LITTLE ROCK, Ark. (AP) -- Dillard's Inc. says markdowns designed to spur sales cut into its profitability in its fiscal fourth quarter.
The department store operator on Monday reported disappointing financial results for the period that ended Feb. 1 and its shares sank in trading.
Dillard's, based in Little Rock, Ark., is one of several retailers that relied heavily on markdowns to try and stimulate sales during a sluggish holiday shopping season. Nordstrom, Macy's and many other retailers said they increased some of their promotions as consumers remained reticent about spending.
The markdowns at Dillard's, however, took a heavier toll on its performance.
Dillard's earned $119.1 million, or $2.71 per share, for the period, down 26 percent from $161.4 million, or $3.36 per share, the prior year. On an adjusted basis, it earned $2.69 versus $2.87 per share. Analysts polled by FactSet were anticipating $2.99 per share.
Its total revenue fell to $2.08 billion from $2.15 billion in the year prior's quarter, which included an extra week. Merchandise sales fell to $2.01 billion from $2.09 billion. Analysts were anticipating revenue of $2.07 billion.
Revenue from stores open at least a year, considered a key indicator of financial performance as it strips away recently opened or close sites, increased 2 percent.
Dillard's said that the markdowns designed to combat weak sales caused its retail gross margin to fall to 32.8 percent from 34.6 percent.
For the full year, the company earned $323.7 million, or $7.10 per share, on revenue of $6.69 billion. It operated 278 Dillard's locations and 18 clearance centers as of Feb. 1.
Shares fell $5.29, a 5.9 percent drop, to $84.05 by midmorning trading.
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