Dillard's Drops For Q2; Report Shows Foot Traffic Falling In Sector

Dillard's store

The department store segment had mixed news this week, as Dillard’s showed signs of recovery but a new report showed a reversal of some of the positive foot traffic and sales trends that had led to a guardedly optimistic outlook for the sector.

Dillard’s reported earnings Thursday (Aug. 13) that showed the expected drop from store closures due to the pandemic, but an impressive take on overhead controls. The 560-store chain, located mainly in the southeast, showed a drop in total retail sales for the 13-week period ended Aug. 1, 2020 of $893.2 million compared to $1,378.2 million in 2019. Total retail sales decreased approximately 35 percent for its second quarter.

As it showed with its Q1 results, the company has exercised cost-cutting and overhead management that outdoes its competitors. Operating expenses for the 13 weeks ended Aug. 1 decreased $141.8 million to $265.8 million (29.8 percent of sales) compared to $407.6 million (29.6 percent of sales) for the prior year’s second quarter.

“As insight into consumer behavior grows, management continues to execute inventory control measures with the continual goal of aligning purchases with sales,” Dillard’s said in a statement. “Second quarter purchases decreased 62%. Retail gross margin for the 13 weeks ended August 1, 2020 improved 239 basis points of sales compared to the prior year second quarter primarily due to decreased markdowns. Consolidated gross margin for the 13 weeks ended August 1, 2020 improved 271 basis points of sales compared to the prior year second quarter.”

Dillard’s owns 90 percent of its retail store square footage and 100 percent of its corporate headquarters, distribution and fulfillment centers. That means its lease payments, which have been a thorn in the side of other department stores, are minimal.

While the news from Dillard’s was encouraging, a new report says the future is not.

According to new data from, a data tracking service, Macy’s, JCPenney and Dillard’s are beginning to see a reversal of foot traffic trends owing to the pandemic-driven closures in states where the pandemic is still raging including Arizona, Texas and Florida.

According to Placer, Macy’s had already started off 2020 with mixed traffic numbers, seeing year-over-over visits down 0.9 percent in January but up 6.4 percent for February. As expected, visits in March dropped 62.7 percent and declined into April before “bottoming out” completely in May with an 88.2 percent drop.

JCPenney bottomed out in April with a complete shutdown of its stores. It approached recovery in June, hitting a high for June 15 and pulling within 27 percent of 2019 numbers. More recently, store visits have declined, hitting a low point on the week of July 20 with visits down 46.9 percent. Dillard’s, meanwhile, was seeing traffic gains of 6.6 percent in February. Its visits stopped in April before both May and June saw traffic move to pre-pandemic levels.

“The brand’s recovery pace is falling off, or plateauing, from its initial traffic rush after being allowed to reopen,” said the report. “Although visits were just 26.7% down for the week of June 15, the closest to 2019 levels, traffic has continued to decline since then.”



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