Dillard's October Sales Slip - Analyst Blog

Fashion apparel and home furnishing retailer Dillard's Inc.'s (DDS) comparable-stores sales dropped 1% for the four weeks ended October 30, 2010. Net sales for the same period also fell 2% year over year to $356.1 million.

October comparable-store sales results showed an improvement from the 8% decline in a year-ago period. For the four weeks ended October 30, 2010, the company highlighted that stores in the eastern region performed relatively better than average.

However, central and western stores were below the average trend. Junior's and children's clothing sales were strong, while home merchandise and furniture were disappointing.

Year-to-date, sales increased marginally to $4,105.7 million from the year-earlier level of $4,095.4 million. Comparable-store stores increased 1% for the 39-week period. Moreover, quarter-to-date sales increased to $1,315.2 million from $1,312.0 million in the year-ago period and comparable-stores sales grew 1% for the 13-week period.

In the second quarter 2010, Dillard's reported net sales of $1,389 million compared with $1,428 million in the prior-year quarter. The comparable-store inventory declined 6%, while comparable-store sales remained unchanged on a percentage basis for the 13-week period ended July 31, 2010.

Dillard's Inc. is a large departmental store chain, featuring fashion apparel and home furnishings. Although Dillard's is a large regional departmental store, it faces competition at national and local levels from peers such as Kohl's Corp. (KSS) (October same-store sales slipped 2.5%), Macy's Inc. (M) (October same-store sales up 2.5%) and J. C. Penney Company Inc. (JCP) (October same-store sales down 1.9%).

Dillard's expects to report its third-quarter 2010 financial results on November 15. With an expectation that Dillard's will perform well above its peers in the coming quarters, we maintain our Outperform rating on the stock.