Dillard's Misses Sales and Earnings Estimates for Quarter

Department store chain Dillard'sposted a 30% drop in first-quarter profit as sales declined, sending shares lower .

Net profit fell to $42.9 million, or 53 cents a share, from $61.3 million, or 77 cents a share, a year earlier.

The latest earnings included a pre-tax $4.1 million hurricane recovery gain, which added 3 cents to earnings after tax.

Analysts were expecting 72 cents a share excluding the recovery gain, according to Reuters Estimates.

"Dillard's is slipping deeper into a strategic bind, due to its eroding sales," wrote Oppenheimer & Co. analyst Bernard Sosnick in a research note.

With Macy's becoming the first national chain of department stores last year, and given its "much greater sales and negotiating power" compared to Dillard's, "increasingly it will face Macy's strategic might," Sosnick wrote.

He said the struggling former May stores, which are expected to improve over time, would impact Dillard's Texas stores and other strongholds in the Western region.

Net Sales

Net sales fell 4% to $1.76 billion during the quarter, dragged down by weak sales of juniors' and children's clothing. Sales were strongest in the Western region.

Analysts had been expecting Dillard's to post net sales of $1.84 billion, according to Reuters Estimates.

Sales at stores open at least a year fell 5% during the quarter.

The company had earlier reported that April same-store sales declined 14%, hurt by an earlier Easter holiday.