Dillard's Swings To 4Q Loss On Charges; Sales, Margins Drop

   DOW JONES NEWSWIRES 
 

Dillard's Inc. (DDS) swung to a fiscal fourth-quarter net loss as the recession took its toll on sales and margins and the company recorded store-closure and weather-related charges.

Chief Executive William Dillard II said the department-store operator took aggressive action to reduce inventory and costs, but the savings weren't enough to buoy results.

Amid the woes, Dillard's closed 21 stores, cut jobs and closed its travel business in 2008. The retailer said Thursday it has identified five more stores for closure this year and will scale back its capital expenditures to about $120 million this year from $188 million in 2008.

Department stores have struggled as economic pressures and tighter budgets sent consumers looking for low-priced items at discounters. But Dillard's, in particular, has been hurt by declining sales for some time.

For the quarter ended Jan. 31, the company posted a net loss $149.3 million, or $2.03 a share, compared with year-earlier net income of $47.3 million, or 63 cents a share.

The latest results included $1.72 a share in store-closure and hurricane-related charges.

Total revenue declined 5.7% to $2.08 billion as merchandise sales dropped 9% and same-store merchandise sales decreased 8%.

Gross margin fell to 24.8% from 32.4%, reflecting increased markdown activity.

Shares were unchanged after hours at $3 after closing down 14% amid a broad market decline. The stock has lost 81% of its value in the past year.

-By Lauren Pollock, Dow Jones Newswires; 201-938-5964; [e-mail]