Dillard's (DDS) Stock Plunges as Credit Suisse Lowers Earnings Estimate

NEW YORK (TheStreet) -- Shares of Dillard's   (DDS) are plunging 9.28% to $112.67 in afternoon trading Friday after Credit Suisse lowered its 2015 earnings estimate to $8 from $8.20.

This action comes after the department store chain reported first quarter results earlier this month. The company reported revenue of $1.57 billion, or $2.66 per share, compared to revenue of $1.55 billion, or $2.56 per share for the same quarter a year ago. 

While the company's revenue slightly increased from last year's, analysts at Thomson Reuters expected the retail giant to report revenue of $1.61 billion, or $2.78 per share for the first quarter.

"We are disappointed with our first quarter performance," said Dillard's CEO William Dillard, II. "Our 1% sales decline hampered our ability to leverage operating expenses and to drive net income growth."

Credit Suisse analysts said, "The primary issue for the company remains a lack of revenue growth. Comps and retail revenues declined for the second time in two years, and without revenue growth, maintaining operating margins will be challenging."

Additionally, the company called out the Texas market as underperforming the overall company, with the eastern region being the best performer.

TheStreet Ratings team rates DILLARDS INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate DILLARDS INC (DDS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, increase in net income and attractive valuation levels. We feel its strengths outweigh the fact that the company shows low profit margins."

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