DILLARD'S, INC. (DDS)
SIC breadcrumb: Retail Trade > General Merchandise Stores > SIC 5311 Retail-Department Stores
SEC company page: https://www.sec.gov/edgar/browse/?CIK=28917. Latest filing source: 0000028917-26-000006.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 6,563,336,000 | USD | 2026 | 2026-03-27 |
| Net income | 570,187,000 | USD | 2026 | 2026-03-27 |
| Assets | 3,505,023,000 | USD | 2026 | 2026-03-27 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-27. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000028917.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2011 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 6,418,008,000 | 6,422,676,000 | 6,503,349,000 | 6,343,211,000 | 4,433,185,000 | 6,624,267,000 | 6,996,215,000 | 6,874,420,000 | 6,590,231,000 | 6,563,336,000 | |
| Net income | 169,220,000 | 221,324,000 | 170,263,000 | 111,081,000 | -71,654,000 | 862,473,000 | 891,637,000 | 738,847,000 | 593,476,000 | 570,187,000 | |
| Gross profit | 2,090,726,000 | 2,061,759,000 | 2,064,589,000 | 1,967,542,000 | 1,231,832,000 | 2,745,328,000 | 2,887,483,000 | 2,720,945,000 | 2,563,087,000 | 2,556,761,000 | |
| Diluted EPS | 4.93 | 7.51 | 6.23 | 4.38 | -3.16 | 41.88 | 50.81 | 44.73 | 36.82 | 36.42 | |
| Operating cash flow | 512,922,000 | 274,285,000 | 367,288,000 | 365,074,000 | 252,946,000 | 1,280,020,000 | 948,391,000 | 883,590,000 | 714,127,000 | 717,008,000 | |
| Capital expenditures | 104,824,000 | 130,464,000 | 137,064,000 | 103,383,000 | 60,453,000 | 104,360,000 | 120,105,000 | 132,944,000 | 104,552,000 | 93,382,000 | |
| Dividends paid | 9,787,000 | 9,424,000 | 11,108,000 | 11,520,000 | 13,976,000 | 305,240,000 | 271,313,000 | 338,629,000 | 413,795,000 | 484,876,000 | |
| Share buybacks | 240,171,000 | 223,013,000 | 129,884,000 | 130,928,000 | 102,879,000 | 544,868,000 | 452,853,000 | 281,411,000 | 121,034,000 | 107,756,000 | |
| Assets | 3,898,450,000 | 3,682,703,000 | 3,431,369,000 | 3,430,257,000 | 3,092,515,000 | 3,245,557,000 | 3,329,150,000 | 3,448,906,000 | 3,531,054,000 | 3,505,023,000 | |
| Stockholders' equity | 1,717,417,000 | 1,708,155,000 | 1,678,381,000 | 1,623,259,000 | 1,441,008,000 | 1,451,218,000 | 1,598,638,000 | 1,697,068,000 | 1,796,160,000 | 1,778,970,000 | |
| Cash and cash equivalents | 346,985,000 | 187,028,000 | 123,509,000 | 277,077,000 | 360,339,000 | 716,759,000 | 650,336,000 | 808,287,000 | 717,854,000 | 861,460,000 | |
| Free cash flow | 143,821,000 | 230,224,000 | 261,691,000 | 192,493,000 | 1,175,660,000 | 828,286,000 | 750,646,000 | 609,575,000 | 623,626,000 |
Ratios
| Metric | 2011 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net margin | 2.64% | 3.45% | 2.62% | 1.75% | -1.62% | 13.02% | 12.74% | 10.75% | 9.01% | 8.69% | |
| Return on equity | 9.85% | 12.96% | 10.14% | 6.84% | -4.97% | 59.43% | 55.77% | 43.54% | 33.04% | 32.05% | |
| Return on assets | 4.34% | 6.01% | 4.96% | 3.24% | -2.32% | 26.57% | 26.78% | 21.42% | 16.81% | 16.27% | |
| Current ratio | 1.88 | 1.66 | 1.90 | 1.99 | 2.15 | 1.98 | 2.41 | 2.67 | 2.84 | 2.65 |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-06-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000028917.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q2 | 2022-07-30 | 9.30 | reported discrete quarter | ||
| 2022-Q3 | 2022-10-29 | 10.96 | reported discrete quarter | ||
| 2023-Q1 | 2023-04-29 | 11.85 | reported discrete quarter | ||
| 2023-Q2 | 2023-07-29 | 1,597,418,000 | 131,511,000 | 7.98 | reported discrete quarter |
| 2023-Q3 | 2023-10-28 | 1,504,234,000 | 155,339,000 | 9.49 | reported discrete quarter |
| 2023-Q4 | 2024-02-03 | 2,158,861,000 | 250,502,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-05-04 | 1,572,809,000 | 180,038,000 | 11.09 | reported discrete quarter |
| 2024-Q2 | 2024-08-03 | 1,514,646,000 | 74,483,000 | 4.59 | reported discrete quarter |
| 2024-Q3 | 2024-11-02 | 1,451,160,000 | 124,596,000 | 7.73 | reported discrete quarter |
| 2024-Q4 | 2025-02-01 | 2,051,616,000 | 214,359,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-05-03 | 1,546,971,000 | 163,817,000 | 10.39 | reported discrete quarter |
| 2025-Q2 | 2025-08-02 | 1,536,003,000 | 72,835,000 | 4.66 | reported discrete quarter |
| 2025-Q3 | 2025-11-01 | 1,490,973,000 | 129,810,000 | 8.31 | reported discrete quarter |
| 2025-Q4 | 2026-01-31 | 1,989,389,000 | 203,725,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-05-02 | 1,588,621,000 | 250,553,000 | 16.04 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0000028917-26-000019.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion should be read in conjunction with the condensed consolidated financial statements and the footnotes thereto included elsewhere in this report, as well as the financial and other information included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026. EXECUTIVE OVERVIEW The Company reported a good start to fiscal 2026, marked by a 3% comparable store sales growth for the first quarter supported by a strong, increased retail gross margin of 45.8% of sales. For the three months ended May 2, 2026, the Company reported net income of $250.6 million ($16.04 per share) compared to net income of $163.8 million ($10.39 per share) for the three months ended May 3, 2025. Included in net income for the 13 weeks ended May 2, 2026 is a pre-tax gain on litigation settlement, net of legal fees, of $104.1 million ($79.6 million after tax or $5.10 per share) related to the Company’s favorable settlement of a long-standing lawsuit involving credit card interchange fees. Compared to the prior year first quarter, both total retail sales (which exclude construction sales) and comparable store sales increased 3%. Retail gross margin increased to 45.8% of sales from 45.5% reported in the prior year first quarter. Ending inventory increased 3% at May 2, 2026 compared to May 3, 2025. Selling, general and administrative expenses for the three months ended May 2, 2026 were $444.0 million (28.3% of sales) compared to $421.7 million (27.6% of sales) for the prior year first quarter. The increase of $22.3 million was largely due to higher payroll and payroll-related expenses. Net cash provided by operating activities was $364.0 million for the three months ended May 2, 2026 compared to $232.6 million for the prior year first quarter. As of May 2, 2026, the Company had working capital of $1.760 billion (including cash and cash equivalents of $1.158 billion and short-term investments of $259.7 million) and $521.7 million of total debt outstanding, including one scheduled debt maturity of $96.0 million due July 2026, $225.7 million of long-term debt and $200.0 million of subordinated debentures. The Company operated 272 Dillard’s stores, including 28 clearance centers, and an internet store as of May 2, 2026. 