Dillard's Q1 Earnings Preview: What Mixed Trends Mean for Investors?

Core Viewpoint - Dillard's, Inc. is anticipated to report year-over-year declines in both revenue and earnings for the first quarter of fiscal 2025, with revenues expected at $1.54 billion, reflecting a 0.6% decrease, and earnings estimated at $9.10 per share, indicating a 17.9% decline from the previous year [1]. Financial Performance - The Zacks Consensus Estimate for Dillard's first-quarter revenues is $1.54 billion, down 0.6% from the prior year [1]. - The consensus estimate for earnings per share is $9.10, which represents a 17.9% decrease compared to the same quarter last year [1]. - In the last reported quarter, Dillard's achieved an earnings surprise of 39.5%, with an average earnings beat of 14.1% over the trailing four quarters [2]. Earnings Prediction - The current Earnings ESP for Dillard's is 0.00%, and it holds a Zacks Rank of 3 (Hold), indicating that the model does not predict an earnings beat this time [3][2]. Market Trends - Dillard's has been affected by a challenging retail environment, leading to cautious consumer buying behavior, which has negatively impacted sales and comparable-store sales [4]. - A predicted decline of 1.1% in comparable-store sales is expected due to the tough retail conditions, with overall retail sales anticipated to drop by 1.3% year-over-year [5]. - SG&A expenses are projected to increase by 2% for the first quarter, with the SG&A expense rate expected to rise by 90 basis points to 28% [6]. Operational Insights - Despite the challenges, Dillard's has improved its inventory management and has seen strong consumer demand, which has helped strengthen its competitive position [7]. - The company is focusing on growth opportunities in both brick-and-mortar and e-commerce, enhancing brand relationships, remodeling stores, and optimizing its activewear segment [8]. - Initiatives to improve brand relations and focus on trending categories are expected to have contributed positively to sales in the first quarter [9]. E-commerce and Store Performance - Dillard's e-commerce business has benefited from better merchandise assortments and effective inventory management, contributing to overall performance [10]. - The company is concentrating on increasing productivity at existing stores and enhancing its omnichannel platform, which is expected to drive fiscal first-quarter performance [10]. Valuation and Stock Performance - Dillard's is trading at a premium compared to industry and historical benchmarks, with a forward 12-month price-to-sales ratio of 0.87X, higher than the industry average of 0.28X [11]. - Year-to-date, Dillard's shares have decreased by 16.6%, while the industry has seen a decline of 26.9% [12].