Dillard's Q2 sales up for first time, inventory down 2% YoY.

• Dillard's reports Q2 sales increase • Sales trends strengthen in July • Inventory down 2% from Q1 • Focused on controlling inventory • Sales increased for the first time in a while

Department store chain Dillard's (NYSE:DDS) reported its second-quarter fiscal 2025 results, showcasing a notable sales increase and improved inventory management. The company's revenue climbed 1.4% year-on-year to $1.54 billion, exceeding market expectations of $1.50 billion [1]. This quarter's performance is a welcome turnaround after a period of stagnation, with same-store sales rising 1% year-on-year, reversing a decline of 5% seen in the previous quarter [1].

William T. Dillard, II, Chief Executive Officer of Dillard's, commented on the quarter, highlighting the company's focus on controlling inventory. The inventory level at the end of the second quarter was 2% lower than the first quarter, indicating a more efficient use of resources [1]. This strategic move was part of the company's effort to adapt to the ever-changing operating environment, which has been a challenge for many retailers [1].

The company's adjusted EBITDA of $187.2 million also beat analysts' estimates by 45.6%, demonstrating robust operational efficiency [1]. This financial performance was further bolstered by a free cash flow of $60.12 million, up from -$94.33 million in the same quarter last year [1].

Dillard's stock price reacted positively to the news, rising more than 5% in afternoon trading on July 14, 2025, and nearing a 52-week high [2]. The company's market capitalization stands at $7.77 billion [1].

Looking ahead, while the immediate results are encouraging, investors should consider the longer-term trends. Dillard's has faced challenges in maintaining consistent revenue growth, and analysts expect a 3% decline in revenue over the next 12 months [1]. The company's ability to sustain and grow its sales will be crucial for its future performance.

References:
[1] https://finance.yahoo.com/news/dillards-nyse-dds-surprises-q2-110435274.html
[2] https://www.nwaonline.com/news/2025/aug/14/dillards-posts-728-million-second-quarter-profit/?business-arkansas