16 Table of Contents Key Performance Indicators We use a number of key indicators of financial condition and operating performance to evaluate our business, including the following: Three Months Ended May 2, May 3, 2026 2025 Net sales (in millions) $ 1,568.4 $ 1,528.9 Retail stores sales trend 3 % (2) % Comparable retail stores sales trend 3 % (1) % Gross margin (in millions) $ 698.1 $ 671.2 Gross margin as a percentage of net sales 44.5 % 43.9 % Retail gross margin as a percentage of retail net sales 45.8 % 45.5 % Selling, general and administrative expenses as a percentage of net sales 28.3 % 27.6 % Cash flow provided by operations (in millions) $ 364.0 $ 232.6 Total retail store count at end of period 272 272 Retail sales per square foot $ 33 $ 32 Retail store inventory trend 3 % 6 % Annualized retail merchandise inventory turnover 2.4 2.3 General Net sales. Net sales includes merchandise sales of comparable and non-comparable stores and revenue recognized on contracts of CDI Contractors, LLC (“CDI”), the Company’s general contracting construction company. Comparable store sales includes sales for those stores which were in operation for a full period in both the most recently completed quarter and the corresponding quarter for the prior fiscal year, including our internet store. Comparable store sales excludes changes in the allowance for sales returns. Non-comparable store sales includes: sales in the current fiscal year from stores opened during the previous fiscal year before they are considered comparable stores; sales from new stores opened during the current fiscal year; sales in the previous fiscal year for stores closed during the current or previous fiscal year that are no longer considered comparable stores; sales in clearance centers; and changes in the allowance for sales returns. Sales occur as a result of interaction with customers across multiple points of contact, creating an interdependence between in-store and online sales. Online orders are fulfilled from both fulfillment centers and retail stores. Additionally, online customers have the ability to buy online and pick up in-store. Retail in-store customers have the ability to purchase items that may be ordered and fulfilled from either a fulfillment center or another retail store location. Online customers may return orders via mail, or customers may return orders placed online to retail store locations. Customers who earn reward points under the private label credit card program may earn and redeem rewards through in-store or online purchases. Service charges and other income. Service charges and other income includes income generated through the Company’s long-term private label credit card marketing and servicing alliance with Citibank, N.A. (“Citibank Alliance”). Other income includes rental income, shipping and handling fees and gift card breakage. Cost of sales. Cost of sales includes the cost of merchandise sold (net of purchase discounts, non-specific margin maintenance allowances and merchandise margin maintenance allowances), bankcard fees, freight to the distribution centers, employee and promotional discounts, shipping to customers and direct payroll for salon personnel. Cost of sales also includes CDI contract costs, which comprise all direct material and labor costs, subcontract costs and those indirect costs related to contract performance, such as indirect labor, employee benefits and insurance program costs. Selling, general and administrative expenses. Selling, general and administrative expenses include buying, occupancy, selling, distribution, warehousing, store and corporate expenses (including payroll and employee benefits), insurance, employment taxes, advertising, management information systems, legal and other corporate level expenses. Buying expenses consist of payroll, employee benefits and travel for design, buying and merchandising personnel. 17 Table of Contents Depreciation and amortization. Depreciation and amortization expenses include depreciation and amortization on property and equipment. Rentals. Rentals includes expenses for store leases, including contingent rent, data processing and other equipment rentals and office space leases. Interest and debt (income) expense, net. Interest and debt (income) expense includes interest, net of interest income from demand deposits and short-term investments and capitalized interest, relating to the Company’s unsecured notes, subordinated debentures and commitment fees and borrowings, if any, under the Company’s credit agreement. Interest and debt expense also includes the amortization of financing costs and interest on finance lease obligations, if any. Other expense. Other expense includes the interest cost and net actuarial loss components of net periodic benefit costs related to the Company’s unfunded, nonqualified defined benefit plan and charges related to the write off of certain deferred financing fees in connection with the amendment and extension of the Company's secured revolving credit facility, if any. Gain on litigation settlement. Gain on litigation settlement includes the proceeds received, net of legal expenses, from the settlement of credit card interchange fee litigation. Gain on disposal of assets. Gain on disposal of assets includes the net gain or loss on the sale or disposal of property and equipment, as well as gains from insurance proceeds in excess of the cost basis of insured assets, if any. Seasonality Our business, like many other retailers, is subject to seasonal influences, with a significant portion of sales and income typically realized during the last quarter of our fiscal year due to the holiday season. Because of the seasonality of our business, results from any quarter are not necessarily indicative of the results that may be achieved for a full fiscal year. 18 Table of Contents RESULTS OF OPERATIONS The following table sets forth the results of operations as a percentage of net sales for the periods indicated (percentages may not foot due to rounding): Three Months Ended May 2, May 3, 2026 2025 Net sales 100.0 % 100.0 % Service charges and other income 1.3 1.2 101.3 101.2 Cost of sales 55.5 56.1 Selling, general and administrative expenses 28.3 27.6 Depreciation and amortization 2.8 2.9 Rentals 0.2 0.3 Interest and debt (income) expense, net 0.0 (0.1) Other expense 0.3 0.4 Gain on litigation settlement (6.6) 0.0 Gain on disposal of assets 0.0 0.0 Income before income taxes and equity in earnings of joint ventures 20.9 14.0 Income taxes 4.9 3.3 Equity in earnings of joint ventures 0.0 0.0 Net income 16.0 % 10.7 % Net Sales Three Months Ended May 2, May 3, (in thousands of dollars) 2026 2025 $ Change Net sales: Retail operations segment $ 1,518,165 $ 1,467,937 $ 50,228 Construction segment 50,262 60,926 (10,664) Total net sales $ 1,568,427 $ 1,528,863 $ 39,564 19 Table of Contents The percent change by segment and product category in the Company’s sales for the three months ended May 2, 2026 compared to the three months ended May 3, 2025 as well as the sales percentage by segment and product category to total net sales for the three months ended May 2, 2026 are as follows: % Change % of 2026 - 2025 Net Sales Retail operations segment Cosmetics 0.9 % 15 % Ladies’ apparel 1.9 23 Ladies’ accessories and lingerie 6.6 13 Juniors’ and children’s apparel 2.9 10 Men’s apparel and accessories 3.6 18 Shoes 5.1 15 Home and furniture 8.4 3 97 Construction segment (17.5) 3 Total 100 % Net sales from the retail operations segment increased $50.2 million, or approximately 3%, and sales in comparable stores increased approximately 3% during the three months ended May 2, 2026 compared to the three months ended May 3, 2025. Sales in home and furniture, ladies’ accessories and lingerie and shoes increased significantly. Sales in men’s apparel and accessories, juniors’ and children’s apparel and ladies’ apparel increased moderately, while sales in cosmetics increased slightly. The number of sales transactions decreased 3% for the three months ended May 2, 2026 compared to the three months ended May 3, 2025, while the average dollars per sales transaction increased 7%. We recorded a return asset of $13.4 million and $13.9 million and an allowance for sales returns of $26.6 million and $27.4 million as of May 2, 2026 and May 3, 2025, respectively. During the three months ended May 2, 2026, net sales from the construction segment decreased $10.7 million, or approximately 18%, compared to the three months ended May 3, 2025 due to a decrease in construction activity. The remaining performance obligations related to executed construction contracts totaled $176.9 million as of May 2, 2026, increasing approximately 26% from [Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
At January 31, 2026, Dillard’s, Inc. operates 271 retail department stores spanning 30 states and an Internet store at dillards.com. The Company also operates a general contracting construction company, CDI Contractors, LLC (“CDI”), a portion of whose business includes constructing and remodeling stores for the Company, which is a reportable segment separate from our retail operations.
