DILLARDS 2026 Q1 Earnings Misses Targets with Net Income Down 9%

DILLARD'S (DDS) reported its fiscal 2026 Q1 earnings on May 15th, 2025. Despite challenging market conditions, Dillard's reported a decrease in both revenue and earnings compared to the previous year. The company missed analysts' expectations, reflecting a decline in consumer demand amid economic uncertainty. Dillard's guidance remains cautious, in line with the current economic landscape. The company's strategic focus on expense management and maintaining a healthy gross margin is emphasized in its guidance, aiming for resilience through continued stock repurchases and financial discipline.

Revenue
Dillard's reported a 1.6% decline in total revenue for Q1 2026, amounting to $1.55 billion, compared to $1.57 billion in Q1 2025. Net sales contributed $1.53 billion, while revenue from service charges and other income reached $18.10 million, collectively forming the total revenue figure.

Earnings/Net Income
Earnings per share (EPS) decreased by 6.3% to $10.39 in Q1 2026, compared to $11.09 in Q1 2025. Net income also fell to $163.80 million, marking a 9.0% decline from the $180 million reported in Q1 2025. The decrease in EPS reflects a challenging period for the company.

Price Action
The stock price of Dillard's climbed 4.93% during the latest trading day, jumped 13.32% during the most recent full trading week, and surged 28.94% month-to-date.

Post-Earnings Price Action Review
The strategy of buying DDS when revenues exceed expectations and holding for 30 days has historically yielded strong results, achieving a 279.89% return, significantly outperforming the benchmark. Despite a maximum drawdown of -38.33%, the strategy demonstrated resilience, underscoring its potential in volatile markets. With a Sharpe ratio of 0.90 and a CAGR of 39.33%, the strategy showcases efficient risk-adjusted returns, making it appealing for investors seeking to capitalize on positive earnings surprises.

CEO Commentary
William T. Dillard, II, Chief Executive Officer of Dillard's, highlighted the company's relatively strong performance in the first quarter despite economic uncertainty. He emphasized the successful management of expenses and noted a healthy gross margin. The company repurchased $98 million in stock, maintaining $1.2 billion in cash and short-term investments. While total retail sales decreased by 2% and comparable store sales dropped by 1%, certain categories such as juniors' and children's apparel showed strength, whereas others like home and furniture, shoes, and ladies' apparel faced challenges.

Guidance
The company remains committed to navigating ongoing economic uncertainties while maintaining financial discipline. Dillard's anticipates continued focus on expense management and sustaining a healthy gross margin. CEO William T. Dillard, II expressed confidence in the company's strategic priorities, including further stock repurchases, as they aim to balance investments while addressing market conditions. Forward-looking statements suggest a cautious yet optimistic outlook for upcoming quarters.

Additional News
Dillard's has been actively engaging in strategic stock repurchases, with the latest buyback involving $98 million worth of shares, reflecting confidence in the company's financial position. Additionally, there have been insights into hedge fund movements, with notable transactions from prominent firms such as PACER ADVISORS, INC. and CITADEL ADVISORS LLC, indicating varied market sentiment towards Dillard's stock. Insider trading activities have also been observed, with TOM W BOLIN, Vice President, selling 300 shares recently. These activities highlight Dillard's focus on financial management and shareholder value enhancement in a challenging economic environment.