Dillard’s, Inc. Reports Record Third Quarter Earnings per Share of $1.13 versus $0.96 Excluding Items

  Dillard’s, Inc. Reports Record Third Quarter Earnings per Share of $1.13
  versus $0.96 Excluding Items

Business Wire

LITTLE ROCK, Ark. -- November 14, 2013

Dillard’s, Inc. (NYSE: DDS) (the “Company” or “Dillard’s”) announced operating
results for the 13 and 39 weeks ended November 2, 2013. This release contains
certain forward-looking statements. Please refer to the Company’s cautionary
statements regarding forward-looking information included below under
“Forward-Looking Information.”

Highlights of the Company’s Third Quarter Performance

  *Record earnings per share of $1.13 versus $0.96 excluding items
  *A 1% increase in comparable store sales
  *Operating expense leverage of 40 basis points of sales
  *Repurchase of $186.9 million of Class A Common Stock (2.4 million shares)

Third Quarter Results

Dillard’s reported net income for the 13 weeks ended November 2, 2013 of $50.9
million, or $1.13 per share compared to net income of $48.5 million, or $1.01
per share, for the 13 weeks ended October 27, 2012. Included in net income for
the prior year third quarter is a net after-tax credit totaling $2.4 million
or $0.05 per share comprised of the following items:

  *A $0.7 million after-tax gain ($0.01 per share) related to the sale of two
    former retail store locations
  *Approximately $1.7 million ($0.04 per share) in tax benefit due to the
    reversal of a valuation allowance related to a deferred tax asset
    consisting of a capital loss carryforward

Excluding these items, Dillard’s would have reported $46.1 million ($0.96 per
share) for the prior year third quarter.

Dillard’s Chief Executive Officer, William T. Dillard, II, stated, “Another
positive comparable store sales increase and expense control highlighted our
third quarter at Dillard’s, as did our aggressive execution of $187 million of
share buyback. In spite of a somewhat disappointing 30 basis point decline in
merchandise gross margin, we were pleased to deliver increased net income. As
we enter our 75th anniversary holiday season, we are looking forward to
serving our customers nationwide at an exceptional level.”

39 Week Results

Dillard’s reported net income for the 39 weeks ended November 2, 2013 of
$204.6 million, or $4.43 per share compared to net income of $174.5 million,
or $3.55 per share, for the prior year 39-week period.

Included in net income for the 39-week period ended November 2, 2013 is a net
after-tax credit totaling $4.4 million ($0.09 per share) comprised of the
following three items:

  *A $7.6 million after-tax gain ($0.17 per share) related to the sale of an
    investment
  *A $1.0 million after-tax credit ($0.02 per share) related to a pension
    adjustment
  *After-tax asset impairment and store closing charges of $4.2 million
    ($0.09 per share)

Excluding this credit, Dillard’s would have reported net income of $200.2
million ($4.34 per share) for the 39-week period ended November 2, 2013.

Included in net income for the prior year 39-week period ended October 27,
2012 is a net after-tax credit totaling $2.4 million ($0.04 per share)
comprised of the following two items:

  *A $0.7 million after-tax gain ($0.01 per share) related to the sale of two
    former retail store locations
  *Approximately $1.7 million ($0.03 per share) in tax benefit due to the
    reversal of a valuation allowance related to a deferred tax asset
    consisting of a capital loss carryforward

Excluding this credit, Dillard’s would have reported net income of $172.1
million ($3.51 per share) for the 39-week period ended October 27, 2012.

Net Sales – 13 Weeks

Net sales for the 13 weeks ended November 2, 2013 were $1.469 billion and
$1.450 billion for the 13 weeks ended October 27, 2012. Net sales include the
operations of the Company’s construction business, CDI Contractors, LLC
(“CDI”).

Total merchandise sales (which exclude CDI) for the 13-week period ended
November 2, 2013 were $1.437 billion and $1.425 billion for the 13-week period
ended October 27, 2012. Total merchandise sales increased 1% for the 13-week
period ended November 2, 2013. Sales in comparable stores for the period
increased 1%.

Sales trends were notably strong in ladies’ accessories and lingerie followed
by shoes and ladies’ apparel. Sales were weakest in the home and furniture
category. Sales trends were strongest in the Central region, followed by the
Eastern and Western regions, respectively.

