiated
transactions.
Dillard's Chief Executive Officer, William Dillard, II, stated,
"Our third quarter performance was clearly disappointing as we did not
accomplish the level of sales and gross margin necessary to achieve
profitability. We remain committed to positive changes as we continue
to improve and edit merchandise assortments to strengthen our appeal
to both new and existing Dillard's customers."
Sales
Net sales for the 13 weeks ended November 3, 2007 were $1.633
billion compared to sales for the 13 weeks ended October 28, 2006 of
$1.719 billion. Total net sales declined 5% during the 13-week period.
Sales in comparable stores declined 6%.
During the 13 weeks ended November 3, 2007, net sales in the
Central region were slightly better than the Company's total
performance for the period. Sales were slightly below trend in the
Eastern and Western regions. Sales in the juniors' and children's
apparel category and the home and other category declined
significantly more than trend during the period.
Cost of Sales - Gross Margin
Cost of sales as a percentage of sales increased to 65.5% during
the 13 weeks ended November 3, 2007 compared to 65.0% for the 13 weeks
ended October 28, 2006. The gross margin decline of 50 basis points of
sales was primarily driven by higher markdowns. By merchandise
category, Dillard's achieved gross margin improvement in shoes and
men's apparel and accessories during the third quarter. The gross
margin declines in the juniors' and children's apparel category, the
ladies' apparel and accessories category and the home and other
category exceeded the Company's average decline for the period.
Comparable store inventory at November 3, 2007 declined 2%
compared to October 28, 2006.
Advertising, Selling, Administrative and General Expenses
Advertising, selling, administrative and general ("S G & A")
expenses were $521 million and $513.2 million during the 13 weeks
ended November 3, 2007 and October 28, 2006, respectively. Increases
in payroll, services purchased and pre-opening expenses were partially
offset by declines in advertising expense.
Interest and Debt Expense
Interest and debt expense was $23.1 million and $23.4 million
during the 13 weeks ended November 3, 2007 and October 28, 2006,
respectively. As of November 3, 2007, short term borrowings of $340
million and letters of credit totaling $73.9 million were outstanding
under the Company's $1.2 billion revolving credit facility.
Share Repurchase Program
During the 13 weeks ended November 3, 2007, Dillard's repurchased
$111.6 million (5.2 million shares) of the Company's Class A Common
Stock, completing the repurchase activity authorized under its $200
million share repurchase program in May of 2005. Additionally,
Dillard's announces that the board of directors has authorized a new
share repurchase plan under which the Company may repurchase up to
$200 million of its Class A Common Stock. The new open-ended
authorization permits the Company to repurchase its Class A Common
Stock in the open market or through privately negotiated transactions.
Store Information
As previously, announced, Dillard's opened the following locations
during the third quarter of 2007:
Store City Sq. Feet Month Opened
- ------------------------ --------------------- ---------- ------------
Stonebriar Centre Frisco, Texas 200,000 September
- ------------------------ --------------------- ---------- ------------
Ashley Park Newnan, Georgia 155,000 September
- ------------------------ --------------------- ---------- ------------
Hill Country Galleria West Austin, Texas 145,000 September
- ------------------------ --------------------- ---------- ------------
Fallen Timbers Toledo, Ohio 155,000 October
- ------------------------ --------------------- ---------- ------------
Santan Village Gilbert, Arizona 155,000 October
- ------------------------ --------------------- ---------- ------------
Promenade at Casa Grande Casa Grande, Arizona 98,000 October
- ------------------------ --------------------- ---------- ------------
During the third quarter of 2007, The Company closed its Southwest
Center location in Dallas, Texas (160,000 square feet) along with
three previously announced closures in Elyria, Ohio, Tulsa, Oklahoma
and St. Louis, Missouri. Earlier this month, the Company closed its
Southwyck Mall location in Toledo, Ohio (180,000 square feet).
Dillard's has announced the closure of the following four locations
which are expected to close by the end of the fiscal year:
Store City Sq. Feet
- ------------------------------- --------------------------- ----------
Bellevue Mall Nashville, Tennessee 170,000
- ------------------------------- --------------------------- ----------
National Hills Shopping Center Augusta, Georgia 115,000
- ------------------------------- --------------------------- ----------
Tallahassee Mall Tallahassee, Florida 170,000
- ------------------------------- --------------------------- ----------
Ashtabula Mall Ashtabula, Ohio 70,000
- ------------------------------- --------------------------- ----------
During the fiscal year 2007 to date, Dillard's has closed or has
announced the closure of 11 locations, including one replacement
store, under the Company's plan to close under-performing locations
where practicable. As of November 3, 2007, the Company operated 331
Dillard's locations spanning 29 states.
