Dillard's Q2 Earnings Exceed Expectations, Sales Rise 1.6% YOY

Dillard's Q2 earnings beat estimates, with EPS of $4.66 surpassing the Zacks Consensus Estimate of $3.79. Net sales of $1.514 billion rose 1.6% YoY and came in line with the consensus estimate. Total retail sales increased 1.5% YoY, and comps rose 1%. The consolidated gross margin contracted 100 bps YoY to 36.6%, while SG&A expenses as a percentage of sales decreased 40 bps to 28.7%.

Dillard's Inc. (DDS) reported its second-quarter fiscal 2025 results, with earnings per share (EPS) of $4.66 surpassing the Zacks Consensus Estimate of $3.79. Net sales of $1.514 billion rose 1.6% year over year (YoY) and came in line with the consensus estimate. Total retail sales increased 1.5% YoY, while comparable sales (comps) rose 1%. The consolidated gross margin contracted 100 basis points (bps) YoY to 36.6%, while selling, general, and administrative (SG&A) expenses as a percentage of sales decreased 40 bps to 28.7% [1].

The company's strong performance was reflected in its stock price, which jumped about 3.4% on Friday following the announcement. Dillard's shares have gained 26.9% in the past three months compared to the industry's 23.8% rise, highlighting investor confidence in the company's improving sales momentum [1].

Category performance was mixed, with juniors' and children's apparel, along with women's accessories and lingerie, delivering stronger results. Home and furniture remained the weakest-performing category. The company's gross margin performance varied across categories, with slight improvements in shoes and ladies' accessories and lingerie, while men's apparel and accessories and ladies' apparel saw declines. The consolidated gross margin was 36.6%, down 100 bps from the prior-year quarter, slightly below the expected 36.3% [1].

SG&A expenses as a percentage of sales decreased to 28.7%, down 40 bps from the prior-year quarter. In dollar terms, SG&A expenses increased 0.1% YoY to $434.2 million, with leverage on higher sales offsetting the slight increase in expenses. The company's cash and cash equivalents stood at $1.012 billion, long-term debt at $225.6 million, and total shareholders' equity at $1.919 billion. Dillard's repurchased 24,500 shares for $9.8 million, with $165.2 million remaining under its current share repurchase authorization [1].

For fiscal 2025, Dillard's expects depreciation and amortization expenses of $180 million, interest and debt income of $7 million, and rentals of $20 million. The company forecasts capital expenditure of $120 million, up from $105 million in fiscal 2024. As of Aug. 2, 2025, Dillard's operated 272 stores, including 28 clearance stores across 30 states and an online store at dillards.com [1].

References:
[1] https://finance.yahoo.com/news/dillards-q2-earnings-beat-estimates-170600882.html