Dillard’s slumps to US$56m Q3 loss

US: Dillard’s slumps to US$56m Q3 loss

Author: just-style.com | 27 November 2008

Falling sales and one-off charges sent department store chain Dillard's spiralling to a US$56m loss in the third quarter, despite a range of cost-saving measures.

The company incurred $6m in charges related to asset impairment and store closures, plus $2.8m in hurricane-related expenses.

In last year's third quarter, it posted a net loss of $11.3m, including a hurricane recovery-related gain of $7m and $2.3m in asset impairment and store closure charges.

Net sales fell 10% to $1.508bn, while comparable store sales declined 9%.

Gross margin declined by 390 basis points, thanks to increased markdowns.

"The oppressive economic environment clearly weighed heavily on our results during the third quarter," said CEO William Dillard II.

"We continue to take aggressive action to navigate these challenging times."

Dillard's has already closed 21 under-performing stores in 2008, dramatically reducing capital spending and cutting expenses.

"These efforts are not only designed to position ourselves to weather near-term economic uncertainty, but also to position Dillard's well for the long term," said Dillard.

The company expects to make about $100m in cost savings and recently announced the axing of 500 jobs, or about 8% of its workforce, in an effort to reduce expenses.

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