Economic Indicators (Gwen Moritz Editor’s Note)

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Mark Friedman, the indispensable journalist whose title here at Arkansas Business is senior editor, rolled out on the morning of Saturday, May 16, to cover Dillard’s Inc.’s annual shareholder meeting. He’s done this duty perhaps a dozen times in the 20 years he’s been part of the reporting staff here, but never before did he have to wear a mask and listen to the perfunctory formalities from a speaker in a separate room at the Dillard’s headquarters in Little Rock.

Dillard’s did not arrange for any kind of webcast of the meeting, and Mark was the only reporter present to hear CEO William Dillard II describe the transition from a “reasonably normal company” at the start of February to “total chaos” by the end of April. This was two days after Dillard’s had announced a gut-punch loss of $162 million in its first fiscal quarter, which ended May 2.

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Interest in news from the department store chain is clearly high. Mark’s report on the Saturday shareholder meeting, which lasted approximately seven minutes, attracted more than 15,000 pageviews on ArkansasBusiness.com by Wednesday afternoon — thousands of readers every day for days on end.

Like all traditional department stores, Arkansas’ second-largest retailer was in a tricky market position long before the coronavirus pandemic forced it to start closing stores on March 19. (Neiman Marcus and J.C. Penney both filed for bankruptcy reorganization this month.)

By April 9, all 285 Dillard’s locations were closed and didn’t start to reopen until May 5. Its online store, Dillards.com, continued to operate, and Dillard’s President Alex Dillard told shareholders that online orders doubled in the quarter. The company has never quantified e-commerce sales, but doubling that segment didn’t keep total sales from falling by 47%.

On Tuesday, Arkansas’ vastly larger retail juggernaut, Walmart Inc., announced quarterly results that underscored the importance of one’s market segment in current conditions. Walmart’s same-store sales, a key metric applied to stores that have been open at least a year, were up 10% in the fiscal quarter that ended May 1, and overall sales were up 8.6% to almost $134.62 billion. (I was tempted to round that to $135 billion, but I couldn’t bring myself to round hundreds of millions of dollars.)

Like Dillard’s, Walmart does not yet put a dollar sign on e-commerce sales. (I’ve always assumed that was because they would suffer by comparison to Amazon. Hold that thought.) Still, they were up 74% in the first fiscal quarter, compared with the same quarter last year. And instead of losing money in the pandemic, Walmart beat analyst expectations by earning almost $4 billion, even after some $900 million in costs associated with COVID-19.

A pandemic is a good time to sell staples rather than luxury goods. Especially if you have what Walmart CEO Doug McMillon called an “omnichannel strategy.” Walmart customers have been able to shop in-store like usual and order online for home delivery. But online ordering for in-person pickup or delivery also helped supercharge the first quarter. “The number of new customers trying pickup and delivery has increased 4x since mid-March,” McMillon said.

Imagine how much more they could have earned if they hadn’t run out of toilet paper and hand sanitizer.


Here’s a bit of bright news: Dillard’s didn’t make USA Today’s list of 13 retailers that might not survive the pandemic.

J.C. Penney and Neiman Marcus were on the list, and another fulfilled the prophecy last week. Already in Chapter 11 reorganization, Pier 1 Imports asked the court’s permission to close all of its stores forever. “Get your wicker furniture and seat cushions while you can,” a headline on the Cleveland Plain Dealer’s website advised.


Amazon reported revenue of $75.5 billion in its first quarter, which, unlike Dillard’s and Walmart, ended on March 31, weeks earlier in the COVID-19 crisis. That was an increase of more than 26% compared with the first quarter of 2019. Amazon is expecting to sell as much or more in the second quarter — between $75.0 billion and $81.0 billion.

In 2019, Amazon’s first-quarter revenue ($59.7 billion) was 48% of Walmart’s ($123.9 billion). This year, it was 56%. And because of the differences in their fiscal calendars, Walmart’s results included the benefits of more weeks of quarantine than Amazon. While both had stellar results, 26-year-old Amazon is clearly growing faster than 58-year-old Walmart.

Amazon also warned of $4 billion in costs associated with the pandemic, which CEO Jeff Bezos said would essentially wipe out all profit for the second quarter.