Net Sales – 39 Weeks

Net sales for the 39 weeks ended November 2, 2013 were $4.498 billion and
$4.487 billion for the 39 weeks ended October 27, 2012. Total merchandise
sales for the 39-week period ended November 2, 2013 were $4.426 billion and
$4.403 billion for the 39-week period ended October 27, 2012. Total
merchandise sales increased 1% for the 39-week period ended November 2, 2013.
Sales in comparable stores for the period increased 1%.

Gross Margin/Inventory

Gross margin from retail operations (which excludes CDI) decreased 30 basis
points of sales to 36.8% for the 13 weeks ended November 2, 2013 compared to
37.1% for the prior year third quarter. Consolidated gross margin for the 13
weeks ended November 2, 2013 decreased 40 basis points of sales to 36.2% from
36.6% during the prior year third quarter. Inventory increased 6% at November
2, 2013 compared to October 27, 2012.

Selling, General & Administrative Expenses

Selling, general and administrative expenses (“operating expenses”) decreased
40 basis points of sales during the third quarter ended November 2, 2013.
Operating expenses were $404.4 million and $404.6 million for the 13 weeks
ended November 2, 2013 and October 27, 2012, respectively. Decreases in
advertising expense and taxes other than income taxes were partially offset by
increased payroll, primarily selling payroll.

Share Repurchase

During the quarter ended November 2, 2013, the Company repurchased $186.9
million (2.4 million shares) of Class A Common Stock at an average price of
$77.80 per share under the Company’s share repurchase plan. Share repurchase
activity for the year-to-date period ended November 2, 2013 was $301.6 million
(3.9 million shares) at an average cost of $78.30 per share. Remaining
authorization under the share repurchase program at November 2, 2013 was $40.4
million.

Total shares outstanding (Class A and Class B Common Stock) at November 2,
2013 and October 27, 2012 were 43.9 million and 47.1 million, respectively.

Short-Term Borrowings

Other short-term borrowings were $170.0 million and $27.0 million at November
2, 2013 and October 27, 2012, respectively. The Company expects to have no
short-term borrowings at February 1, 2014.

“Making Christmas Merry for 75 Years”

Dillard’s is proudly marking its 75^th year of holiday service. This year,
Dillard’s has adapted the “Dillard’s. The Style of Your Life” campaign to
“Dillard’s. Making Christmas Merry for 75 Years” in celebration of this
important milestone. The new tag line will be featured in all Dillard’s
holiday advertising efforts throughout the holiday season including prominent
in-store placement. Continuing its longstanding tradition of honoring our
customers’ and associates’ time with family, Dillard’s will be closed on
Thanksgiving Day. Dillard’s will open its doors at 8:00 a.m. on Black Friday.

Store Information

During the third quarter of 2013, the Company closed its Euclid Square Mall
clearance location in Euclid, Ohio (100,000 square feet). Dillard’s announced
the upcoming closure of its University Mall location in Chapel Hill, North
Carolina (64,000 square feet) and its Collin Creek location in Plano, Texas
(195,000 square feet). Both locations are expected to close by the end of the
fourth quarter.

At November 2, 2013, the Company operated 282 Dillard’s locations and 17
clearance centers spanning 29 states and an Internet store at
www.dillards.com. Total square footage at November 2, 2013 was 50.8 million.






Dillard’s, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In Millions, Except Per Share Data)

                                    13 Weeks Ended       13 Weeks Ended
                                     November 2, 2013      October 27, 2012
                                                                   
                                                 % of                  % of
                                                 Net                   Net
                                     Amount                Amount
                                                 Sales                 Sales
                                                                       
Net sales                            $ 1,468.6   100.0 %   $ 1,449.6   100.0 %
Service charges and other income      38.3      2.6        36.7      2.5
                                       1,506.9   102.6       1,486.3   102.5
                                                                       
