Things were glum in Little Rock as Dillard’s Inc. announced that first quarter earnings dropped 29% due to lack of demand in women’s clothing and furniture, tanking the company’s stock by 11%.
Analysts said poor fashion line choices led to the drop in sales, sending balking women elsewhere. Dillard’s responded by slashing prices, but it may prove too little to late as it works to improve its selection amid piles of unsold merchandise.
Net income dropped from $53.8 million in the same quarter last year to $38 million this year.
Even though these are disappointing returns for Dillard’s, shares stay up due to rumors of possible mergers in the US department store arena. The weak sales provide a point of contention as to whether Dillard’s will remain an attractive acquisition prospect.
Analysts at Oppenheimer & Co. say that while the “downward spiral” in sales would form a likelihood for sale, the Dillard family may have waited to long to find a buyer.
“Unless a financial buyer steps in, which we think is increasingly unlikely, we believe Dillard's is a speculative situation that will end badly," said Bernard Sosnick, an analyst for Oppenheimer.

So where's the punch line?

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