Dillard’s, Inc., profits slid 9 percent in the first quarter ended May 3, as same-store sales eased 1 percent and gross margins eroded 70 basis points.
Company CEO William T. Dillard, II stated, “We turned in a relatively good first quarter in light of the prevailing economic uncertainty. We kept expenses under control and reported a healthy gross margin. After repurchasing $98 million in stock, we had $1.2 billion in cash and short-term investments remaining.”
First Quarter Highlights
(compared to the prior year first quarter)
- Total retail sales decreased 2 percent
- Comparable store sales decreased 1 percent
- Net income of $163.8 million compared to $180.0 million
- Earnings per share of $10.39 compared to $11.09
- Retail gross margin of 45.5 percent of sales compared to 46.2 percent of sales
- Operating expenses were $421.7 million (27.6 percent of sales) compared to $426.7 million (27.5 percent of sales)
- Ending inventory increased 6 percent
First Quarter Sales
Net sales for the 13 weeks ended May 3, 2025, and May 4, 2024, were $1.529 billion and $1.549 billion, respectively. Net sales include the operations of the company’s construction business, CDI Contractors, LLC (CDI).
Total retail sales, which exclude CDI, for the 13 weeks ended May 3, 2025, and May 4, 2024, were $1.47 billion and $1.49 billion, respectively. Total retail sales decreased 2 percent for the 13-week period ended May 3, 2025, compared to the 13-week period ended May 4, 2024. Sales in comparable stores for the same period decreased 1 percent. Stronger performing categories were juniors’ and children’s apparel and men’s clothing and accessories. Weaker performing categories were home and furniture, shoes and ladies’ apparel.
Profitability and Expenses
Consolidated gross margin for the 13 weeks ended May 3, 2025, was 43.9 percent of sales compared to 44.6 percent for the 13 weeks ended May 4, 2024.
Retail gross margin for the 13 weeks ended May 3, 2025, was 45.5 percent of sales compared to 46.2 percent for the 13 weeks ended May 4, 2024. Compared to the prior year first quarter, retail gross margin decreased moderately in ladies’ apparel and was flat in ladies’ accessories and lingerie. All other merchandise categories decreased slightly.
Dillard’s reported net income for the 13 weeks ended May 3, 2025, of $163.8 million, or $10.39 per share, compared to $180.0 million, or $11.09 per share, for the 13 weeks ended May 4, 2024.
Consolidated selling, general and administrative expenses (SG&A) for the 13 weeks were $421.7 million (27.6 percent of sales) and $426.7 million (27.5 percent of sales) for the 13 weeks ended May 4, 2024. The decrease of $5.0 million was primarily due to decreased payroll and payroll-related expenses.
Balance Sheet Summary
Inventory increased 6 percent at May 3, 2025, compared to May 4, 2024.
Share Repurchase
During the 13 weeks ended May 3, 2025, the company purchased $98.0 million (approximately 276,000 shares) of Class A Common Stock at an average price of $355.65 per share. As of May 3, 2025, authorization of $175.0 million remained under the May 2023 program.
Total shares outstanding (Class A and Class B Common Stock) at May 3, 2025, and May 4, 2024, were 15.6 million and 16.2 million, respectively.
The company operates 272 Dillard’s stores, including 28 clearance centers, spanning 30 states for a total of 46.3 million square feet.
Image courtesy Dillard’s, Inc.