Dillard’s, Inc. Reports Second Quarter Results
Dillard’s reported its operating results for the 13 and 26 weeks ending July 31, 2021. The Company saw a robust increase in total sales, achieving $1.52 billion for the second quarter, a 39% rise year-over-year. Net income reached $213 million, marking a significant 68% jump compared to the prior year. Total merchandise sales rose substantially, and the Company continued to focus on optimizing its inventory.
Despite strong financials, cautious market conditions persist, emphasizing the need for ongoing strategic adjustments.
- Total sales for Q2 reached $1.52 billion, up 39% YoY.
- Net income for the period was $213 million, a 68% increase YoY.
- Significant growth in total merchandise sales.
- None.
Dillard’s, Inc. (NYSE: DDS) (the “Company” or “Dillard’s”) announced operating results for the 13 and 26 weeks ended July 31, 2021. This release contains certain forward-looking statements. Please refer to the Company’s cautionary statements included below under “Forward-Looking Information.”
Dillard's Chief Executive Officer William T. Dillard, II stated, "The strong consumer demand we saw in the first quarter continued throughout the second quarter. This momentum, combined with our continuing focus on inventory and expense control, produced a sequential record performance. We ended the quarter with
Due to the significant impact of COVID-19 on prior year figures, this release will include certain comparisons to 2019 to provide additional context.
Selected Financial Metrics of the Second Quarter (Compared to the Prior Year Second Quarter)
-
Total retail sales increased
72% -
Net income of
$185.7 million compared to a net loss of$8.6 million -
Net income of
$8.81 per share compared to a net loss of$0.37 per share -
Retail gross margin of
41.7% compared to31.1% -
Inventory decreased approximately
13% -
Operating expenses were
$365.9 million (23.3% of sales) compared to$267.1 million (29.1% of sales) -
Share repurchases of
$112.2 million during the quarter -
Cash flow provided by operations of
$492.4 million compared to$294.5 million of cash used in operations (26 weeks) -
Ending cash of
$669.5 million compared to$82.9 million with no short-term borrowings compared to$229.6 million
Second Quarter Results
Dillard’s reported net income for the 13 weeks ended July 31, 2021 of
Sales - Second Quarter
Net sales for the 13 weeks ended July 31, 2021 and the 13 weeks ended August 1, 2020 were
Total retail sales (which excludes CDI) for the 13-week periods ended July 31, 2021 and August 1, 2020 were
Compared to the second quarter of 2019, total retail sales for the 13-week periods ended July 31, 2021 and August 3, 2019 were
Gross Margin / Inventory - Second Quarter
Consolidated gross margin (which includes CDI) for the 13 weeks ended July 31, 2021 improved significantly to
Retail gross margin (which excludes CDI) for the 13 weeks ended July 31, 2021 improved significantly to
Compared to the second quarter of 2019, retail gross margin improved 1,299 basis points of sales to
Management attributes the substantial improvement in gross margin to stronger consumer demand and better inventory management leading to decreased markdowns in the second quarter of 2021.
Inventory decreased approximately
Selling, General & Administrative Expenses - Second Quarter
Consolidated selling, general and administrative expenses ("operating expenses") for the 13 weeks ended July 31, 2021 were
Compared to the second quarter of 2019, retail operating expenses for the 13 weeks ended July 31, 2021 and August 3, 2019 decreased 591 basis points of sales to
The decrease is primarily due to decreased payroll and payroll related expenses as the Company continues to operate with reduced operating hours, requiring fewer associates.
26-Week Results
Dillard’s reported net income for the 26 weeks ended July 31, 2021 of
Included in net loss for the prior year 26-week period is a net tax benefit of
Net sales for the 26 weeks ended July 31, 2021 and the 26 weeks ended August 1, 2020 were
Total retail sales for the 26-week periods ended July 31, 2021 and August 1, 2020 were
Compared to the first half of 2019, total retail sales for the 26-week periods ended July 31, 2021 and August 3, 2019 were
Consolidated gross margin for the 26 weeks ended July 31, 2021 improved significantly to
Retail gross margin for the 26 weeks ended July 31, 2021 improved significantly to
Compared to the first half of 2019, retail gross margin improved 883 basis points of sales to
Consolidated operating expenses for the 26 weeks ended July 31, 2021 were
Compared to the first half of 2019, retail operating expenses for the 26 weeks ended July 31, 2021 and August 3, 2019 decreased 431 basis points of sales to
Share Repurchase
During the 13 weeks ended July 31, 2021, the Company purchased
During the 26 weeks ended July 31, 2021, the Company purchased
As of July 31, 2021, authorization of
Store Information
During the second quarter, the Company closed its Paradise Valley Mall location in Phoenix, Arizona (200,000 square feet). The Company plans to close its clearance center at Valle Vista Mall in Harlingen, Texas (100,000 square feet) during the third quarter. Dillard's plans to open its new location at Mesa Mall in Grand Junction, Colorado (100,000 square feet) during the third quarter.
