uploads/2020/05/dillards-results.jpg

Dillard’s Stock Posted Weak Q1 Results, Still Rose 9%

By

Updated

Dillard’s (NYSE:DDS) stock gained around 9% in after-hours trading on Thursday following its first-quarter results. The company reported lower-than-expected results in the first quarter of fiscal 2020, which ended on May 2, amid the coronavirus pandemic. However, the stock rose after the company stated that it has re-opened 149 locations to date. The locations include 24 clearance centers. Dillard’s plans to re-open about 116 stores and five clearance centers later this month. In April, Dillard’s temporarily closed all of its 285 store locations amid the COVID-19 pandemic.

Article continues below advertisement

In the first-quarter earnings release, Dillard’s CEO William T. Dillard II said, “COVID-19 has impacted every aspect of our business. The mall business in general and department stores, specifically, have been particularly hard hit. While our balance sheet was already strong, we took decisive, sometimes difficult, actions to preserve liquidity and ensure our long-term viability. As we re-open stores, we see positive things happening. We believe people are ready to get out and shop. We are hoping this is the start of better times.”

Q1 earnings results

In the first quarter, Dillard’s reported an EPS of -$6.94 compared to $2.99 in the first quarter of fiscal 2019. The earnings missed analysts’ consensus estimate of $0.08 per share. Dillard’s generated total revenue of $821.6 million—a reduction of 45.2% from the first quarter of fiscal 2019. The company also missed analysts’ consensus total revenue expectation of $1.09 billion.

Article continues below advertisement

Analysts’ recommendations for Dillard’s stock

Among the five analysts following Dillard’s stock, three recommend a “sell” and two recommend a “hold.” None of the analysts recommend a “buy.” Wall Street analysts’ mean target price on the stock is $22.50, which implies a 2.5% loss from the current level of $23.08. The consensus target price for the stock has fallen from $38.25 in April—a fall of 41.2%.

Many analysts revised their target price for the stock after its first-quarter earnings report on Thursday.

  • J.P. Morgan decreased its target price from $32 to $23.
  • Wedbush decreased its target price from $25 to $19.
  • Telsey Advisory Group decreased its target price from $38 to $30.
  • Deutsche Bank increased its target price from $18 to $19.

Peer comparison

Wall Street analysts expect Macy’s (NYSE:M) to post sales of $3.3 billion in the first quarter, which ended in April—a fall of 40.0% YoY compared to $5.5 billion in the first quarter of fiscal 2019. Also, analysts expect the company to report a non-GAAP EPS of -$1.17 in the first quarter compared to $0.44 a year ago. Macy’s will likely report its first-quarter results on July 1.

Wall Street analysts expect Kohl’s (NYSE:KSS) to post sales of $2.2 billion in the first quarter, which ended in April—a fall of 42.4% YoY compared to $3.8 billion in the first quarter of fiscal 2019. Also, analysts expect the company to report a non-GAAP EPS of -$1.72 in the first quarter compared to $0.61 a year ago. Kohl’s will likely report its first-quarter results on May 19.

Dillard’s stock returns

Dillard’s stock fell 4.0% on Thursday and ended the day at $23.08. At this closing price, the company’s market cap is $535.4 million. Notably, the stock is trading 73.4% below its 52-week high of $86.71 and 7.3% above its 52-week low of $21.50.

Based on the closing price on Thursday, Dillard’s stock was trading 13.3% below its 20-day moving average of $26.62. The stock is also trading 30.9% below its 50-day moving average of $33.38 and 53.7% below its 100-day moving average of $49.90. Dillard’s 14-day relative strength index number is 37. The number indicates that the stock is approaching the oversold level.

Dillard’s stock rose 6% in pre-market trading today at 7:15 AM ET. The S&P 500 futures fell 0.76%, while the Dow futures fell 0.73%. To learn more, read Trump’s Wary, Experts Warn of US Stock Market Crash.

Advertisement

More From Market Realist