In accordance with the National Retail Federation fiscal reporting calendar and our bylaws, the fiscal 2025 reporting period presented and discussed below ended January 31, 2026 and contained 52 weeks. The fiscal 2024 reporting period presented and discussed below ended February 1, 2025 and contained 52 weeks. The fiscal 2023 reporting period presented and discussed below ended February 3, 2024 and contained 53 weeks. For comparability purposes, where noted, some of the information discussed below is based upon comparison of the 52 weeks ended February 1, 2025 to the 52 weeks ended February 3, 2024. Additionally, some of the information discussed below is based upon comparison of the 52 weeks ended January 27, 2024 to the 52 weeks ended January 28, 2023.
A discussion regarding results of operations and analysis of financial condition for the year ended February 1, 2025 as compared to the year ended February 3, 2024 is included in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended February 1, 2025.
EXECUTIVE OVERVIEW
Fiscal 2025
We achieved a respectable performance for fiscal year 2025, reporting net income of $570.2 million. In a rapidly changing merchandising environment characterized by unpredictable costs, we focused on maintaining gross margin performance. Our retail gross margin stood at 40.8% while sales remained unchanged (as a percentage) compared to fiscal 2024. We kept shareholder return a priority. We paid $484.9 million in dividends, highlighted by the largest special dividend in our history. Additionally, we repurchased $107.8 million of stock. Following these efforts, we held approximately $1.1 billion in cash and cash equivalents and short-term investments at year end and remained in a strong financial position.
Total retail sales for fiscal 2025 and fiscal 2024 were $6.232 billion and $6.219 billion, respectively. Total retail sales were unchanged as a percentage for fiscal 2025 compared to fiscal 2024. Sales in comparable stores for the same period were also unchanged.
Consolidated gross margin for both fiscal 2025 and fiscal 2024 was 39.5% of sales. Retail gross margin for fiscal 2025 was 40.8% of sales compared to 41.0% of sales for fiscal 2024. Inventory increased 2% at January 31, 2026 compared to February 1, 2025.
Consolidated selling, general and administrative expenses (“operating expenses”) for fiscal 2025 were $1,759.2 million (27.2% of sales) compared to $1,731.2 million (26.7% of sales) for fiscal 2024. The increase in operating expenses is primarily due to increased payroll and payroll-related expenses.
We reported net income for fiscal 2025 of $570.2 million, or $36.42 per share, compared to $593.5 million, or $36.82 per share, for fiscal 2024. Included in net income for fiscal 2025 are the following items:
●
a pretax gain of $20.4 million ($15.7 million after tax or $1.00 per share) primarily related to the sale of five properties
●
federal and state income tax benefits of $35.0 million ($2.24 per share) due to a deduction related to that portion of the special dividend of $30.00 per share that was paid to the Dillard's, Inc. Investment and Employee Stock Ownership Plan during the year
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Table of Contents
Included in net income for fiscal 2024 are federal and state income tax benefits of $30.8 million ($1.91 per share) due to a deduction related to that portion of the special dividend of $25.00 per share that was paid to the Dillard's, Inc. Investment and Employee Stock Ownership Plan during the year.
Cash flow from operations was $717.0 million for fiscal 2025 and $714.1 million for fiscal 2024. During fiscal 2025, we returned a record $592.6 million of cash to stockholders in the form of dividends and share repurchases. At January 31, 2026, authorization of $165.2 million remained under the share repurchase program.
At January 31, 2026, we had working capital of $1,484.5 million (including cash and cash equivalents and short-term investments totaling $1,073.0 million) and total debt outstanding of $521.7 million excluding operating lease liabilities.
Key Performance Indicators
We use a number of key indicators of financial condition and operating performance to evaluate our business, including the following:
Fiscal 2025
Fiscal 2024
Fiscal 2023
Net sales (in millions)
$
6,473.6
$
6,482.6
$
6,752.1
Gross margin (in millions)
$
2,556.8
$
2,563.1
$
2,720.9
Gross margin as a percentage of net sales
39.5
%
39.5
%
40.3
%
Retail gross margin as a percentage of retail net sales
40.8
%
41.0
%
41.8
%
Selling, general and administrative expenses as a percentage of net sales
27.2
%
26.7
%
25.4
%
Cash flow provided by operations (in millions)
$
717.0
$
714.1
$
883.6
Total retail store count at end of period
271
272
273
Retail sales per square foot
$
138
$
137
$
143
Retail stores sales trend
—
%
(2)
%
*
(5)
%
**
Comparable retail store sales trend
—
%
(3)
%
*
(4)
%
**
Retail store inventory trend
2
%
7
%
(2)
%
Retail merchandise inventory turnover
2.6
2.6
2.8
*
Based upon the 52 weeks ended February 1, 2025 and the 52 weeks ended February 3, 2024.
**
Based upon the 52 weeks ended January 27, 2024 and the 52 weeks ended January 28, 2023.
Trends and Uncertainties
Fluctuations in the following key trends and uncertainties may have a material effect on our operating results.
●
Cash flow—Cash from operating activities is a primary source of our liquidity that is adversely affected when the retail industry faces economic challenges. Furthermore, operating cash flow can be negatively affected by competitive factors.
●
Pricing—If our customers do not purchase our merchandise offerings in sufficient quantities, we respond by taking markdowns. If we have to reduce our retail selling prices, the gross margin on our consolidated statement of operations will correspondingly decrease, thus reducing our net income and cash flow.
●
Success of brand—The success of our exclusive brand merchandise as well as merchandise we source from national vendors is dependent upon customer fashion preferences and how well we can predict and anticipate trends.
●
Sourcing—Our store merchandise selection is dependent upon our ability to acquire appealing products from a number of sources. Our ability to attract and retain compelling vendors as well as in-house design talent, the adequacy and stable availability of materials and production facilities from which we source our
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Table of Contents
merchandise and the speed at which we can respond to customer trends and preferences all have a significant impact on our merchandise mix and, thus, our ability to sell merchandise at profitable prices.
●
Store growth—Our ability to open new stores is dependent upon a number of factors, such as the identification of suitable markets and locations and the availability of shopping developments, especially in a weak economic environment. Store growth can be further hindered by mall attrition and subsequent closure of underperforming properties.
At present, a number of economic and geopolitical factors are affecting the U.S. and world economies (including countries from which we source some of our merchandise): war and other armed conflicts (including the ongoing conflict with Iran and/or Iranian sponsored actors, other conflicts in the Middle East and the ongoing conflict in Ukraine and the resulting sanctions imposed on Russia by the U.S. and other countries), fluctuating energy prices, trade restrictions (including tariffs), inflation and the continuing impact of elevated United States wages. The extent to which our business will be affected by these factors depends on our customer’s continuing ability and willingness to accept price increases. Accordingly, the related financial impact to fiscal 2026 from these factors cannot be reasonably estimated at this time.
Seasonality and Inflation
Our business, like many other retailers, is subject to seasonal influences, with a significant portion of sales and income typically realized during the last quarter of our fiscal year due to the holiday season. Because of the seasonality of our business, results from any quarter are not necessarily indicative of the results that may be achieved for a full fiscal year.
The Company was affected by inflation during fiscal 2025 and 2024. Our business will likely be affected by inflation in fiscal 2026, the extent of which depends on our customers’ continuing ability and willingness to accept price increases.
General
Net sales. Net sales includes merchandise sales of comparable and non-comparable stores and revenue recognized on contracts of CDI, the Company’s general contracting construction company. Comparable store sales includes sales for those stores which were in operation for a full period in both the most recently completed quarter and the corresponding quarter for the prior fiscal year, including our internet store. Comparable store sales excludes changes in the allowance for sales returns. Non-comparable store sales includes: sales in the current fiscal year from stores opened during the previous fiscal year before they are considered comparable stores; sales from new stores opened during the current fiscal year; sales in the previous fiscal year for stores closed during the current or previous fiscal year that are no longer considered comparable stores; sales in clearance centers; and changes in the allowance for sales returns.
