Dillard's

(DDS) - Get Report

first-quarter earnings plunged 29% from a year ago, dragged well below estimates by a 3% decline in same-store sales and markdown-battered margins.

The department store chain earned $38 million, or 46 cents a share, in the quarter, compared with $53.8 million, or 64 cents a share, last year. Sales slipped 3% from a year ago to $1.80 billion. Analysts had been expecting earnings of 53 cents a share on sales of $1.91 billion in the latest quarter.

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The stock was off $2.21, or 8.6%, to $23.25.

Among other things, sales of women's clothing and furniture were much weaker than expected in the quarter. Dillard's also reported anemic sales in general in the central U.S.

First-quarter gross margins fell by 90 basis points from last year because of a higher level of markdowns. The company said it was forced into discounting to keep inventory in line with a weaker-than-expected sales performance.

"Dillard's continues to execute key merchandise initiatives as it works to maintain relationships with existing loyal customers while attracting new customers with expanded offerings in upscale and contemporary fashions," the company said.