The Company operates 249 Dillard’s locations and 31 clearance centers spanning 29 states and an Internet store at dillards.com. Total square footage at July 31, 2021 was 47.7 million square feet.
Dillard’s, Inc. and Subsidiaries |
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Condensed Consolidated Statements of Operations (Unaudited) |
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(In Millions, Except Per Share Data) |
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13 Weeks Ended |
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26 Weeks Ended |
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July 31, 2021 |
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August 1, 2020 |
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July 31, 2021 |
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August 1, 2020 |
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Amount |
% of
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Amount |
% of
|
|
Amount |
% of
|
|
Amount |
% of
|
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Net sales |
|
$ |
1,570.4 |
|
100.0 |
% |
|
$ |
919.0 |
|
100.0 |
% |
|
$ |
2,898.9 |
|
100.0 |
% |
|
$ |
1,705.7 |
|
100.0 |
% |
Service charges and other income |
|
31.0 |
|
2.0 |
|
|
26.1 |
|
2.8 |
|
|
60.1 |
|
2.1 |
|
|
61.1 |
|
3.6 |
|
||||
|
|
1,601.4 |
|
102.0 |
|
|
945.1 |
|
102.8 |
|
|
2,959.0 |
|
102.1 |
|
|
1,766.8 |
|
103.6 |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
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Cost of sales |
|
927.2 |
|
59.0 |
|
|
639.8 |
|
69.6 |
|
|
1,701.3 |
|
58.7 |
|
|
1,328.3 |
|
77.9 |
|
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Selling, general and administrative expenses |
|
365.9 |
|
23.3 |
|
|
267.1 |
|
29.1 |
|
|
702.5 |
|
24.2 |
|
|
557.5 |
|
32.7 |
|
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Depreciation and amortization |
|
50.0 |
|
3.2 |
|
|
51.0 |
|
5.5 |
|
|
96.5 |
|
3.3 |
|
|
101.9 |
|
6.0 |
|
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Rentals |
|
5.1 |
|
0.3 |
|
|
5.6 |
|
0.6 |
|
|
10.2 |
|
0.4 |
|
|
11.2 |
|
0.7 |
|
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Interest and debt expense, net |
|
10.8 |
|
0.7 |
|
|
12.9 |
|
1.4 |
|
|
22.3 |
|
0.8 |
|
|
25.1 |
|
1.5 |
|
||||
Other expense |
|
2.1 |
|
0.1 |
|
|
2.1 |
|
0.2 |
|
|
7.1 |
|
0.2 |
|
|
4.2 |
|
0.2 |
|
||||
Gain on disposal of assets |
|
— |
|
0.0 |
|
|
— |
|
0.0 |
|
|
24.7 |
|
0.9 |
|
|
— |
|
0.0 |
|
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Income (loss) before income taxes |
|
240.3 |
|
15.3 |
|
|
(33.4) |
|
(3.6) |
|
|
443.8 |
|
15.3 |
|
|
(261.4) |
|
(15.3) |
|
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Income taxes (benefit) |
|
54.6 |
|
|
|
(24.8) |
|
|
|
99.9 |
|
|
|
(90.9) |
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Net income (loss) |
|
$ |
185.7 |
|
11.8 |
% |
|
$ |
(8.6) |
|
(0.9) |
% |
|
$ |
343.9 |
|
11.9 |
% |
|
$ |
(170.5) |
|
(10.0) |
% |
|
|
|
|
|
|
|
|
|
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|
|
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Basic and diluted earnings (loss) per share |
|
$ |
8.81 |
|
|
|
$ |
(0.37) |
|
|
|
$ |
16.03 |
|
|
|
$ |
(7.33) |
|
|
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Basic and diluted weighted average shares |
|
21.1 |
|
|
|
23.2 |
|
|
|
21.5 |
|
|
|
23.3 |
|
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Dillard’s, Inc. and Subsidiaries |
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Condensed Consolidated Balance Sheets (Unaudited) |
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(In Millions) |
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July 31, 2021 |
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August 1, 2020 |
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Assets |
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Current Assets: |
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Cash and cash equivalents |
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$ |
669.5 |
|
|
$ |
82.9 |
|
Accounts receivable |
|
34.4 |
|
|
28.6 |
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Merchandise inventories |
|
1,112.8 |
|
|
1,283.1 |
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Federal and state income taxes |
|
122.8 |
|
|
85.7 |
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Other current assets |
|
66.3 |
|
|
65.8 |
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Total current assets |
|
2,005.8 |
|
|
1,546.1 |
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||
|
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Property and equipment, net |
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1,237.4 |
|
|
1,394.2 |
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Operating lease assets |
|
44.1 |
|
|
44.1 |
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Deferred income taxes |
|
26.8 |
|
|
23.3 |
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Other assets |
|
69.4 |
|
|
75.5 |
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Total Assets |
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$ |
3,383.5 |
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$ |
3,083.2 |
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Liabilities and Stockholders' Equity |
