What: good results at Dillard’s in spite of the crisis

Why it is important: According to an article in The Motley Fool, Dillard’s is one of the few department stores which has actually managed to successfully navigate the Covid-19 period so far. After surprisingly good Q2 (May – July) results, analysts were still expecting problems for its third quarter. However, Dillard’s unexpectedly published a quarterly profit in Q3 (ending 31 October).

After a massive loss in its first quarter, the company cleared its inventory down more than 14% over the year. So while sales fell 35% in Q2, gross margin was up to 31.1% from 28.7%. Inventory clearing continued in Q3, boosting gross margin to 36.6%. Although sales remained weak, down by 25%, it managed to reduce retail expenses by 24% keeping costs flat as a percentage of revenue. It also managed to generate cash flow and reduce its short-term borrowings significantly.

This Department Store Chain Is Making Money Despite COVID-19