Dillard’s at the Park Plaza Mall in Little Rock.
Karen E. Segrave)
Dillard’s Inc. saw its retail sales tumble 35% in the second quarter as the coronavirus pandemic forced the closure of its 285 stores. They had reopened by June 2 but operate under reduced hours, the company said Thursday.
After market close, the Little Rock-based department store chain reported a net loss of $8.6 million, or 37 cents per share, for the quarter that ended Aug. 1, compared with a net loss of $40.7 million, or $1.59 per share, in the same period last year.
Dillard’s still beat Wall Street’s expectations. Analysts surveyed by Thomson Reuters on average had estimated a loss of $4.54 per share for the quarter.
The net loss includes a net tax benefit related to the Coronavirus Aid, Relief, and Economic Security Act, which was signed into law on March 27.[CORONAVIRUS: Click here for our complete coverage » arkansasonline.com/coronavirus]
The company said in its report that it expects to operate at a net loss for the fiscal year. It did not report same-store sales data for the quarter because of the temporary closure of its stores and “the interdependence between in-store and online sales.”
Revenue fell 36% from last year to $919 million. Net sales include operations at the company’s construction business, CDI Contractors LLC.
“During the quarter, we worked hard to control inventory and expenses,” William T. Dillard II, the company’s chief executive officer, said in the report. “These measures allowed us to improve gross margin and substantially narrow the loss from the prior year second quarter.”
“We will maintain this conservative financial approach as we move forward,” Dillard said.[RELATED » Interactive: Economic impacts of covid-19 » arkansasonline.com/economy/]
This has been a hard year for retailers and department stores in general, with the pandemic keeping shoppers at home and high unemployment erasing disposable income. These factors pushed companies that had already been struggling for several years over the edge.
So far this year, more than 40 retailers have filed for bankruptcy protection, including such venerable chains as J.C. Penney, Lord & Taylor and Neiman Marcus, according to industry news publication Chain Store Age. Seventeen retailers declared bankruptcy in all of 2019, according to Retail Dive’s bankruptcy tracker.
Off-price chain Stein Mart Inc. is the latest retailer to fall victim to the pandemic. The company said Wednesday that it is seeking Chapter 11 protection and plans to eventually close its 280 stores.
Ken Perkins, president of research firm Retail Metrics LLC, said in a note Wednesday that the first half of 2020 “has been a nightmare for ‘non-essential’ retailers.” On top of already dwindling sales and decreased foot traffic, state and local mandates forced many stores to close for roughly six weeks.
The closures limited retailers to online sales and curbside pickup, while stores staying open faced increased operating costs from protective measures such as increased sanitation, Perkins said.
Dillard’s shares closed Thursday at $27.06, up 21 cents, or 0.78%, on the New York Stock Exchange. Its shares have traded between $21.50 and $84.47 in the past year.
Graphs showing Dillard’s Inc. second quarter information.