Dillard’s posts second-quarter profit on improving margins, better inventory management

Dillard’s posts 2Q profit on improving margins

LITTLE ROCK, Ark. — Department-store operator Dillard’s Inc. posted a profit in its second-quarter compared with a loss in last year’s quarter on improving margins and better inventory management.

The company earned $6.8 million, or 10 cents per share, in the quarter ending July 31. That compares with a loss of $26.7 million, or 36 cents per share, in the same period last year.

This year’s second quarter included a gain of $2.6 million, or 4 cents per share, on the sale of a building and an income tax benefit of $2 million, or 3 cents per share.

Revenue fell 2.7 percent to $1.39 billion.

Revenue in stores open at least a year, a key measure of a retailer’s financial health, was flat during the quarter. The measure excludes revenue from newly opened stores and those that may have closed in the past year.

The company said it is focusing on its inventory to shorten the time to sale, reduce the risk of markdowns and keep a fresh stock of merchandise to keep shoppers interested.

Department store operators were hit hard as consumers cut back amid the recession, but after cutting costs and lowering inventory, many have begun reporting improved results.

The company repurchased $77.6 million of stock during the quarter, out of the company’s $200 million buyback program.

Shares fell 36 cents to close at $20.91 on Thursday.