News

Dillard’s, Inc. DDS is expected to register year-over-year top and bottom-line declines when it reports fourth-quarter fiscal 2023 numbers.

The Zacks Consensus Estimate for fiscal fourth-quarter revenues of $2.1 billion indicates a 2.2% decline from the year-ago reported figure. The Zacks Consensus Estimate for fiscal fourth-quarter earnings is pegged at $11.59 per share, indicating a 20.1% decrease from the year-ago quarter’s reported figure. The consensus estimate has moved up 0.4% in the past 30 days.

In the last reported quarter, the company registered an earnings surprise of 33.8%. We note that in the trailing four quarters, its bottom line beat the Zacks Consensus Estimate by 54.2%, on average.

Dillard's, Inc. Price and EPS Surprise

Key Factors to Note

Dillard’s has been benefiting from better inventory management initiatives and strong consumer demand. The company exited the fiscal third quarter with lower inventory levels year over year. This trend is expected to have continued in the to-be-reported quarter.

The company’s efforts to capture growth opportunities in brick-and-mortar stores and the e-commerce business have been the key drivers. The company focuses on enhancing brand relationships, remodeling stores and optimizing its activewear segment. Gains from these initiatives are likely to have reflected in its fiscal fourth-quarter results.

On the store front, DDS has been gaining from initiatives to enhance brand relations, focus on in-trend categories, store remodels and increased rewards to store personnel. Its activewear brands are expected to have gained market share in the quarter under review.

Also, the e-commerce business has been well-placed on the enhancement of merchandise assortments and effective inventory management. We expect the company’s fiscal fourth-quarter performance to have gained from its focus on increasing productivity at existing stores, improved omni-channel platform and enhanced domestic operations.

However, Dillard’s has been witnessing continued cautiousness of consumers, particularly in juniors’ and children’s apparel. This, along with higher payroll and payroll-related expenses, is likely to have dented the fiscal fourth-quarter performance.

Our model predicts a comps decline of 3.5% for the fiscal fourth quarter due to a tough retail environment in the quarter.

We anticipate gross margin and operating margin to decline 270 basis points (bps) and 460 bps, respectively, for the fiscal fourth quarter. We expect SG&A expenses to increase 4.3% year over year in the fourth quarter and 2.7% in fiscal 2023.

What the Zacks Model Suggests

Our proven model does not conclusively predict an earnings beat for Dillard’s this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Dillard’s currently has an Earnings ESP of -12.49% and a Zacks Rank #2.

Stocks Poised to Beat Earnings Estimates

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat.

American Eagle Outfitters AEO currently has an Earnings ESP of +0.87% and sports a Zacks Rank #1. AEO is likely to register top and bottom-line growth when it reports fourth-quarter fiscal 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.65 billion, suggesting 10.5% growth from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for American Eagle’s fiscal fourth-quarter earnings is pegged at 50 cents, suggesting 35.1% growth from the year-ago quarter. The consensus mark has moved up 4.2% in the past 30 days.

DICK'S Sporting Goods DKS currently has an Earnings ESP of +1.08% and a Zacks Rank #2. DKS is likely to register top and bottom-line growth when it reports fourth-quarter fiscal 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.75 billion, suggesting 4.2% growth from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for DKS’ fiscal fourth-quarter earnings is pegged at $3.33, suggesting year-over-year growth of 13.7%. The consensus mark has moved up 1.2% in the past seven days.

Ross Stores ROST currently has an Earnings ESP of +0.02% and a Zacks Rank #3. The company is likely to register top and bottom-line growth when it reports fourth-quarter fiscal 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $5.75 million, suggesting 10.3% growth from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Ross Stores’ fiscal fourth-quarter earnings is pegged at $1.62, suggesting 23.7% growth from that reported in the year-ago quarter. The consensus mark has been unchanged in the past 30 days.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.