Dillard's (NYSE:DDS) Shares Gap Up - Should You Buy?

Key Points

• Dillard’s shares gapped up before trading, opening well above the prior close as investors reacted to the company’s latest earnings and sales update.
• The retailer reported strong Q1 results, with EPS of $16.04 versus $10.13 expected and retail sales/comparable sales both up 3% year over year.
• Profitability improved, with net income rising to $250.6 million and gross margin increasing to 45.8%, though part of the earnings beat was boosted by a $104.1 million litigation settlement gain.

Dillard's, Inc. (NYSE:DDS - Get Free Report) shares gapped up prior to trading on Thursday . The stock had previously closed at $532.92, but opened at $588.00. Dillard's shares last traded at $549.9290, with a volume of 28,015 shares trading hands.

More Dillard's News

Here are the key news stories impacting Dillard's this week:

• Positive Sentiment: Dillard’s Q1 earnings came in at $16.04 per share, well above the Zacks consensus estimate of $10.13, signaling stronger-than-expected profitability. Article Title
• Positive Sentiment: Total retail sales rose 3% year over year, with comparable-store sales also up 3%, suggesting healthy demand across the chain. Article Title
• Positive Sentiment: Net income jumped to $250.6 million from $163.8 million a year ago, while retail gross margin improved to 45.8%, pointing to better profitability and mix. Article Title
• Neutral Sentiment: The quarter included a $104.1 million pre-tax litigation settlement gain, which boosted reported earnings and may make the headline EPS less repeatable. Article Title
• Neutral Sentiment: Operating expenses rose to 28.3% of sales from 27.6%, and inventory increased 3%, which could matter if sales growth slows later in the year. Article Title
• Negative Sentiment: Some of the stock’s longer-term upside may be tempered by the fact that recent analyst coverage has leaned bearish, including a new Sell rating from UBS and an Underweight rating from JPMorgan. Article Title

Wall Street Analyst Weigh In

A number of research firms have commented on DDS. UBS Group raised their target price on Dillard's from $460.00 to $465.00 and gave the company a "sell" rating in a report on Wednesday, May 6th. Weiss Ratings reiterated a "hold (c)" rating on shares of Dillard's in a report on Wednesday, January 21st. JPMorgan Chase & Co. reduced their price objective on shares of Dillard's from $524.00 to $449.00 and set an "underweight" rating for the company in a research note on Wednesday, February 25th. Telsey Advisory Group decreased their price objective on shares of Dillard's from $700.00 to $650.00 and set a "market perform" rating on the stock in a report on Wednesday, February 25th. Finally, Zacks Research cut shares of Dillard's from a "strong-buy" rating to a "hold" rating in a report on Monday, February 23rd. Three research analysts have rated the stock with a Hold rating and two have given a Sell rating to the company's stock. Based on data from MarketBeat.com, the stock presently has an average rating of "Reduce" and a consensus price target of $521.33.

Dillard's Stock Down 0.8%

The firm's fifty day simple moving average is $583.82 and its 200-day simple moving average is $621.03. The company has a market cap of $8.25 billion, a PE ratio of 14.58 and a beta of 1.17. The company has a quick ratio of 1.31, a current ratio of 2.65 and a debt-to-equity ratio of 0.24.

Dillard's (NYSE:DDS - Get Free Report) last posted its earnings results on Tuesday, February 24th. The company reported $13.05 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $9.98 by $3.07. The firm had revenue of $1.99 billion for the quarter, compared to analyst estimates of $2.03 billion. Dillard's had a return on equity of 27.55% and a net margin of 8.81%.Dillard's's revenue was down 3.0% on a year-over-year basis. During the same quarter in the prior year, the company earned $13.48 EPS. As a group, equities research analysts expect that Dillard's, Inc. will post 32.52 earnings per share for the current fiscal year.

Dillard's Announces Dividend

The business also recently disclosed a quarterly dividend, which was paid on Monday, May 4th. Investors of record on Tuesday, March 31st were paid a dividend of $0.30 per share. The ex-dividend date of this dividend was Tuesday, March 31st. This represents a $1.20 dividend on an annualized basis and a dividend yield of 0.2%. Dillard's's dividend payout ratio (DPR) is presently 3.30%.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently added to or reduced their stakes in the company. Northwestern Mutual Wealth Management Co. raised its position in shares of Dillard's by 28,394.2% in the fourth quarter. Northwestern Mutual Wealth Management Co. now owns 226,529 shares of the company's stock valued at $137,354,000 after buying an additional 225,734 shares during the last quarter. Norges Bank purchased a new position in shares of Dillard's during the 4th quarter worth $36,598,000. Balyasny Asset Management L.P. acquired a new stake in shares of Dillard's during the third quarter worth $31,813,000. Man Group plc boosted its holdings in shares of Dillard's by 464.3% during the third quarter. Man Group plc now owns 38,806 shares of the company's stock worth $23,846,000 after purchasing an additional 31,929 shares during the last quarter. Finally, Goldman Sachs Group Inc. grew its position in shares of Dillard's by 75.6% in the first quarter. Goldman Sachs Group Inc. now owns 66,142 shares of the company's stock valued at $23,687,000 after purchasing an additional 28,468 shares during the period. 67.15% of the stock is currently owned by hedge funds and other institutional investors.

About Dillard's

Dillard's, Inc NYSE: DDS, headquartered in Little Rock, Arkansas, is a U.S.-based department store chain founded by William T. Dillard in 1938. Over more than eight decades of operation, the company has grown from a single store in Nashville, Arkansas, to a prominent retailer with a national footprint. Dillard's equity is publicly traded on the New York Stock Exchange under the ticker DDS.

The company operates approximately 280 departmental stores across 29 states, offering a broad assortment of merchandise that includes men's and women's apparel, accessories, cosmetics, footwear, and home furnishings.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.