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Current Liabilities: |
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Trade accounts payable and accrued expenses |
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$ |
881.5 |
|
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$ |
586.8 |
|
Other short-term borrowings |
|
— |
|
|
229.6 |
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Current portion of long-term debt and finance lease liabilities |
|
0.4 |
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|
1.0 |
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Current portion of operating lease liabilities |
|
12.1 |
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|
13.8 |
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Total current liabilities |
|
894.0 |
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831.2 |
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Long-term debt and finance lease liabilities |
|
365.9 |
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|
366.1 |
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Operating lease liabilities |
|
31.5 |
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30.1 |
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Other liabilities |
|
282.5 |
|
|
284.5 |
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Subordinated debentures |
|
200.0 |
|
|
200.0 |
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Stockholders' equity |
|
1,609.6 |
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|
1,371.3 |
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Total Liabilities and Stockholders' Equity |
|
$ |
3,383.5 |
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|
$ |
3,083.2 |
|
Dillard’s, Inc. and Subsidiaries |
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Condensed Consolidated Statements of Cash Flows (Unaudited) |
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(In Millions) |
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26 Weeks Ended |
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July 31, 2021 |
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August 1, 2020 |
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Operating activities: |
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Net income (loss) |
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$ |
343.9 |
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|
$ |
(170.5) |
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
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|
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Depreciation and amortization of property and other deferred cost |
|
97.7 |
|
|
103.1 |
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Gain on disposal of assets |
|
(24.7) |
|
|
— |
|
||
Proceeds from insurance |
|
2.3 |
|
|
— |
|
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Loss on early extinguishment of debt |
|
2.8 |
|
|
— |
|
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Changes in operating assets and liabilities: |
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|
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|
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Decrease in accounts receivable |
|
2.2 |
|
|
17.5 |
|
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(Increase) decrease in merchandise inventories |
|
(25.0) |
|
|
181.9 |
|
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Increase in other current assets |
|
(10.9) |
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(5.1) |
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Increase in other assets |
|
(1.1) |
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|
(0.1) |
|
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Increase (decrease) in trade accounts payable and accrued expenses and other liabilities |
|
111.7 |
|
|
(290.3) |
|
||
Decrease in income taxes |
|
(6.5) |
|
|
(131.0) |
|
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Net cash provided by (used in) operating activities |
|
492.4 |
|
|
(294.5) |
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|
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Investing activities: |
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Purchase of property and equipment and capitalized software |
|
(41.2) |
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|
(38.6) |
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Proceeds from disposal of assets |
|
29.3 |
|
|
0.3 |
|
||
Proceeds from insurance |
|
2.8 |
|
|
— |
|
||
Distribution from joint venture |
|
— |
|
|
0.2 |
|
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Net cash used in investing activities |
|
(9.1) |
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|
(38.1) |
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|
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Financing activities: |
|
|
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|
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Principal payments on long-term debt and finance lease liabilities |
|
(0.3) |
|
|
(0.5) |
|
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Cash dividends paid |
|
(6.6) |
|
|
(7.2) |
|
||
Purchase of treasury stock |
|
(164.2) |
|
|
(80.5) |
|
