US: Dillard’s swings to Q4 loss on store closing costs
Aggressive cost cutting at Dillard's was unable to offset "significant declines" in sales and gross margin, pushing the department store retailer to a fourth quarter loss.
Net loss for the three weeks to 31 January was $149.3m or $2.03 per share, and compares with a profit of $47.3m or $0.63 per share, posted in the same period a year earlier.
This year's results include asset impairment and store closing charges of $123.9m after tax or $1.69 per share, the Little Rock, Arkansas based company said in a statement yesterday (5 March).
In December it announced plans to cut around 500 jobs - or 0.8% of its workforce - as part of its ongoing efforts to reduce operating expenses.
CEO William Dillard II said: "Our extensive cost reduction measures resulted in a $67.3 million savings but were not enough to offset the significant declines in sales and gross margin that we experienced during the quarter."
Quarterly sales fell 5.7% to $2.039bn from $2.163bn. Total merchandise sales were down 9% and merchandise sales in comparable stores dropped 8%.
Gross margin from retail operations fell by 7.1% of sales, as a result of higher markdown activity. However, inventory levels were down 23% year over year.
For the full year, net loss was $241.1m or $3.25 per share, compared with a net income of $53.8m or $0.68 per share, the year before.
Annual revenues were down 5.6% to $6.8bn from $7.2bn, with total merchandise sales dropping 6% and merchandise sales in comparable stores falling 7%.
The retailer, which operates 306 Dillard's stores and 9 clearance centres, is cutting its capital expenditures by 36% during 2009 to $120m, down from $188m in 2008. No store openings are planned for the year.
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