Shares of Dillard's (NYSE:DDS) were among yesterday's biggest losers, dropping 7% after the Little Rock, Ark.-based retailer posted dismal second-quarter earnings. The company cut last year's $50.4 million loss nearly in half to $26 million, but a $0.31 drop in earnings was far wider than the $0.16 that analysts had been anticipating.

Significant earnings discrepancies, both to the upside and the downside, are commonplace for Dillard's. The company is controlled by the Dillard family, which not only has several board members but also owns all of the class B shares and hence the voting power to elect two-thirds of the directors.

The firm refuses to issue guidance and communicates minimally with analysts, thus quarterly results often vary widely from estimates. Almost exactly a year ago, Fool LouAnn Lofton reported a mirror-image second quarter, with a $0.35 loss that was nearly double the $0.18 prediction. On the other hand, not all of the surprises are negative. Three months ago, Dillard's blew away the $0.22 consensus estimate by 191%.

Unfortunately, such quarters have been the exception to the rule. Dillard's revenues have declined for four consecutive years, and yesterday's results show few signs of a turnaround. Comps fell by 3%, and overall sales dropped 2.9% to $1.67 billion. After starting the year with four straight months of improvements, same-store sales have now slipped 5%, 1%, and 4%, respectively, over the past three months.

It is difficult to make the case that Dillard's rivals in the mid-upper tier of the retail world are currently suffering the same softness. Federated Department Stores (NYSE:FD) recently posted earnings that came in ahead of expectations, driven by a 3.3% rise in comps. Earlier this week J.C. Penney (NYSE:JCP) reported that net income had swung from a $3 million loss to a $72 million gain, with revenues solidly higher. Kohl's (NYSE:KSS) saw its quarterly earnings jump 39%, on sales that climbed 13.1%.

Dillard's made a few minor improvements in gross margins and outlined several merchandising plans, but aside from that, there was little to cheer in yesterday's results. The sale of the firm's credit card division to General Electric (NYSE:GE) for $1.25 billion will reduce debt and has an ongoing revenue-sharing component, but ultimately what matters is revamping stores (which appear cluttered and devoid of any discernible strategy) and getting operations back on track.

Until then, Dillard's P/E of 47 seems a little pricey for a company with an ROE of 1.7, a profit margin below one-half of one percent, and a history of unpredictability.

Fool contributor Nathan Slaughter owns none of the companies mentioned.