Dillard’s Inc. said Monday that profit in the latest quarter fell more than expected on disappointing sales performance, making it the latest retailer to post results that disappointed Wall Street.
Shares dropped 12% premarket to $68.20.
Same-store sales decreased 4%. Better performance in shoes, juniors’ and children’s apparel, cosmetics and ladies’ apparel was dragged down by weakness in men’s apparel and accessories, and ladies’ accessories and lingerie, while Dillard’s said it saw “notable weakness” in home and furniture.
“We are disappointed with our third-quarter sales performance and in the resulting decline in profit,” said Dillard’s Chief Executive William T. Dillard II. He added that the company’s share buybacks remain a high priority. The retailer repurchased $175 million of stock during the quarter.
For the quarter ended in October, Dillard’s reported a profit of $45.7 million, or $1.19 a share, down from $55.2 million, or $1.30, a year earlier. Income for the current year third quarter included an after-tax credit of $6 million, or 16 cents a share, for the sale of three store locations, compared with an after-tax credit of $3.8 million, or nine cents a share, for the sale of one store location.
Revenue edged down 1.7% to $1.43 billion.
Analysts polled by Thomson Reuters had forecast earnings of $1.20 on $1.49 billion in revenue.
Gross margin from retail operations, which excludes operations of the company’s construction business, improved 11 basis points of sales for the quarter ended October compared with the prior-year period.
Dillard’s has faced pressure from an activist investor to spin off its real estate holdings. As of Oct. 1, the company operated 274 Dillard’s locations and 23 clearance stores, with a total square footage of 50.1 million.
The results come amid a string of soft third-quarter reports from other retailers, who have warned about weak spending by consumers heading into the holiday season.
On Thursday, Nordstrom Inc. cut its profit and sales forecasts, saying it didn’t expect consumer trends to improve in the fourth quarter. The same day, Kohl’s Corp. reported its profit fell as strong back-to-school and late October selling periods were offset by a weak September. Macy’s Inc., meanwhile, warned Wednesday that it would have to make heavy markdowns to clear unsold goods after sales fell short in its most recent period.
Write to Anne Steele at Anne.Steele@wsj.com
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