Department Store Stocks Q3 Recap: Benchmarking Dillard's (NYSE:DDS)
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how the department store stocks have fared in Q3, starting with Dillard's (NYSE:DDS).
Department stores emerged in the 19th century to provide customers with a wide variety of merchandise under one roof, offering a convenient and luxurious shopping experience. They played an important role in the history of American retail and urbanization, and prior to department stores, retailers tended to sell narrow specialty and niche items. But what was once new is now old, and department stores are somewhat considered a relic of the past. They are being attacked from multiple angles–stagnant foot traffic at malls where they’ve served as anchors; more nimble off-price and fast-fashion retailers; and e-commerce-first competitors not burdened by large physical footprints.
The 4 department store stocks we track reported an impressive Q3; on average, revenues beat analyst consensus estimates by 0.8% Stocks have been under pressure as inflation (despite slowing) makes their long-dated profits less valuable, but department store stocks held their ground better than others, with the share prices up 25.6% on average since the previous earnings results.
Dillard's (NYSE:DDS)
With stores located largely in the Southern and Western US, Dillard’s (NYSE:DDS) is a department store chain that sells clothing, cosmetics, accessories, and home goods.
Dillard's reported revenues of $1.50 billion, down 4.4% year on year, falling short of analyst expectations by 1%. It was a mixed quarter for the company. Same store sales missed fairly meaningfully, leading to a revenue miss. On the other hand, gross margin was better than expectations and operating expenses were lower than expected though, allowing for operating profit and EPS to beat.
Dillard’s Chief Executive Officer William T. Dillard, II stated, “The sales environment remained challenging in the third quarter with particular weakness beginning in September. Our focus on producing profitable sales with inventory control paid off - with retail gross margin of 45.3% and inventory down 1% year over year. We repurchased $48 million of stock and had $893 million of cash and short-term investments remaining.”
Dillard's scored the fastest revenue growth of the whole group. The stock is up 28.2% since the results and currently trades at $395.64.
Is now the time to buy Dillard's? Access our full analysis of the earnings results here, it's free.
Best Q3: Macy's (NYSE:M)
With a storied history that began with its 1858 founding, Macy’s (NYSE:M) is a department store chain that sells clothing, cosmetics, accessories, and home goods.
Macy's reported revenues of $5.04 billion, down 7.3% year on year, outperforming analyst expectations by 4.4%. It was an exceptional quarter for the company, with a solid beat of analysts' earnings estimates and an impressive beat of analysts' revenue estimates.
Macy's scored the biggest analyst estimates beat but had the slowest revenue growth among its peers. The stock is up 51% since the results and currently trades at $19.05.
Is now the time to buy Macy's? Access our full analysis of the earnings results here, it's free.
Weakest Q3: Nordstrom (NYSE:JWN)
Known for its exceptional customer service that features a ‘no questions asked’ return policy, Nordstrom (NYSE:JWN) is a high-end department store chain.
Nordstrom reported revenues of $3.32 billion, down 6.4% year on year, falling short of analyst expectations by 2.9%. It was a weak quarter for the company, with a miss beat of analysts' revenue estimates.
Nordstrom had the weakest performance against analyst estimates in the group. The stock is up 22.4% since the results and currently trades at $18.25.
Read our full analysis of Nordstrom's results here.
Kohl's (NYSE:KSS)
Founded as a corner grocery store in Milwaukee, Wisconsin, Kohl’s (NYSE:KSS) is a department store chain that sells clothing, cosmetics, electronics, and home goods.
Kohl's reported revenues of $4.05 billion, down 5.2% year on year, surpassing analyst expectations by 2.7%. It was a mixed quarter for the company. While same-store sales and net sales (excluding credit card operations revenue) missed expectations, gross margin and expense control was better, leading to a nice EPS beat vs. analysts' expectations. Guidance was also mixed, with the full year outlook lowered for same-store sales but raised for EPS.
The stock is up 11.9% since the results and currently trades at $27.83.
Read our full, actionable report on Kohl's here, it's free.
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The author has no position in any of the stocks mentioned
