Dillard's(US:DDS)2020-09-04 21:09Financial Performance - Total net sales for the three months ended August 1, 2020, were $919.0 million, a decrease of 35% compared to $1,426.9 million for the same period in 2019[86]. - The company reported a net loss of $8.6 million ($0.37 per share) for the three months ended August 1, 2020, compared to a net loss of $40.7 million ($1.59 per share) for the same period in 2019[86]. - Net sales from the retail operations segment decreased by 35.2% to $1,644.2 million for the six months ended August 1, 2020, compared to $2,798.7 million for the same period in 2019[114]. - Total net sales decreased by $1,186.6 million or 41.0% to $1,705.7 million for the six months ended August 1, 2020, compared to $2,892.3 million for the same period in 2019[114]. - Gross profit from retail operations decreased by $558.1 million or 59.9% to $373.4 million for the six months ended August 1, 2020, compared to $931.5 million for the same period in 2019[120]. Expenses and Cost Management - Selling, general and administrative expenses decreased to $267.1 million from $409.1 million in the prior year, primarily due to reduced payroll expenses[86]. - SG&A expenses decreased by $256.8 million or 31.5% to $557.5 million for the six months ended August 1, 2020, compared to $814.3 million for the same period in 2019[127]. - Payroll expense declined by 38% to $324.4 million for the six months ended August 1, 2020, down from $520.2 million for the same period in 2019[129]. - Total depreciation and amortization decreased by $4.9 million (4.6%) during the six months ended August 1, 2020, compared to the same period in 2019[130]. - Net interest and debt expense increased by $1.7 million (7.1%) during the six months ended August 1, 2020, compared to the same period in 2019, primarily due to increased short-term borrowings[131]. Inventory and Purchases - The company reduced inventory by 20% compared to the prior year second quarter by cutting purchases by 62%[86]. - The Company reduced merchandise purchases by 33% and 62% during the first and second quarters of 2020, respectively[140]. Cash Flow and Liquidity - Cash flows used in operating activities were $294.5 million for the six months ended August 1, 2020[90]. - Net cash flows from operations decreased by $275.9 million during the six months ended August 1, 2020, compared to the same period in 2019, due to significant decreases in net income and changes in working capital[138]. - As of August 1, 2020, the Company had cash on hand of $82.9 million and outstanding borrowings of $229.6 million under the amended credit agreement[147][150]. - The Company plans to finance its operations in fiscal 2020 through cash on hand, cash flows from operations, and utilization of its credit facility[153]. Store Operations - The company maintained 282 retail stores, including 31 clearance centers, as of August 1, 2020[91]. - Storewide sales penetration of exclusive brand merchandise was 20.8% for the six months ended August 1, 2020, compared to 21.2% for the same period in 2019[115]. Future Outlook and Risks - The company expects to be in a net operating loss position for fiscal year 2020, with a net tax benefit of $17.4 million included in the net loss for the quarter[87]. - The Company experienced a significant negative impact on liquidity and net sales due to the COVID-19 pandemic, with ongoing uncertainty affecting customer demand and profitability[152]. - The Company cautions that forward-looking statements are subject to risks and uncertainties, including the ongoing effects of the COVID-19 pandemic[159]. Shareholder Actions - The Company repurchased 1.6 million shares of Class A Common Stock at an average price of $47.99 per share for a total of $76.1 million during the six months ended August 1, 2020[151]. - As of August 1, 2020, $192.6 million of authorization remained under the March 2018 share repurchase plan[151]. Other Financial Information - The company has an amended $800 million revolving credit facility with no financial covenants as long as availability exceeds $100 million[94]. - There have been no material changes in the Company's contractual obligations and commercial commitments since the last annual report[154]. - The Company has not engaged in any off-balance-sheet arrangements that could materially affect its financial condition[156]. - The Company has not reported any material changes in market risk disclosures since the last annual report[160].