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Issuance cost of line of credit |
|
(3.0) |
|
|
(3.0) |
|
||
Increase in short-term borrowings |
|
— |
|
|
229.6 |
|
||
Net cash (used in) provided by financing activities |
|
(174.1) |
|
|
138.4 |
|
||
|
|
|
|
|
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Increase (decrease) in cash and cash equivalents |
|
309.2 |
|
|
(194.2) |
|
||
Cash and cash equivalents, beginning of period |
|
360.3 |
|
|
277.1 |
|
||
Cash and cash equivalents, end of period |
|
$ |
669.5 |
|
|
$ |
82.9 |
|
|
|
|
|
|
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Non-cash transactions: |
|
|
|
|
||||
Accrued capital expenditures |
|
$ |
14.5 |
|
|
$ |
8.0 |
|
Accrued purchase of treasury stock |
|
6.8 |
|
|
3.0 |
|
||
Stock awards |
|
1.1 |
|
|
0.8 |
|
||
Lease assets obtained in exchange for new operating lease liabilities |
|
3.8 |
|
|
4.1 |
|
||
Estimates for 2021
The Company is providing the following estimates for certain financial statement items for the fiscal year ending January 29, 2022 based upon current conditions. Actual results may differ significantly from these estimates as conditions and factors change - See “Forward-Looking Information.”
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In Millions |
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|
2021 |
2020 |
|
|||
|
|
|
Estimated |
Actual |
|
|||
Depreciation and amortization |
|
|
$ |
195 |
|
$ |
213 |
|
Rentals |
|
|
21 |
|
22 |
|
||
Interest and debt expense, net |
|
|
42 |
|
49 |
|
||
Capital expenditures |
|
|
120 |
|
60 |
|
||
|
|
|
|
|
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Forward-Looking Information
The foregoing contains certain “forward-looking statements” within the definition of federal securities laws. The following are or may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995: statements including (a) words such as “may,” “will,” “could,” “believe,” “expect,” “future,” “potential,” “anticipate,” “intend,” “plan,” “estimate,” “continue,” or the negative or other variations thereof, and (b) statements regarding matters that are not historical facts. The Company cautions that forward-looking statements contained in this report are based on estimates, projections, beliefs and assumptions of management and information available to management at the time of such statements and are not guarantees of future performance. The Company disclaims any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information, or otherwise. Forward-looking statements of the Company involve risks and uncertainties and are subject to change based on various important factors. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements made by the Company and its management as a result of a number of risks, uncertainties and assumptions. Representative examples of those factors include (without limitation) the COVID-19 pandemic and its effects on public health, our supply chain, the health and well-being of our employees and customers, and the retail industry in general; other general retail industry conditions and macro-economic conditions; economic and weather conditions for regions in which the Company’s stores are located and the effect of these factors on the buying patterns of the Company’s customers, including the effect of changes in prices and availability of oil and natural gas; the availability of consumer credit; the impact of competitive pressures in the department store industry and other retail channels including specialty, off-price, discount and Internet retailers; changes in consumer spending patterns, debt levels and their ability to meet credit obligations; changes in tax legislation; changes in legislation, affecting such matters as the cost of employee benefits or credit card income; adequate and stable availability and pricing of materials, production facilities and labor from which the Company sources its merchandise; changes in operating expenses, including employee wages, commission structures and related benefits; system failures or data security breaches; possible future acquisitions of store properties from other department store operators; the continued availability of financing in amounts and at the terms necessary to support the Company’s future business; fluctuations in LIBOR and other base borrowing rates; the elimination of LIBOR; potential disruption from terrorist activity and the effect on ongoing consumer confidence; other epidemic, pandemic or public health issues; potential disruption of international trade and supply chain efficiencies; any government-ordered restrictions on the movement of the general public or the mandated or voluntary closing of retail stores in response to the COVID-19 pandemic; world conflict and the possible impact on consumer spending patterns and other economic and demographic changes of similar or dissimilar nature. The Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended January 30, 2021, contain other information on factors that may affect financial results or cause actual results to differ materially from forward-looking statements.
View source version on businesswire.com: https://www.businesswire.com/news/home/20210812005173/en/
FAQ
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