Why Shares of Dillard's, Inc. Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Dillard's  (NYSE: DDS  ) were flying higher today, up as much as 15% on a strong first-quarter earnings report.

So what: During a quarter when many retailers struggled, Dillard's saw comparable sales increase 2%, driving earnings per share up from $2.50 a year ago to $2.56, which beat estimates at $2.41. Revenue of $1.59 billion was down marginally from a year ago due to a drop in service charges, and essentially in line with estimates at $1.6 billion. 

Now what: The company did not provide guidance on sales or profits, but the comparable-sales increase was the 15th consecutive one for Dillard's, a sign that sales growth should improve for the duration of the year as the weather improves. The department store chain also repurchased 1.7% of shares outstanding, or $65.9 million, in the quarter, helping to drive bottom-line value for investors. It has $224.5 million remaining under its current share buyback plan, which should ensure a declining share count. Dillard's shares reached a 52-week high on today's news, and shares have been climbing steadily since the recession. A flashy stock this is not, but a combination of steady sales growth and returning capital to shareholders should help the stock move higher. 

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