Sales occur as a result of interaction with customers across multiple points of contact, creating an interdependence between in-store and online sales. Online orders are fulfilled from both fulfillment centers and retail stores. Additionally, online customers have the ability to buy online and pick up in-store. Retail in-store customers have the ability to purchase items that may be ordered and fulfilled from either a fulfillment center or another retail store location. Online customers may return orders via mail, or customers may return orders placed online to retail store locations. Customers who earn reward points under the private label credit card program may earn and redeem rewards through in-store or online purchases.
Service charges and other income. Service charges and other income includes income generated through the Company’s private label credit card portfolio alliances. These alliances include the former marketing and servicing alliance with Wells Fargo Bank, N.A. (“Wells Fargo Alliance”), which terminated in September 2024, and the Company’s new long-term marketing and servicing alliance with Citibank, N.A (“Citibank Alliance”), which replaced the Wells Fargo Alliance upon its termination. Other income includes rental income, shipping and handling fees and gift card breakage.
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Cost of sales. Cost of sales includes the cost of merchandise sold (net of purchase discounts, non-specific margin maintenance allowances and merchandise margin maintenance allowances), bankcard fees, freight to the distribution centers, employee and promotional discounts, shipping to customers and direct payroll for salon personnel. Cost of sales also includes CDI contract costs, which comprise all direct material and labor costs, subcontract costs and those indirect costs related to contract performance, such as indirect labor, employee benefits and insurance program costs.
Selling, general and administrative expenses. Selling, general and administrative expenses include buying, occupancy, selling, distribution, warehousing, store and corporate expenses (including payroll and employee benefits), insurance, employment taxes, advertising, management information systems, legal and other corporate level expenses. Buying expenses consist of payroll, employee benefits and travel for design, buying and merchandising personnel.
Depreciation and amortization. Depreciation and amortization expenses include depreciation and amortization on property and equipment.
Rentals. Rentals includes expenses for store leases, including contingent rent, data processing and other equipment rentals and office space leases.
Interest and debt (income) expense, net. Interest and debt (income) expense, net includes interest, net of interest income from demand deposits and short-term investments and capitalized interest, relating to the Company’s unsecured notes, subordinated debentures and commitment fees and borrowings, if any, under the Company’s credit agreement. Interest and debt expense also includes the amortization of financing costs and interest on finance lease obligations, if any.
Other expense. Other expense includes the interest cost and net actuarial loss components of net periodic benefit costs related to the Company’s unfunded, nonqualified defined benefit plan and charges related to the write off of certain deferred financing fees in connection with the amendment and extension of the Company’s secured revolving credit facility, if any.
Gain on disposal of assets. Gain on disposal of assets includes the net gain or loss on the sale or disposal of property and equipment, as well as gains from insurance proceeds in excess of the cost basis of insured assets, if any.
Critical Accounting Policies and Estimates
The Company’s significant accounting policies are also described in Note 1 in the “Notes to Consolidated Financial Statements” in Item 8 hereof. As disclosed in that note, the preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions about future events that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company evaluates its estimates and judgments on an ongoing basis and predicates those estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. Since future events and their effects cannot be determined with absolute certainty, actual results could differ from those estimates.
Management of the Company believes the following critical accounting policies, among others, affect its more significant judgments and estimates used in preparation of the Company’s consolidated financial statements.
Merchandise inventory. All of the Company’s inventories are valued at the lower of cost or market using the last-in, first-out (“LIFO”) inventory method. Approximately 95% of the Company’s inventories are valued using the LIFO retail inventory method. Under the retail inventory method, the valuation of inventories at cost and the resulting gross margins are calculated by applying a cost to retail ratio to the retail value of inventories. The retail inventory method is an averaging method that is widely used in the retail industry due to its practicality. Inherent in the retail inventory method calculation are certain significant management judgments including, among others, merchandise markon, markups and markdowns, which significantly impact the ending inventory valuation at cost as well as the resulting gross margins. During periods of deflation, inventory values on the first-in, first-out (“FIFO”) retail inventory method may be lower than the LIFO retail inventory method. Additionally, inventory values at LIFO cost may be in excess of net
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realizable value. At January 31, 2026 and February 1, 2025, merchandise inventories valued at LIFO, including adjustments as necessary to record inventory at the lower of cost or market, approximated the cost of such inventories using the FIFO retail inventory method. The application of the LIFO retail inventory method did not result in the recognition of any LIFO charges or credits affecting cost of sales for fiscal 2025, 2024 or 2023. A 1% change in the dollar amount of markdowns would have impacted net income by approximately $8 million for fiscal 2025.
The Company regularly records a provision for estimated shrinkage, thereby reducing the carrying value of merchandise inventory. Complete physical inventories of the Company’s stores and warehouses are generally performed no less frequently than annually, with the recorded amount of merchandise inventory being adjusted to coincide with these physical counts. The differences between the estimated amounts of shrinkage and the actual amounts realized during the past three years have not been material.
Revenue recognition. The Company’s retail operations segment recognizes revenue upon the sale of merchandise to its customers, net of anticipated returns of merchandise. The asset and liability for sales returns are based on historical evidence of our return rate. We recorded an allowance for sales returns of $20.1 million and $21.5 million and return assets of $12.1 million and $13.0 million as of January 31, 2026 and February 1, 2025, respectively. The return asset and the allowance for sales returns are recorded in the consolidated balance sheets in other current assets and trade accounts payable and accrued expenses, respectively. Adjustments to earnings resulting from revisions to estimates on our sales return provision were not material for fiscal 2025, 2024 and 2023.
The Company’s share of income under the Citibank Alliance and the former Wells Fargo Alliance involving the Dillard’s branded private label credit cards is included as a component of service charges and other income. The Company recognized income of $39.6 million, $54.1 million and $67.2 million from the alliances in fiscal 2025, 2024 and 2023, respectively. The Company participates in the marketing of the private label credit cards, which includes the cost of customer reward programs. Through the reward programs, customers earn points that are redeemable for discounts on future purchases. The Company defers a portion of its net sales upon the sale of merchandise to its customer reward program members that is recognized in net sales when the reward is redeemed or expired at a future date.
Revenues from CDI construction contracts are generally measured based on the ratio of costs incurred to total estimated contract costs (the “cost-to-cost method”). Some of our contracts with customers contain multiple performance obligations. For these contracts, we account for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations based on stand-alone selling prices. Construction contracts are often modified to account for changes in contract specifications and requirements. We consider contract modifications to exist when the modification either creates new or changes the existing enforceable rights and obligations. Most of our contract modifications are for goods and services that are not distinct from the existing contracts; therefore, the modifications are accounted for as if they were part of the existing contract. The effect of a contract modification on the transaction price and our measure of progress for the performance obligation for which it relates, is recognized as an adjustment to revenue on a cumulative catch-up basis. The length of each contract varies but is typically nine to eighteen months. The progress towards completion is determined by relating the actual costs of work performed to date to the current estimated total costs of the respective contracts. Estimated contract losses are recognized in full when determined.
Construction contracts give rise to accounts receivable, contract assets and contract liabilities. We record accounts receivable based on amounts billed to customers. We also record costs and estimated earnings in excess of billings on uncompleted contracts (contract assets) and billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities) in other current assets and trade accounts payable and accrued expenses, respectively, on the consolidated balance sheets.
Vendor allowances. The Company receives concessions from vendors through a variety of programs and arrangements, including cooperative advertising, payroll reimbursements and margin maintenance programs.
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Cooperative advertising allowances are reported as a reduction of advertising expense in the period in which the advertising occurred. We are not able to assess the impact of vendor advertising allowances on creating additional revenues, as such allowances do not directly generate revenues for our stores.
Payroll reimbursements are reported as a reduction of payroll expense in the period in which the reimbursement occurred.
