Dillard's Stock Tumbles After Earnings Miss

Key Points

* Dillard's stock (DDS) dropped 6% on Thursday after the retailer reported earnings that fell short of expectations. * The company's CEO, William T. Dillard II, cited a challenging consumer environment as a factor in the weak results. * Dillard's stock has declined 3% year-to-date, underperforming the S&P 500, which has gained 14%.

Earnings Miss

* Dillard's reported a 3.4% decrease in comparable sales for the first quarter, missing analysts' estimates. * Net income fell by 43% to $35.1 million, or $1.26 per share, also below expectations.

CEO's Comments

* "We are disappointed with our weak first quarter results," said Dillard in a statement. * "The consumer environment remains challenging, and we saw a significant decline in sales of apparel in particular."

Analyst's Reaction

* Analysts at Wells Fargo downgraded Dillard's stock to "underperform" from "market perform," citing concerns about the company's ability to compete with online retailers. * "Dillard's faces significant challenges in its legacy business, and we believe its pivot to online will not be enough to offset the challenges it faces in its brick-and-mortar stores," the analysts said in a note to clients.

Recent Performance

* Dillard's stock had gained 6% in the morning session on April 20, following strong third-quarter results. * The company's same-store sales increased by 3% in the third quarter, and net income climbed by 32%.

Outlook

* Dillard's did not provide specific guidance for the upcoming quarter or full year. * The company's CEO said that the company remains "cautious" about the consumer environment and expects to continue to face challenges in the apparel business.