UPDATE 1-Dillard's posts lower quarterly profit
(Adds sales, store closures)
ATLANTA May 22 (Reuters) - Department store operator Dillard's Inc (DDS.N) reported a 94 percent fall in first-quarter profit on Thursday as higher markdowns cut into margins, and its shares fell in after-hours trading.
The apparel and home furnishings retailer, which is closing underperforming stores and taking other moves to hold down expenses this year, pointed to the softer U.S. economy.
"The weak economic conditions, particularly in Florida, made it extremely difficult to achieve profitable sales levels," Chief Executive William Dillard said in a statement.
The company, which plans to shutter six stores in the current, second quarter, said it would continue to evaluate its store base for additional closures.
Earnings were $2.7 million, or 4 cents a share, for the quarter ended May 3, compared with $42.9 million, or 53 cents a share, a year earlier. The latest quarter included store closing charges of 1 cents a share.
Total sales fell 5 percent to $1.68 billion. Sales at outlets open at least a year, or same-store sales, fell 6 percent.
The mall-based retailer said gross margin fell 280 basis points in the quarter, hurt by higher markdowns.
Last month, Dillard's reached an agreement with a shareholder group that included hedge fund manager Barington Capital to avoid a proxy fight at its May annual meeting.
Barington Capital had been calling on Dillard's to take steps to improve financial results and governance practices since at least June 2007.
The Little Rock, Arkansas, retailer has seen its financial results steadily weaken. Monthly same-store sales have fallen for much of the past year.
Dillard's shares fell 6 percent to $15.35 in after-hours trading from their $16.36 close on the New York Stock Exchange.
(Reporting by Karen Jacobs, editing by Richard Chang)
We are living longer but not creating financial plans to keep pace. Advisers give tips on how to make sure you don’t outlive your money. Video