Amounts of margin maintenance allowances are recorded only when an agreement has been reached with the vendor and the collection of the concession is deemed probable. All such merchandise margin maintenance allowances are recognized as a reduction of cost purchases. Under the retail inventory method, a portion of these allowances reduces cost of goods sold and a portion reduces the carrying value of merchandise inventory.
Insurance accruals. The Company’s consolidated balance sheets include liabilities with respect to claims for self-insured workers’ compensation (with a self-insured retention of $4 million per claim) and general liability (with a self-insured retention of $2 million per claim). The Company’s retentions are insured through a wholly-owned captive insurance subsidiary. The Company estimates the required liability of such claims, utilizing an actuarial method, based upon various assumptions, which include, but are not limited to, our historical loss experience, projected loss development factors, actual payroll and other data. The required liability is also subject to adjustment in the future based upon the changes in claims experience, including changes in the number of incidents (frequency) and changes in the ultimate cost per incident (severity). As of January 31, 2026 and February 1, 2025, insurance accruals of $40.3 million and $40.1 million, respectively, were recorded in trade accounts payable and accrued expenses and other liabilities. A 10% change in our self-insurance reserve would have affected net income by approximately $3 million for fiscal 2025.
Long-lived assets. The Company’s judgment regarding the existence of impairment indicators is based on market and operational performance. We assess the impairment of long-lived assets, primarily fixed assets and operating lease assets, whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors we consider important which could trigger an impairment review include the following:
●
Significant changes in the manner of our use of assets or the strategy for the overall business;
●
Significant negative industry or economic trends;
●
A current-period operating or cash flow loss combined with a history of operating or cash flow losses; and
●
Store closings.
If impairment indicators are identified, the Company performs an analysis of the anticipated undiscounted future net cash flows of the related long-lived assets. If the carrying value of the related asset exceeds the fair value, the carrying value is reduced to its fair value. Various factors including future sales growth, profit margins and real estate values are included in this analysis. To the extent these future projections, the Company’s strategies or market conditions change, the conclusion regarding impairment may differ from the current estimates.
Income taxes. Temporary differences arising from differing treatment of income and expense items for tax and financial reporting purposes result in deferred tax assets and liabilities that are recorded on the balance sheet. These balances, as well as income tax expense, are determined through management’s estimations, interpretation of tax law for multiple jurisdictions and tax planning. If the Company’s actual results differ from estimated results due to changes in tax laws, changes in store locations, settlements of tax audits or tax planning, the Company’s effective tax rate and tax balances could be affected.
As such, these estimates may require adjustment in the future as additional information becomes available or as circumstances change. Changes in the Company’s assumptions and judgments can materially affect amounts recognized in the consolidated balance sheets and statements of income.
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The total amount of unrecognized tax benefits as of January 31, 2026 was $7.5 million, of which, $6.2 million would, if recognized, affect the Company’s effective tax rate. The total amount of unrecognized tax benefits as of February 1, 2025 was $8.0 million, of which $5.8 million would, if recognized, affect the Company’s effective tax rate. The Company classifies accrued interest expense and penalties relating to income tax in the consolidated financial statements as income tax expense. The total amounts of interest and penalties were not material.
The fiscal tax years that remain subject to examination for the federal tax jurisdiction and major state tax jurisdictions are 2022 and forward. At this time, the Company does not expect the results from any income tax audit to have a material impact on the Company’s consolidated financial statements.
Pension obligations. The discount rate that the Company utilizes for determining future pension obligations is based on the FTSE Above Median Pension yield curve on its annual measurement date as of the end of each fiscal year and is matched to the future expected cash flows of the benefit plans by semi-annual periods. The discount rate decreased to 5.4% as of January 31, 2026 from 5.6% as of February 1, 2025. We believe that these assumptions have been appropriate and that, based on these assumptions, the pension liability of $314.0 million is appropriately stated as of January 31, 2026; however, actual results may differ materially from those estimated and could have a material impact on our consolidated financial statements. A 50 basis point change in the discount rate would increase or decrease the pension liability by approximately $16 million. The Company expects to make a contribution to the pension plan of approximately $8.5 million in fiscal 2026. The Company expects pension expense to be approximately $26.1 million in fiscal 2026.
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RESULTS OF OPERATIONS
The following table sets forth the results of operations and percentage of net sales, for the periods indicated (percentages may not foot due to rounding):
For the years ended
January 31, 2026
February 1, 2025
February 3, 2024
(in thousands of dollars)
Amount
% of Net Sales
Amount
% of Net Sales
Amount
% of Net Sales
Net sales
$
6,473,623
100.0
%
$
6,482,636
100.0
%
$
6,752,053
100.0
%
Service charges and other income
89,713
1.4
107,595
1.7
122,367
1.8
6,563,336
101.4
6,590,231
101.7
6,874,420
101.8
Cost of sales
3,916,862
60.5
3,919,549
60.5
4,031,108
59.7
Selling, general and administrative expenses
1,759,236
27.2
1,731,234
26.7
1,717,415
25.4
Depreciation and amortization
179,341
2.8
177,867
2.7
179,573
2.7
Rentals
19,223
0.3
21,419
0.3
21,569
0.3
Interest and debt (income) expense, net
(6,230)
(0.1)
(13,695)
(0.2)
(4,600)
(0.1)
Other expense
20,797
0.3
24,631
0.4
18,791
0.3
Gain on disposal of assets
(20,373)
(0.3)
(475)
—
(6,053)
(0.1)
Income before income taxes and equity in earnings of joint ventures
694,480
10.7
729,701
11.3
916,617
13.6
Income taxes
124,700
1.9
136,225
2.1
177,770
2.6
Equity in earnings of joint ventures
407
—
—
—
—
—
Net income
$
570,187
8.8
%
$
593,476
9.2
%
$
738,847
10.9
%
Sales
(in thousands of dollars)
Fiscal 2025
Fiscal 2024
Fiscal 2023
Net sales:
Retail operations segment
$
6,231,533
$
6,218,525
$
6,479,580
Construction segment
242,090
264,111
272,473
Total net sales
$
6,473,623
$
6,482,636
$
6,752,053
The percent change by segment and product category in the Company’s sales for the past two years is as follows:
Percent Change
Fiscal 2025 - 2024
Fiscal 2024 - 2023
Fiscal 2024 - 2023*
Retail operations segment
Cosmetics
(1.5)
%
1.4
%
3.0
%
Ladies’ apparel
(0.4)
(4.7)
(2.9)
Ladies’ accessories and lingerie
3.2
(2.7)
(1.3)
Juniors’ and children’s apparel
2.9
(5.7)
(3.9)
Men’s apparel and accessories
(0.2)
(7.1)
(5.6)
Shoes
(0.3)
(6.1)
(4.2)
Home and furniture
(1.9)
(0.1)
1.2
Construction segment
(8.3)
(3.1)
N/A
*
Based upon the 52 weeks ended February 1, 2025 and 52 weeks ended February 3, 2024.
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2025 Compared to 2024
Net sales from the retail operations segment increased $13.0 million during fiscal 2025 compared to fiscal 2024, remaining flat as a percentage in total store sales. Sales in comparable stores remained flat for fiscal 2025 compared to fiscal 2024. During the same periods, sales of ladies’ accessories and lingerie and juniors’ and children’s apparel increased moderately. Sales of cosmetics decreased slightly, while sales of home and furniture decreased moderately. Sales were essentially unchanged in all other product categories.
The number of sales transactions during fiscal 2025 decreased 4% over fiscal 2024, while the average dollars per sales transaction increased 4%.
Net sales from the construction segment decreased $22.0 million or 8.3% during fiscal 2025 compared to fiscal 2024 due to a decrease in construction activity. The remaining performance obligations related to executed construction contracts totaled $140.8 million at January 31, 2026, decreasing approximately 31% from February 1, 2025.
