Forget Nvidia and Broadcom. This Forgotten Retail Stock Is a Top Performer in 2025.

Core Insights - Dillard's reported Q3 2025 net sales of $1.47 billion, a 2.8% increase year-over-year, with comparable store sales rising by 3% [1] - The company has shown a compound annual growth rate (CAGR) of 6.28% in earnings over the past decade, while revenues have declined at a CAGR of 0.28% [2] - Dillard's stock has a market cap of $10.2 billion and has increased by 54% year-to-date, with a dividend yield of 4.76% [3] Financial Performance - Gross margins improved to 45.3% in Q3 2025, up from 44.5% the previous year, indicating effective cost control [1] - Earnings per share (EPS) for the quarter were reported at $8.31, a 7.5% year-over-year increase, exceeding consensus estimates of $6.18 [6] - Net cash from operating activities for the nine months ended Nov. 1 was $505.8 million, up from $349.4 million in the prior year [7] Business Operations - Dillard's operates approximately 272 full-line department stores and 28 clearance centers across 30 U.S. states [4] - The company is enhancing its product offerings to attract younger shoppers, focusing on categories with higher margins such as women's clothing and accessories [11] - Dillard's is investing in its online shopping experience, with online sales projected to exceed $400 million for 2025 [12] Market Position and Strategy - Despite challenges in the retail sector, Dillard's has managed to control costs and increase margins, demonstrating commendable performance [9] - The company employs targeted promotions to attract both value-conscious and brand-focused shoppers [13] - Dillard's faces competition from larger retailers like Amazon and Walmart, which have more financial resources [14] Analyst Sentiment - Analysts have rated DDS stock as a "Hold," with a mean target price that has already been surpassed, indicating limited upside potential [16] - The stock is trading at a forward P/E of 20.06 and a P/B of 5.81, both above sector averages, suggesting less room for error in a cooling spending environment [15]