Dillard's Unlikely to Provide Annual Guidance in Q3 Financial Report, UBS Says

MT Newswires Live11-04

Dillard's (DDS) is unlikely to provide annual guidance or Q4 commentary in its Q3 financial report, with the market expected to focus on business trends, UBS analysts said in a Tuesday note.

Analysts said that investor expectations for comps to remain stable or modestly accelerate on quarter despite tougher comparisons and modestly bullish sentiment toward Dillard's made them to see a slightly unfavorable upside/downside skew into the print.

UBS said the company's "bar" for Q3 is to show improving operating trends, especially comparable sales growth of 1% to 2% relative to 1% in Q2, and gross margin expansion of 25 to 75 basis points versus 45 basis points in Q2.

Analysts said Dillard's US search trends rose 5% and online visits were strong in the first two months of the quarter, but noted that observed store sales declined 1.3%. They model Q3 comparable sales growth of 1%.

UBS reiterated its sell rating on the stock with a price target of $468 per share.

Shares of the company were down over 6% in Tuesday trading.

Price: 603.69, Change: -42.47, Percent Change: -6.57

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