Dillard's blames 2Q loss on lackluster sales

LITTLE ROCK, Ark. Dillard's Inc. today reported that net loss for the second quarter ended Aug. 4 was $25.2 million (31 cents per diluted share) compared to net income of $15.7 million (20 cents per diluted share) for the second quarter ended July 29, 2006. Dillard's attributes the disappointing performance primarily to a gross margin decline (190 basis points of sales) as lackluster sales during the quarter necessitated higher markdown activity in order to maintain acceptable inventory levels. Inventory in comparable-stores declined 4% compared to the prior year second quarter.

 Net sales for the quarter were $1.649 billion compared to sales for the 13 weeks ended July 29, 2006 of $1.685 billion. Total net sales declined 2% during the 13-week period. Sales in comparable-stores declined 3%.

During the quarter, net sales in the Central region were slightly better than the company's total performance for the period. Sales were consistent with trend in the Western region and below trend in the Eastern region. Sales in the juniors' and children's apparel category and the home and other category declined significantly more than trend during the period.