Dillard’s ( NYSE: DDS ) stock slumped over 17% in afternoon trading on Tuesday after JP Morgan analyst Matthew Boss cut his rating to Underweight from Neutral.
Shares of the department store chain initially dipped on Tuesday after reporting softer than expected holiday sales and an over 300 basis point margin contraction from the prior year amid heavy promotional activity. Merchandise inventories increased 4% from the prior year despite the deep markdowns noted by management in the quarter, many of which carried into Q1 2023.
Boss voiced concerns on the margin declines, which he noted accelerated at a faster rate than the department store peer group. Additionally, he expects a sharp comparable sales drop for the first quarter given tough compares heading into 2023.
Boss forecast a 21% EPS decline in 2023, followed by a 9% sequential decline in 2024. As such, he downgraded the stock to a Sell-equivalent rating and trimmed his price target to $286 from a prior $345.
Shares of Dillard’s dove 17.35% shortly before Tuesday’s close, marking the biggest one-day decline in about 15 months. Shares of Kohl’s ( KSS ) -9.31% , Macy’s ( M ) -5.34% , and Nordstrom ( JWN ) -7.34% each marked deep declines following the report from Dillard’s as well.
Read more on Tuesday’s laggards .
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Dillard’s stock dives nearly 20% as JP Morgan cuts to Sell