Cost of sales                          937.4     63.8        919.6     63.4
Selling, general and                   404.4     27.5        404.6     27.9
administrative expenses
Depreciation and amortization          64.9      4.4         65.8      4.5
Rentals                                5.9       0.4         7.6       0.5
Interest and debt expense, net         15.8      1.1         17.0      1.2
Gain on disposal of assets            -         0.0        1.0       0.1
Income before income taxes and
income on and equity in losses of      78.5      5.3         72.7      5.0
joint ventures
Income taxes                           27.6                  24.2
Income on and equity in losses of     -         0.0        -         0.0
joint ventures
Net income                           $ 50.9      3.5   %   $ 48.5      3.3   %
                                                                       
Basic earnings per share             $ 1.13                $ 1.03
Diluted earnings per share           $ 1.13                $ 1.01
Basic weighted average shares         45.2                 47.1
Diluted weighted average shares       45.2                 48.1







Dillard’s, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In Millions, Except Per Share Data)

                                    39 Weeks Ended       39 Weeks Ended
                                     November 2, 2013      October 27, 2012
                                                                   
                                                 % of                  % of
                                                 Net                   Net
                                     Amount                Amount
                                                 Sales                 Sales
                                                           
Net sales                            $ 4,497.6   100.0 %   $ 4,486.9   100.0 %
Service charges and other income      115.5     2.6        110.6     2.5
                                       4,613.1   102.6       4,597.5   102.5
                                                                       
Cost of sales                          2,852.0   63.4        2,864.3   63.8
Selling, general and                   1,192.8   26.5        1,196.7   26.7
administrative expenses
Depreciation and amortization          194.3     4.3         194.1     4.3
Rentals                                17.1      0.4         24.5      0.5
Interest and debt expense, net         48.3      1.1         52.1      1.2
Gain on disposal of assets             12.4      0.3         2.2       0.0
Asset impairment and store closing    6.5       0.1        -         0.0
charges
Income before income taxes and
income on and equity in losses of      314.5     7.0         268.0     6.0
joint ventures
Income taxes                           110.7                 94.5
Income on and equity in losses of     0.8       0.0        1.0       0.0
joint ventures
Net income                           $ 204.6     4.5   %   $ 174.5     3.9   %
                                                                       
Basic earnings per share             $ 4.43                $ 3.62
Diluted earnings per share           $ 4.43                $ 3.55
Basic weighted average shares         46.1                 48.3
Diluted weighted average shares       46.1                 49.2







Dillard’s, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)
(In Millions)
                                                                
                                                     November 2,   October 27,
                                                     2013          2012
Assets
Current Assets:
Cash and cash equivalents                            $  111.0      $  124.8
Accounts receivable                                     31.7          30.8
Merchandise inventories                                 1,829.2       1,722.4
Other current assets                                   65.7         66.6
Total current assets                                    2,037.6       1,944.6
                                                                   
Property and equipment, net                             2,164.5       2,345.9
Other assets                                           257.8        268.9
                                                                   
Total Assets                                         $  4,459.9    $  4,559.4
                                                                   
Liabilities and Stockholders' Equity
Current Liabilities:
Trade accounts payable and accrued expenses          $  1,035.8    $  1,028.2
Other short-term borrowings                             170.0         27.0
Current portion of long-term debt and capital           0.8           2.4
leases
Federal and state income taxes including current       91.8         80.0
deferred taxes
Total current liabilities                               1,298.4       1,137.6
                                                                   
Long-term debt and capital leases                       621.7         622.5
Other liabilities                                       230.9         247.6
Deferred income taxes                                   236.3         282.3
Subordinated debentures                                 200.0         200.0
Stockholders' equity                                   1,872.6      2,069.4
                                                                   
Total Liabilities and Stockholders' Equity           $  4,459.9    $  4,559.4







Dillard’s, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In Millions)