Dillard's, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(In Millions, Except Per Share Data)
13-Week Period Ended
---------------------------------------
November 3, 2007 October 28, 2006
------------------- -------------------
% of % of
Amount Net Sales Amount Net Sales
--------- --------- --------- ---------
Net sales $1,633.4 - $1,719.3 -
Total revenues 1,674.2 102.5 % 1,759.3 102.3%
Cost of sales 1,070.7 65.5 1,118.3 65.0
Advertising, selling,
administrative and general
expenses 521.0 31.9 513.2 29.8
Depreciation and amortization 75.0 4.6 73.6 4.3
Rentals 13.9 0.9 12.8 0.8
Interest and debt expense, net 23.1 1.4 23.4 1.4
Gain on disposal of assets (11.7) -0.7 (1.1) (0.1)
Asset impairment and store
closing charges 3.7 0.2 - -
--------- -------- --------- ---------
(Loss) income before income
taxes and equity in earnings
of joint ventures (21.5) (1.3) 19.1 1.1
Income taxes (benefit) (6.8) 7.7
Equity in earnings of joint
ventures 3.4 0.2 2.2 0.1
--------- -------- --------- ---------
Net (Loss) Income $ (11.3) (0.7)% $ 13.6 0.8%
========= ======== ========= =========
(Loss) earnings per share $ (0.15) $ 0.17
========= =========
Basic weighted average shares 77.9 79.6
========= =========
Diluted weighted average
shares 77.9 80.9
========= =========
Dillard's, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(In Millions, Except Per Share Data)
39-Week Period Ended
---------------------------------------
November 3, 2007 October 28, 2006
---------------------------------------
% of % of
Amount Net Sales Amount Net Sales
--------- --------- --------- ---------
Net sales $5,044.9 - $5,240.1 -
Total revenues 5,162.7 102.3% 5,369.4 102.5%
Cost of sales 3,325.4 65.9 3,420.0 65.3
Advertising, selling,
administrative and general
expenses 1,516.2 30.1 1,518.4 29.0
Depreciation and amortization 224.8 4.4 221.0 4.2
Rentals 40.7 0.8 36.0 0.7
Interest and debt expense, net 66.6 1.3 71.6 1.4
Gain on disposal of assets (12.3) (0.2) (16.4) (0.3)
Asset impairment and store
closing charges 4.4 0.1 - -
--------- --------- --------- ---------
Income before income taxes and
equity in earnings of joint
ventures (3.1) (0.1) 118.8 2.2
Income tax expense 1.2 32.5
Equity in earnings of joint
ventures 10.7 0.2 4.4 0.1
--------- --------- --------- ---------
Net Income $ 6.4 0.1% $ 90.7 1.7%
========= ========= ========= =========
(Loss) earnings per share -
basic $ 0.08 $ 1.14
========= =========
(Loss) earnings per share -
diluted $ 0.08 $ 1.13
========= =========
Basic weighted average shares 79.5 79.5
========= =========
Diluted weighted average
shares 80.4 80.2
========= =========
Dillard's, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In Millions)
November 3, October 28,
2007 2006
----------- -----------
Assets
Current Assets:
Cash and cash equivalents $ 73.0 $ 95.0
Trade accounts receivable 10.0 10.7
Merchandise inventories 2,363.2 2,392.6
Other current assets 59.9 40.4
----------- -----------
Total current assets 2,506.1 2,538.7
Property and equipment, net 3,276.8 3,190.7
Goodwill 31.9 34.5
Other assets 169.8 170.1
----------- -----------
Total Assets $5,984.6 $5,934.0
=========== ===========
Liabilities and Stockholders' Equity
Current Liabilities:
Trade accounts payable and accrued expenses $1.309.8 $1,373.4
Other short-term borrowings 340.0 -
Current portion of long-term debt and
capital leases 99.3 205.0
Federal and state income taxes including
current deferred taxes 5.5 19.3
----------- -----------
Total current liabilities 1,754.6 1,597.7
Long-term debt and capital leases 886.6 985.8
Other liabilities 223.2 251.1
Deferred income taxes 440.8 467.4
Guaranteed preferred beneficial interests in
the Company's subordinated debentures 200.0 200.0
Stockholders' equity 2,479.4 2,432.0
----------- -----------
Total Liabilities and Stockholders' Equity $5,984.6 $5,934.0
=========== ===========
Other Information
(In Millions)
November 3, October 28,
2007 2006
----------- -----------
Square footage 57.1 56.8
=========== ===========
Capital expenditures
13 weeks ended $ 102.4 $ 83.7
39 weeks ended 339.0 253.4
Estimates for 2007
The Company is updating the following estimates for certain income
statement items for the fiscal year ending February 2, 2008 based upon
current conditions. Actual results may differ significantly from these
estimates as conditions and factors change - See "Forward-Looking
Information".
In Millions
--------------------
2007 2006
Estimated Actual
---------- ---------
Depreciation and amortization $ 300 $ 301
Rental expense 60 55
Interest and debt expense, net 91 88
Capital expenditures 410 321
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 store opening and closing information
and estimates for 2007 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.
Julie J. Bull, 501-376-5965