Exclusive Brand Merchandise
Sales penetration of exclusive brand merchandise for fiscal 2025, 2024 and 2023 was 22.3%, 22.7% and 23.5% of total net sales, respectively.
Service Charges and Other Income
(in thousands of dollars)
Fiscal 2025
Fiscal 2024
Fiscal 2023
Service charges and other income:
Retail operations segment
Income from the Citibank Alliance and former Wells Fargo Alliance
$
39,616
$
54,073
$
67,227
Shipping and handling income
35,052
36,637
40,134
Other
14,926
16,688
14,719
89,594
107,398
122,080
Construction segment
119
197
287
Total service charges and other income
$
89,713
$
107,595
$
122,367
Service charges and other income includes the income from the Citibank Alliance and former Wells Fargo Alliance. During the third quarter of fiscal 2024, the Company transitioned to its new agreement with Citi to provide a credit card program for Dillard’s customers, replacing the existing Wells Fargo Alliance. Income from the alliances decreased $14.5 million in fiscal 2025 compared to fiscal 2024, primarily from decreases in finance charges and late fees mainly resulting from lower average net receivables. While future cash flows under the Citibank Alliance are difficult to predict, the Company and Citi remain focused on collaborative strategies to enhance customer awareness and acceptance of the program’s product offerings in an effort to improve the financial performance of this alliance; however, there can be no assurance that these efforts will significantly impact the performance.
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Gross Margin
(in thousands of dollars)
Fiscal 2025
Fiscal 2024
Fiscal 2023
Gross margin:
Retail operations segment
$
2,544,335
$
2,550,665
$
2,709,071
Construction segment
12,426
12,422
11,874
Total gross margin
$
2,556,761
$
2,563,087
$
2,720,945
Gross margin as a percentage of segment net sales:
Retail operations segment
40.8
%
41.0
%
41.8
Construction segment
5.1
4.7
4.4
Total gross margin as a percentage of net sales
39.5
39.5
40.3
2025 Compared to 2024
Consolidated gross margin was essentially unchanged while gross margin from retail operations decreased 20 basis points of sales during fiscal 2025 compared to fiscal 2024. During fiscal 2025, gross margin decreased slightly in ladies’ apparel and men’s apparel and accessories, while gross margin increased slightly in ladies’ accessories and lingerie and shoes. Gross margin was essentially flat in all other product categories. Retail store inventory increased 2% at January 31, 2026 compared to February 1, 2025.
Inflation and changing trade restrictions, including tariffs, pose a risk to our operations. The extent to which our business will be affected by these factors depends on our customers’ continuing ability and willingness to accept higher prices and the effectiveness of our ongoing initiatives to manage these fluctuating costs.
Selling, General and Administrative Expenses (“SG&A”)
(in thousands of dollars)
Fiscal 2025
Fiscal 2024
Fiscal 2023
SG&A:
Retail operations segment
$
1,749,678
$
1,720,907
$
1,707,793
Construction segment
9,558
10,327
9,622
Total SG&A
$
1,759,236
$
1,731,234
$
1,717,415
SG&A as a percentage of segment net sales:
Retail operations segment
28.1
%
27.7
%
26.4
%
Construction segment
3.9
3.9
3.5
Total SG&A as a percentage of net sales
27.2
26.7
25.4
2025 Compared to 2024
SG&A increased $28.0 million and 50 basis points of sales during fiscal 2025 compared to fiscal 2024. The increase in SG&A during fiscal 2025 was primarily attributable to a $13.1 million increase in payroll and payroll-related expenses (increasing to $1,244.5 million for fiscal 2025 from $1,231.4 million for fiscal 2024) and an $8.7 million increase in services purchased. Inflation continues to be a concern for management, impacting many areas of our operating expenses.
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Interest and Debt (Income) Expense, Net
(in thousands of dollars)
Fiscal 2025
Fiscal 2024
Fiscal 2023
Interest and debt (income) expense, net:
Retail operations segment
$
(5,212)
$
(12,805)
$
(3,927)
Construction segment
(1,018)
(890)
(673)
Total interest and debt (income) expense, net
$
(6,230)
$
(13,695)
$
(4,600)
2025 Compared to 2024
Net interest and debt (income) expense decreased $7.5 million in fiscal 2025 compared to fiscal 2024 primarily due to a decrease in interest income, mainly from lower interest rates, and capitalized interest. Interest income was $47.2 million and $53.6 million in fiscal 2025 and fiscal 2024, respectively.
Other Expense
(in thousands of dollars)
Fiscal 2025
Fiscal 2024
Fiscal 2023
Other expense:
Retail operations segment
$
20,797
$
24,631
$
18,791
Construction segment
—
—
—
Total other expense
$
20,797
$
24,631
$
18,791
2025 Compared to 2024
Other expense decreased $3.8 million in fiscal 2025 compared to fiscal 2024 primarily due to a decrease in the amortization of the net actuarial loss related to the Company’s pension plan.
Gain on Disposal of Assets
(in thousands of dollars)
Fiscal 2025
Fiscal 2024
Fiscal 2023
Gain on disposal of assets:
Retail operations segment
$
(20,353)
$
(442)
$
(6,030)
Construction segment
(20)
(33)
(23)
Total gain on disposal of assets
$
(20,373)
$
(475)
$
(6,053)
Fiscal 2025
During fiscal 2025, the Company received proceeds of $25.7 million primarily from the sale of five properties, resulting in a gain of $20.4 million that was recorded in gain on disposal of assets.
Income Taxes
The Company’s estimated federal and state effective income tax rate was 17.9% in fiscal 2025, 18.7% in fiscal 2024 and 19.4% in fiscal 2023. The Company expects the fiscal 2026 federal and state effective income tax rate to approximate 23%.
Fiscal 2025
During fiscal 2025, income taxes included federal and state tax benefits of $35.0 million due to the deduction related to that portion of the special dividend of $30.00 per share that was paid to the Dillard’s, Inc. Investment and Employee Stock Ownership Plan on January 5, 2026.
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On July 4, 2025, H.R.1 – One Big Beautiful Bill Act (Public Law No. 119-21) was signed into law. Notable provisions include restoration of 100% bonus depreciation, full expensing of domestic research expenditures, and modifications to interest expense limitations and charitable contribution deduction thresholds. Accounting Standards Codification §740, Accounting for Income Taxes, requires recognition of the effects of changes in tax law during the period of enactment. The effects of these provisions did not have, and are not expected to have, a material impact on the Company’s financial results.
Fiscal 2024
During fiscal 2024, income taxes included federal and state tax benefits of $30.8 million due to the deduction related to that portion of the special dividend of $25.00 per share that was paid to the Dillard’s, Inc. Investment and Employee Stock Ownership Plan on January 6, 2025.
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LIQUIDITY AND CAPITAL RESOURCES
The Company’s current non-operating priorities for its use of cash are strategic investments to enhance the value of existing properties, stock repurchases and dividend payments to stockholders.
Cash flows for the Company’s most recent three fiscal years were as follows:
Dollar Change
(in thousands of dollars)
Fiscal 2025
Fiscal 2024
Fiscal 2023
2025 - 2024
2024 - 2023
Operating activities
$
717,008
$
714,127
$
883,590
$
2,881
$
(169,463)
Investing activities
22,537
(269,731)
(115,594)
292,268
(154,137)
Financing activities
(595,939)
(534,829)
(620,040)
(61,110)
85,211
Total Increase (Decrease) in Cash and Cash Equivalents
$
143,606
$
(90,433)
$
147,956
$
234,039
$
(238,389)
Operating Activities
The primary source of the Company’s liquidity is, and historically has been, cash flows from operations. Due to the seasonality of the Company’s business, we have historically realized a significant portion of the cash flows from operating activities during the second half of the fiscal year. Retail operations sales are the key operating cash component, providing 94.9%, 94.4% and 94.3% of total revenues in fiscal 2025, 2024 and 2023, respectively.
