U.S. Markets closed

Dillard's (DDS) Stays Ahead of Industry: Up 16% in 3 Months

Zacks Equity Research

Dillard’s Inc. DDS is among the few department store retail chains that have shown resilience, owing to its ability to catch up with the evolving retail trends. The company’s efforts to capitalize on growth opportunities in physical stores and e-commerce bode well. Its strong long-term prospects are also supported by ongoing inventory management initiatives, trendy product offerings and shareholder-friendly moves.

Needless to say, Dillard’s stock has witnessed strong momentum lately, outpacing its peers. This Zacks Rank #3 (Hold) stock has surged 16.3% in the past three months, outperforming the industry’s growth of 4.3%. Furthermore, the stock has outpaced the Retail-Wholesale sector’s growth of 9.5% in the same period.

 



You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dillard’s created a niche for itself through stringent focus on offering fashionable products to customers and adding value through exceptional customer care service. Its strategy of offering fashion-forward and trendy products acts as a catalyst for attracting more customers. Moreover, we expect the company to gain from the focus on increasing productivity at existing stores, developing a leading omni-channel platform and enhancing domestic operations in the years ahead.

The company remains well poised to benefit from growth opportunities in brick-and-mortar stores and e-commerce business, which are likely to help retain existing customers and attract new ones. On the store front, it will gain by enhancing brand relations, focusing on in-trend categories, store remodels and rewarding store personnel.

Then again, some of the strategies to boost growth across the company’s e-commerce business include enhancing merchandise assortments and effective inventory management. As of Feb 2, 2019, merchandise inventories improved 4.4% year over year to $1,528.4 million. Additionally, the company’s ability to generate strong free cash flows should go a long way in aiding investments for business growth while enhancing shareholder returns.

These strategies place Dillard’s well to compete with peers likes Kohl’s Corp. KSS, J. C. Penney JCP and Macy’s M. We believe that the company’s business model, and commitment toward expanding digital and domestic presence will continue to drive traffic.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Kohl's Corporation (KSS) : Free Stock Analysis Report
 
J. C. Penney Company, Inc. (JCP) : Free Stock Analysis Report
 
Dillard's, Inc. (DDS) : Free Stock Analysis Report
 
Macy's, Inc. (M) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research