Dillard’s Inc (NYSE:DDS) has beaten revenue and earnings estimates for the first quarter this year by a wide margin of $30 million and $0.12 per share. The American fashion apparel, cosmetics, and home furnishings retailer has also generated growth in revenues and earnings compared to previous periods. It’s comparable, and merchandise sales rose 2% from the same period last year.
Investors are applauding its financial performances. Dillard’s stock price rose 6% after the first quarter earnings release. DDS stock is up 26% since the start of this year, extending the one year rally to 57%.
The company continues to see strength in ladies’ accessories, home furniture, lingerie, and children’s apparel.
Dillard’s Chief Executive Officer, William T. Dillard, stated, “Our positive sales momentum continued into the first quarter. We believe this indicates our customer is more comfortable spending in this economic environment, and we hope the positive trend continues.”
Its earnings per share also increased at a robust pace although revenue growth was modest. Its first-quarter earnings per share were standing at around $2.89 per share, relative earnings of $2.12 per share in the same period last year.
Share Buybacks and Valuations Support Uptrend
Combined with support from higher sales and lower expenses, the company’s strategy of lowering its outstanding shares contributed to its earnings growth.
Dillard’s management has repurchased $35 million of common stock during the first quarter. The company has also announced a new buyback program of $500 million for following quarters. Its aggressive focus on share buybacks aids its stock price and earnings per share performance.
DDS stock has also been trading at lower valuations compared to the industry average. Its stock currently trades around only 10 times to earnings and 0.35 times to sales when the industry average is hovering around 20 times to earnings and 2 times to sales.
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