Net cash flows from operations increased $2.9 million during fiscal 2025 compared to fiscal 2024.
Operating cash inflows also include the Company’s income from the Citibank Alliance, former Wells Fargo Alliance and cash distributions from joint ventures (excluding returns of investments), if any. Operating cash outflows include net payments to vendors for inventory, services and supplies, payments to employees and payments of interest and taxes.
Wells Fargo Bank, N.A. (“Wells Fargo”) previously owned and managed Dillard’s private label credit cards, including credit cards co-branded with American Express under a long-term marketing and servicing alliance (“Wells Fargo Alliance”). In January 2024, the Company announced that it entered into a new agreement with Citibank, N.A. (“Citi”) to provide the private label credit card program for Dillard’s customers under a new alliance (“Citibank Alliance”), replacing the existing credit card program under the Wells Fargo Alliance upon its termination in September 2024. The new program launched on August 19, 2024 for new Dillard’s credit applicants. Existing accounts transferred from Wells Fargo to Citi on September 16, 2024. The term of the new Citi agreement is 10 years with automatic extensions for successive two-year terms unless the agreement is terminated by either party in accordance with the terms and conditions of the agreement.
Under the Citibank Alliance, Citi establishes, owns and manages Dillard’s private label credit cards, including a new co-branded Mastercard Incorporated card (“Mastercard,” collectively, the “private label cards”). The new co-branded Mastercard replaced the previous co-branded card. Citi retains the benefits and risks associated with the ownership of the private label card accounts, provides key customer service functions, including new account openings, transaction authorization, billing adjustments and customer inquiries, receives the finance charge income and incurs the bad debts associated with those accounts.
Pursuant to the Citibank Alliance, we receive on-going cash compensation from Citi based upon the portfolio’s earnings. The compensation received from the portfolio is determined monthly and has no recourse provisions. The Company recognized income of $39.6 million, $54.1 million and $67.2 million from the Citibank Alliance and the former Wells Fargo Alliance during fiscal 2025, 2024 and 2023, respectively.
While future cash flows under the Citibank Alliance are difficult to predict, the Company and Citi remain focused on collaborative strategies to enhance customer awareness and acceptance of the program’s product offerings in an effort
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to improve the financial performance of this alliance; however, there can be no assurance that these efforts will significantly impact the performance. Any material decrease could adversely affect our operating results and cash flows.
At January 31, 2026, the Company had purchase obligations of $1,254.8 million outstanding for merchandise and store construction commitments, all of which are expected to be paid during fiscal 2026.
Investing Activities
Cash inflows from investing activities generally include proceeds from sales of property and equipment and maturities of short-term investments. Cash outflows from investing activities generally include payments for capital expenditures such as property and equipment and other investments.
Cash from investing activities increased $292.3 million during fiscal 2025 compared to fiscal 2024 primarily due to a net decrease in short-term investments.
Capital expenditures decreased $11.2 million for fiscal 2025 compared to fiscal 2024. There were no new locations opened during fiscal 2025. During fiscal 2024, the Company opened a new location at The Empire Mall in Sioux Falls, South Dakota (140,000 square feet) marking its 30th state of operation.
During fiscal 2025, the Company closed its location at The Shops at Willow Bend in Plano, Texas (240,000 square feet). There were no material costs associated or expected with this store closure. We remain committed to closing stores where appropriate and may incur future closing costs related to such stores when they close.
During fiscal 2025, the Company received cash proceeds of $25.7 million and recorded a related gain of $20.4 million primarily from the sale of five properties: (1) a 240,000 square foot location at The Shops at Willow Bend in Plano, Texas, (2) a 150,000 square foot non-operating location at Crossroads Center in Waterloo, Iowa, (3) a non-operating building at Towne West Square in Wichita, Kansas, (4) a non-operating building at Golden Triangle Mall in Denton, Texas, and (5) a parcel of land at Rivergate Mall in Goodlettsville, Tennessee.
During fiscal 2024, the Company also closed (1) its Eastwood Mall Clearance Center in Niles, Ohio (120,000 square feet) and (2) its leased facility at Stones River Town Centre in Murfreesboro, Tennessee (145,000 square feet).
During fiscal 2025 and 2024, the Company purchased certain treasury bills for $534.6 million and $696.7 million, respectively, that are classified as short-term investments. During fiscal 2025 and 2024, the Company received proceeds of $657.6 million and $530.9 million, respectively, related to maturities of its short-term investments.
During fiscal 2025, the Company contributed $34.3 million to its mall joint ventures, recording the investments in other assets on the Company’s consolidated balance sheet.
Financing Activities
Our primary source of cash inflows from financing activities is generally borrowings from our $800 million senior secured revolving credit facility. Financing cash outflows generally include the repayment of borrowings under the revolving credit facility, the repayment of long-term debt, the payment of dividends and the purchase of treasury stock.
Cash used in financing activities increased to $595.9 million in fiscal 2025 from $534.8 million in fiscal 2024 due to increase in cash dividends paid during 2025.
Stock Repurchase. In February 2022, the Company’s Board of Directors authorized the Company to repurchase up to $500 million of the Company’s Class A Common Stock under an open-ended plan (“February 2022 Stock Plan”). In May 2023, the Company’s Board of Directors authorized the Company to repurchase up to $500 million of the Company’s Class A Common Stock under an open-ended plan (“May 2023 Stock Plan”). As of January 31, 2026, the Company had completed the authorized purchases under the February 2022 Stock Plan, and $165.2 million of authorization remained under the May 2023 Stock Plan.
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During fiscal 2025, the Company repurchased 0.3 million shares of Class A Common Stock for $107.8 million at an average price of $359.16 per share. During fiscal 2024, the Company repurchased 0.3 million shares of Class A Common Stock for $121.0 million at an average price of $367.33 per share. The ultimate disposition of the repurchased stock has not been determined.
On August 16, 2022, the Inflation Reduction Act of 2022 ("the Act") was signed into law. Under the Act share repurchases after December 31, 2022 are subject to a 1% excise tax. At January 31, 2026, the Company had accrued $1.0 million of excise tax related to its share repurchase program.
Revolving Credit Agreement. The Company maintains a revolving credit facility (“credit agreement”) for general corporate purposes including, among other uses, working capital financing, the issuance of letters of credit, capital expenditures and, subject to certain restrictions, the repayment of existing indebtedness and share repurchases. The credit agreement, which is secured by certain deposit accounts of the Company and certain inventory of certain subsidiaries, provides a borrowing capacity of $800 million, subject to certain limitations as outlined in the credit agreement, with a $200 million expansion option. The Company pays a variable rate of interest on borrowings under the credit agreement and a commitment fee to the participating banks. There are no financial covenant requirements under the credit agreement provided availability exceeds $80 million and no specified event of default has occurred or is continuing.
In June 2023, the Company amended the credit agreement (the "2023 amendment") to reflect the changes necessary for the phaseout of LIBOR. Pursuant to the 2023 amendment, borrowings under the credit agreement bore interest, at our option, at a rate per annum equal to (1) the then alternative base rate plus the applicable rate or (2) adjusted term or daily simple SOFR, in each case plus 0.10% per annum, plus the applicable rate. The applicable rate was defined as (A) (x) 1.50% per annum in the case of term benchmark and RFR loans and (y) 0.50% per annum in the case of base rate loans when average quarterly availability is greater than or equal to 50% of the total commitments and (B) (x) 1.75% per annum in the case of term benchmark and RFR loans and (y) 0.75% per annum in the case of base rate loans when average quarterly availability is less than 50% of the total commitments. The commitment fee for unused borrowings was 0.30% per annum if average borrowings were less than 35% of the total commitments and 0.25% per annum if average borrowings were greater than or equal to 35% of the total commitments. The credit agreement, as amended by the 2023 amendment, was scheduled to mature on April 28, 2026.
