Dillard's stock surges despite missing estimates

Dillard's Inc. (DDS) reported lower-than-anticipated fourth-quarter fiscal 2014 results, “wherein adjusted earnings of 3.15 dollars per share fell short of the Zacks Consensus Estimate of 3.20 dollars. However, adjusted earnings marked a year-over-year improvement of nearly 16.2 percent,” wrote Zacks Equity Research in a note to investors.

"We finished 2014 with our best sales performance of the year in the most important quarter. Our 3 percent sales increase was supported by a strong 103 basis point retail gross margin improvement, as customers responded well to our improved mix and service throughout the holiday season," Dillard's CEO William Dillard II said in a statement.

For the most recent quarter Dillard's said its net income was 130.5 million dollars, or 3.17 dollars per share compared to the 119.1 million dollars, or 2.71 dollars per share for the 2013 fourth quarter. Analysts were expecting the company to post earnings of 3.18 dollar per share for the latest quarter, noted ‘TheStreet’.

Likewise, Dillard's net sales for the 13 weeks ended January 31, 2015 up, coming it at 2.14 billion dollars; that is ahead last year’s same period’s 2.03 billion dollars. In this case, analysts fell short with their average of estimated revenue of 2.08 billion dollars for the quarter.

The company experienced a 3 percent rise in comparable store sales for the 2014 fourth quarter versus the 1 percent growth analysts polled by FactSet had forecast.

More optimistic about the company’s future performance, analysts at TheStreet have rated their stock as a ‘buy’. “This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, reasonable valuation levels, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results," they explained in a note.

Despite missing the consensus estimates, the apparel retailer saw its shares rocketing in extended trading on Monday. The stock added 2.03 percent to 126 dollars in after-hours trading.