Dillard's(DDS) - 2026 Q2 - Quarterly Results

Operating Results Overview This section details Dillard's Q2 and year-to-date fiscal 2025 performance, covering sales, margins, expenses, and share repurchases Second Quarter Fiscal 2025 Performance Dillard's Q2 fiscal 2025 saw a 1% sales increase, but net income slightly decreased to $72.8 million, with retail gross margin contracting to 38.1% Key Highlights | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Retail Sales Growth | +1% | - | | Comparable Store Sales Growth | +1% | - | | Net Income | $72.8 million | $74.5 million | | Earnings Per Share (EPS) | $4.66 | $4.59 | | Retail Gross Margin | 38.1% | 39.1% | | Operating Expenses (% of Sales) | 28.7% | 29.1% | | Ending Inventory Growth | +2% | - | Sales | Sales Category | Q2 2025 (13 weeks) | Q2 2024 (13 weeks) | | :--- | :--- | :--- | | Net Sales (incl. CDI) | $1.514 billion | $1.490 billion | | Total Retail Sales | $1.447 billion | $1.426 billion | - Stronger performing categories included juniors' and children's apparel, and ladies' accessories and lingerie[4] - Home and furniture was the weakest performing category during the quarter[4] Gross Margin | Margin Type | Q2 2025 (% of sales) | Q2 2024 (% of sales) | | :--- | :--- | :--- | | Consolidated Gross Margin | 36.6% | 37.6% | | Retail Gross Margin | 38.1% | 39.1% | - Retail gross margin performance varied by category, with moderate increases in shoes, slight increases in ladies' accessories and lingerie, but a significant decrease in ladies' apparel[7] - Inventory increased 2% year-over-year as of August 2, 2025[8] Selling, General & Administrative (SG&A) Expenses | Expense Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Consolidated SG&A | $434.2 million | $433.6 million | | SG&A as % of Sales | 28.7% | 29.1% | - Operating expenses remained relatively flat, with savings in payroll expense being offset by increases in other expense categories[9] Year-to-Date (26 Weeks) Fiscal 2025 Performance Year-to-date fiscal 2025 performance was flat in sales, with net income declining to $236.7 million and EPS falling to $15.08 Key Highlights | Metric | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | Total Retail Sales Growth | Flat | - | | Comparable Store Sales Growth | Flat | - | | Net Income | $236.7 million | $254.5 million | | Earnings Per Share (EPS) | $15.08 | $15.68 | | Retail Gross Margin | 41.8% | 42.7% | | Operating Expenses (% of Sales) | 28.1% | 28.3% | Sales | Sales Category | YTD 2025 (26 weeks) | YTD 2024 (26 weeks) | | :--- | :--- | :--- | | Net Sales (incl. CDI) | $3.043 billion | $3.039 billion | | Total Retail Sales | $2.915 billion | $2.919 billion | Gross Margin | Margin Type | YTD 2025 (% of sales) | YTD 2024 (% of sales) | | :--- | :--- | :--- | | Consolidated Gross Margin | 40.3% | 41.2% | | Retail Gross Margin | 41.8% | 42.7% | Selling, General & Administrative (SG&A) Expenses | Expense Metric | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | Consolidated SG&A | $855.9 million | $860.3 million | | SG&A as % of Sales | 28.1% | 28.3% | - The decrease in year-to-date operating expenses was primarily driven by lower payroll expense[15] Share Repurchase and Capital Allocation Dillard's repurchased $107.8 million of Class A Common Stock year-to-date, reducing shares outstanding and leaving $165.2 million authorized | Period | Amount Repurchased | Shares Repurchased | Average Price | | :--- | :--- | :--- | :--- | | Q2 2025 (13 weeks) | $9.8 million | ~24,500 | $398.67 | | YTD 2025 (26 weeks) | $107.8 million | ~300,000 | $359.16 | - As of August 2, 2025, $165.2 million remained under the May 2023 share repurchase authorization[16] - Total shares outstanding (Class A and B) decreased to 15.6 million at the end of Q2 2025, compared to 16.2 million at the same time in 2024[17] Financial Statements This section presents the condensed consolidated statements of income, balance sheets, and cash flows for the reported periods Condensed Consolidated Statements of Income The income statement reflects a slight decrease in net income for both Q2 and year-to-date periods, driven by lower gross margin | (In Millions, Except Per Share Data) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $1,513.8 | $1,489.9 | $3,042.7 | $3,039.0 | | Gross Profit* | $554.5 | $559.6 | $1,225.7 | $1,250.8 | | SG&A Expenses | $434.2 | $433.6 | $855.9 | $860.3 | | Income Before Taxes | $94.6 | $97.1 | $308.3 | $331.9 | | Net Income | $72.8 | $74.5 | $236.7 | $254.5 | | Diluted EPS | $4.66 | $4.59 | $15.08 | $15.68 | Gross Profit calculated as Net Sales - Cost of Sales Condensed Consolidated Balance Sheets The balance sheet shows strong liquidity with cash exceeding $1.0 billion, stable total assets, and reduced long-term debt | (In Millions) | August 2, 2025 | August 3, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $1,012.0 | $946.7 | | Merchandise inventories | $1,219.8 | $1,191.4 | | Total current assets | $2,572.1 | $2,453.5 | | Total assets | $3,684.5 | $3,661.9 | | Liabilities & Equity | | | | Total current liabilities | $958.7 | $780.3 | | Long-term debt | $225.6 | $321.5 | | Stockholders' equity | $1,919.1 | $1,948.9 | | Total liabilities and stockholders' equity | $3,684.5 | $3,661.9 | Condensed Consolidated Statements of Cash Flows Operating cash flow significantly increased to $319.4 million year-to-date, with positive investing cash flow and financing cash used for repurchases | (In Millions) | 26 Weeks Ended 2025 | 26 Weeks Ended 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $319.4 | $175.9 | | Net cash provided by (used in) investing activities | $93.7 | $(29.4) | | Net cash used in financing activities | $(119.0) | $(8.1) | | Increase in cash and cash equivalents | $294.1 | $138.4 | Company Outlook and Forward-Looking Statements This section provides fiscal 2025 estimates and outlines key risks and uncertainties affecting future performance Estimates for Fiscal 2025 Fiscal 2025 estimates project increased capital expenditures to $120 million, stable depreciation, and decreased net interest income | (In Millions) | 2025 Estimated | 2024 Actual | | :--- | :--- | :--- | | Depreciation and amortization | $180 | $178 | | Rentals | $20 | $21 | | Interest and debt (income) expense, net | $(7) | $(14) | | Capital expenditures | $120 | $105 | Forward-Looking Information Forward-looking statements are subject to risks including economic conditions, competition, supply chain issues, and consumer spending changes - The report contains forward-looking statements based on management's current estimates and assumptions, which are not guarantees of future performance[23] - Key risks include inflation, economic recession, competitive pressures from various retail channels, labor shortages, supply chain issues, and changes in consumer spending habits[23][24]