In March 2025, the Company amended and extended its revolving credit facility (the "2025 amendment") replacing the Company's previous amended credit agreement. The Company paid $3.3 million in issuance costs related to the 2025 amendment which was recorded in other assets on the consolidated balance sheet. The 2025 amendment continues to have the 0.10% per annum credit spread adjustment to the interest rate for term benchmark and RFR loans but reduced the applicable rate to (A) (x) 1.25% per annum in the case of term benchmark and RFR loans and (y) 0.25% per annum in the case of base rate loans when average quarterly availability is greater than or equal to 50% of the total commitments and (B) (x) 1.50% per annum in the case of term benchmark and RFR loans and (y) 0.50% per annum in the case of base rate loans when average quarterly availability is less than 50% of the total commitments. The 2025 amendment also reduced the unused commitment fee to (A) 0.25% per annum when the average amount utilized is less than 50% of the total commitment and (B) 0.20% per annum when the average amount utilized is greater than or equal to 50% of the total commitment. The facility was arranged by JPMorgan Chase Bank, N.A. The credit agreement, as amended by the 2025 amendment, matures March 12, 2030.
No borrowings under the credit agreement were outstanding at January 31, 2026. Letters of credit totaling $25.3 million were issued under the credit agreement leaving unutilized availability under the facility of $774.7 million at January 31, 2026. The Company had no borrowings during fiscal 2025, 2024 and 2023.
Long-term Debt. At January 31, 2026, the Company had $321.7 million of long-term debt, including current portion, comprised of unsecured notes. The unsecured notes bear interest at rates ranging from 7.000% to 7.750% with due dates from fiscal 2026 through fiscal 2028.
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Long-term debt maturities over the next five years are (in millions):
Fiscal Year
Long-Term Debt
Maturities
2026
$
96.0
2027
80.0
2028
145.8
2029
—
2030
—
During fiscal 2026, the Company expects to accrue interest expense of $19.7 million on its long-term debt.
Subordinated Debentures. As of January 31, 2026, the Company had $200 million outstanding of its 7.5% subordinated debentures due August 1, 2038. All of these subordinated debentures were held by Dillard’s Capital Trust I, a 100% owned, unconsolidated finance subsidiary of the Company. The Company has the right to defer the payment of interest on the subordinated debentures at any time for a period not to exceed 20 consecutive quarters; however, the Company has no present intention of exercising this right to defer interest payments.
During fiscal 2026, the Company expects to accrue interest expense of $15.0 million on its subordinated debentures.
Dividends. During fiscal 2025 and 2024, in addition to our typical quarterly dividends, the Board of Directors declared a special dividend of $30.00 per share and $25.00 per share, respectively, that was paid on the Class A Common Stock and Class B Common Stock of the Company.
Outlook
The Company expects to finance its operations in the short-term and the long-term from cash on hand, cash flows generated from operations and, if necessary, utilization of our revolving credit facility. Depending upon our actual and anticipated sources and uses of liquidity, the Company will from time to time consider other possible financing transactions, the proceeds of which could be used to fund working capital or for other corporate purposes.
OFF-BALANCE-SHEET ARRANGEMENTS
The Company has not created, and is not party to, any special-purpose entities or off-balance-sheet arrangements for the purpose of raising capital, incurring debt or operating the Company’s business. The Company does not have any off-balance-sheet arrangements or relationships that are reasonably likely to materially affect the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or the availability of capital resources.
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COMMERCIAL COMMITMENTS
AMOUNT OF COMMITMENT EXPIRATION PER PERIOD
(in thousands of dollars)
Total Amounts
After
Other Commercial Commitments
Committed
Within 1 year
2 - 3 years
4 - 5 years
5 years
$800 million line of credit, none outstanding (1)
$
—
$
—
$
—
$
—
$
—
Standby letters of credit
25,275
24,975
300
—
—
Import letters of credit
—
—
—
—
—
Total commercial commitments
$
25,275
$
24,975
$
300
$
—
$
—
(1)
At January 31, 2026, letters of credit totaling $25.3 million were issued under the credit agreement.
NEW ACCOUNTING PRONOUNCEMENTS
For information with respect to new accounting pronouncements and the impact of these pronouncements on our consolidated financial statements, see Note 1 in the “Notes to Consolidated Financial Statements” in Item 8 hereof.
FORWARD-LOOKING INFORMATION
This report contains certain forward-looking statements. The following are or may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995: (a) statements including words such as “may,” “will,” “could,” “should,” “believe,” “expect,” “future,” “potential,” “anticipate,” “intend,” “plan,” “estimate,” “continue,” or the negative or other variations thereof; (b) statements regarding matters that are not historical facts; and (c) statements about the Company’s future occurrences, plans and objectives, including those statements included under the heading “Outlook” included in this Management’s Discussion and Analysis and other statements regarding management’s expectations and forecasts for the remainder of fiscal 2026 and beyond, statements regarding future income and cash flows from the Citibank Alliance, statements concerning the opening of new stores or the closing of existing stores, statements concerning capital expenditures and sources of liquidity, statements concerning share repurchases, statements concerning pension contributions, statements concerning changes in loss trends, settlements and other costs related to our self-insurance programs, statements concerning expectations regarding the payment of dividends, statements regarding the impacts of inflation, wages, trade restrictions, including tariffs, and the effectiveness of our ongoing initiatives to manage such costs, statements regarding expense management and statements concerning estimated taxes. The Company cautions that forward-looking statements contained in this report are based on estimates, projections, beliefs and assumptions of management and information available to management at the time of such statements and are not guarantees of future performance. The Company disclaims any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information or otherwise. Forward-looking statements of the Company involve risks and uncertainties and are subject to change based on various important factors. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements made by the Company and its management as a result of a number of risks, uncertainties and assumptions. Representative examples of those factors include (without limitation) general retail industry conditions and macro-economic conditions including inflation, economic recession and changes in traffic at malls and shopping centers; economic and weather conditions for regions in which the Company’s stores are located and the effect of these factors on the buying patterns of the Company’s customers, including the effect of changes in prices and availability of oil and natural gas; the availability of and interest rates on consumer credit; the impact of competitive pressures in the department store industry and other retail channels including specialty, off-price, discount and Internet retailers; changes in the Company’s ability to meet labor needs amid nationwide labor shortages and an intense competition for talent; changes in consumer spending patterns, debt levels and their ability to meet credit obligations; high levels of unemployment; changes in tax legislation; trade disputes and changes in trade policies including the imposition (or threat) of new or increased duties, taxes, tariffs and other charges impacting our products or supply chain; changes in legislation and governmental regulations; adequate and stable availability and pricing of materials, production facilities and labor from which the Company sources its merchandise; changes in operating expenses, including employee wages, commission structures and related benefits; system failures or data security breaches; inability to effectively utilize advancements in technology, including artificial intelligence; possible future acquisitions of store properties from other
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department store operators; the continued availability of financing in amounts and at the terms necessary to support the Company’s future business; fluctuations in SOFR and other base borrowing rates; potential disruption from terrorist activity and the effect on ongoing consumer confidence; epidemic, pandemic or public health issues and their effects on public health, our supply chain, the health and well-being of our employees and customers and the retail industry in general; potential disruption of international trade and supply chain efficiencies; global conflicts (including the ongoing conflicts in the Middle East and Ukraine) and the possible impact on consumer spending patterns and other economic and demographic changes of similar or dissimilar nature, and other risks and uncertainties, including those detailed from time to time in our periodic reports filed with the Securities and Exchange Commission particularly those set forth under the caption “Item 1A, Risk Factors” in this Annual Report on Form 10-K.