Dillard’s, Inc. (DDS): Should You Avoid This Retail Enigma?

What’s to come?
For 2013, Macy’s predicted relatively strong same-store sales growth of 3.5% and double-digit earnings growth. However, it was virtually alone among major retailers in projecting a strong 2013. Kohl’s expects net income to decline in 2013 on virtually stagnant sales. Investors could potentially discount this, since Kohl’s appeals to a lower-income demographic that may be more deeply affected by the recent payroll tax increase. However, upscale department store Nordstrom also projected a slowdown in sales growth, with comparable store sales expected to rise 3.5% to 5.5% as opposed to the high-single-digit gains seen in most recent quarters.

In other words, with the limited information available today, it is hard for investors to be confident in continued positive momentum at Dillard’s. Other retailers should get credit for providing forecasts and beating them — or missing them and having to explain themselves to the investor community later. When all the signs were positive, Dillard’s could perhaps afford to be secretive. With the outlook more cloudy today, investors should think twice before investing in this enigmatic department store stock.

The article Should You Avoid This Retail Enigma? originally appeared on Fool.com and is written by Adam Levine-Weinberg.

Fool contributor Adam Levine-Weinberg has no position in any stocks mentioned. The Motley Fool owns shares of Dillard’s.

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