                                                     39 Weeks      39 Weeks

                                                     Ended         Ended
                                                               
                                                     November 2,   October 27,

                                                     2013          2012
Operating activities:                                           
Net income                                           $  204.6      $  174.5
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of property and           195.7         195.5
deferred financing cost
Gain on disposal of assets                              (12.4  )      (2.2   )
Asset impairment and store closing charges              6.5           -
Excess tax benefits from share-based compensation       -             (2.4   )
Changes in operating assets and liabilities:
Increase in accounts receivable                         (0.2   )      (2.0   )
Increase in merchandise inventories                     (534.6 )      (418.3 )
Increase in other current assets                        (23.1  )      (32.0  )
Decrease in other assets                                2.6           9.3
Increase in trade accounts payable and accrued          373.0         383.0
expenses and other liabilities
Decrease in income taxes payable                      (39.1  )    (85.5  )
Net cash provided by operating activities             173.0      219.9  
Investing activities:
Purchase of property and equipment                      (65.3  )      (111.9 )
Proceeds from disposal of assets                      18.3       12.0   
Net cash used in investing activities                 (47.0  )    (99.9  )
Financing activities:
Principal payments on long-term debt and capital        (1.5   )      (78.2  )
lease obligations
Cash dividends paid                                     (4.6   )      (7.4   )
Purchase of treasury stock                              (301.6 )      (162.1 )
Increase in short-term borrowings                       170.0         27.0
Excess tax benefits from share-based compensation       -             2.4
Proceeds from stock issuance                            -             4.2
Issuance cost of line of credit                       (1.4   )    (5.4   )
Net cash used in financing activities                 (139.1 )    (219.5 )
Decrease in cash and cash equivalents                   (13.1  )      (99.5  )
Cash and cash equivalents, beginning of period        124.1      224.3  
Cash and cash equivalents, end of period            $  111.0    $  124.8  
Non-cash transactions:
Accrued capital expenditures                         $  9.7        $  4.9
Stock awards                                            0.8           2.8







Estimates for 2013

The Company is providing the following estimates for certain financial
statement items for the fiscal year ending February 1, 2014 based upon current
conditions. Actual results may differ significantly from these estimates as
conditions and factors change – See “Forward-Looking Information.”

                                 In millions
                                   2013          2012
                                              
                                   Estimated     Actual
Depreciation and amortization      $261          $260
Rentals                            27            35
Interest and debt expense, net     65            70
Capital expenditures               100           137



Forward-Looking Information

The foregoing contains certain “forward-looking statements” within the
definition of federal securities laws. The following are or may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995: statements including (a) words such as “may,”
“will,” “could,” “believe,” “expect,” “future,” “potential,” “anticipate,”
“intend,” “plan,” “estimate,” “continue,” or the negative or other variations
thereof, and (b) statements regarding matters that are not historical facts.
The Company cautions that forward-looking statements contained in this report
are based on estimates, projections, beliefs and assumptions of management and
information available to management at the time of such statements and are not
guarantees of future performance. The Company disclaims any obligation to
update or revise any forward-looking statements based on the occurrence of
future events, the receipt of new information, or otherwise. Forward-looking
statements of the Company involve risks and uncertainties and are subject to
change based on various important factors. Actual future performance, outcomes
and results may differ materially from those expressed in forward-looking
statements made by the Company and its management as a result of a number of
risks, uncertainties and assumptions. Representative examples of those factors
include (without limitation) general retail industry conditions and
macro-economic conditions; economic and weather conditions for regions in
which the Company’s stores are located and the effect of these factors on the
buying patterns of the Company’s customers, including the effect of changes in
prices and availability of oil and natural gas; the availability of consumer
credit; the impact of competitive pressures in the department store industry
and other retail channels including specialty, off-price, discount and
Internet retailers; changes in consumer spending patterns, debt levels and
their ability to meet credit obligations; changes in legislation, affecting
such matters as the cost of employee benefits or credit card income; adequate
and stable availability and pricing of materials, production facilities and
labor from which the Company sources its merchandise; changes in operating
expenses, including employee wages, commission structures and related
benefits; system failures or data security breaches; possible future
acquisitions of store properties from other department store operators; the
continued availability of financing in amounts and at the terms necessary to
support the Company’s future business; fluctuations in LIBOR and other base
borrowing rates; potential disruption from terrorist activity and the effect
on ongoing consumer confidence; epidemic, pandemic or other public health
issues; potential disruption of international trade and supply chain
efficiencies; world conflict and the possible impact on consumer spending
patterns and other economic and demographic changes of similar or dissimilar
nature. The Company’s filings with the Securities and Exchange Commission,
including its Annual Report on Form 10-K for the fiscal year ended February 2,
2013, contain other information on factors that may affect financial results
or cause actual results to differ materially from forward-looking statements.

Contact:

Dillard’s, Inc.
Julie Johnson Bull, 501-376-5965