DDS has fallen well off of its highs in a pattern that has repeated many times over the years . Shares are roughly where they were two years ago, but I think the fundamentals have deteriorated, making the stock quite expensive. At a very high PE ratio, Dillard’s is a strong sell .
Why is dillards expensive?
The reason the products are expensive is because it’s one of America’s luxury department stores , along with Bergdorf Goodman, Barney’s New York, and Saks Fifth Avenue. The other reason is that it’s usually in high end areas, such as University Park-Dallas, or Buckhead-Atlanta.
Dillard’s overall attitude may be what makes them good merchants in the eyes of many analysts, including Cohen, who said that Dillard’s team are better store merchants, who “maintain and staff their stores better ,” than Macy’s. Nick Egelanian, president of retail development firm Siteworks, agrees.
What’s going on with Dillard’s?
In addition to opening these new stores, Dillard’s is also spending a tidy sum to relocate stores at several malls in Texas into larger spaces formerly occupied by Sears. The first of those relocated stores opened earlier this year, with the others slated to open in 2020 and beyond. What is management thinking?
Another frequently asked inquiry is “Why is Dillard so successful?”.
One answer is, nick Egelanian, president of retail development firm Siteworks, agrees. “Dillard’s primary advantage is that the company, which has a long history of hands-on family management , still has family involved in a very hands-on way,” he told Retail Dive in an email.
My chosen answer was that’s showing up in results. In its most recent quarter, Dillard’s disappointed investors as merchandise sales fell 2% year over year to $1.38 billion and net loss widened to $40.7 million from $2.9 million .
What is the history of Dillard’s?
Dillard’s, a relatively youthful department store at 81 years old compared to many of its peers founded in the 19th century, is a Southern institution with a support system that includes a loyal customer base, firm family control and a whole lot of real estate.
Another popular inquiry is “Will dillards survive?”.
Our favorite answer was dillard’s is still losing customers, and as economic conditions tighten towards the end of the year, it will likely lose more. It will also find spending from those shoppers it still has falls back . In other words, once benign conditions come to an end, the old weaknesses and problems at Dillard’s will resurface. This is not a broken business.
Two major department store operators filed for bankruptcy last year: Bon-Ton and Sears Holdings. Several others have closed lots of stores over the past few years. Dillard’s ( NYSE: DDS ) certainly hasn’t been immune to the recent pressure on the department store sector.
How many stores does Dillard’s have?
The Arkansas-based company runs 260 full-line stores and 29 clearance centers spanning 29 states, mostly in the South and Southwest. Like rival Nordstrom, Dillard family members (who have the added advantage of control through Class B stock) run the C-suite, with eight in key positions, including chief executive.
“Look for Dillard’s to steadily downsize as the shift away from malls and department stores enters its final phase — a phase in which Sears and J. C. Penney will likely liquidate and Macy’s is likely to disappear or substantially downsize .” Nevertheless, Cohen, Egelanian and Soysal all expect Dillard’s to be among the survivors in the space.