DILLARD'S, INC.
For the period ended Aug 1, 2026. Filed Sep 4, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Aug 1, 2026 · Filed Sep 4, 2026
DDS$602.38-3.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-05-02; filed 2026-06-05.
0000028917-26-000019
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-08-01; filed 2026-09-04.
0000028917-26-000027
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 73 previous paragraphs and 88 current paragraphs.
44 unchanged; 26 reworded; 12 added; 2 removed; 1 previous and 6 current paragraphs rearranged.
Tables are not compared: 12 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
Retail sales increased 1.0% for the second quarter of 2026 compared to the prior year period, reflecting a somewhat resilient customer. Net income increased for the quarter, primarily driven by higher retail gross margin of 40.9%, which benefited from tariff refunds received during the period, and growth in retail sales.
Current report
For the second quarter of 2026, the Company reported net income of $97.7 million ($6.25 per share) compared to net income of $72.8 million ($4.66 per share) for the second quarter of 2025. Net income for the second quarter of 2026 includes $37.2 million ($28.4 million after tax, or $1.82 per share) in refunds of International Emergency Economic Powers Act (IEEPA) tariffs. Prior year second quarter net income includes a pretax gain of $4.8 million ($3.7 million after tax or $0.24 per share) primarily related to the sale of three properties.
Current report
Retail gross margin increased to 40.9% of sales from 38.1% of sales reported in the prior year second quarter. Retail gross margin was positively impacted (260 basis points of sales) by the aforementioned $37.2 million IEEPA tariff refunds. Ending inventory increased 5% at August 1, 2026 compared to August 2, 2025.
Current report
*Cash flow from operations is for the six months ended August 1, 2026 and August 2, 2025.
Current report
Storewide sales penetration of exclusive brand merchandise for the six months ended August 1, 2026 and August 2, 2025 was 22.3% and 23.4%, respectively.
Current report
Gross margin, as a percentage of sales, increased to 42.1% from 40.3% during the six months ended August 1, 2026 compared to the six months ended August 2, 2025.
Current report
Gross margin from retail operations, as a percentage of sales, increased to 43.4% from 41.8% during the six months ended August 1, 2026 compared to the six months ended August 2, 2025. Gross margin from retail operations was positively impacted (120 basis points of sales) by the aforementioned $37.2 million in refunds of IEEPA tariffs. Compared to the six months ended August 2, 2025 and without regard to the aforementioned IEEPA tariff refunds, gross margin during the six months ended August 1, 2026 (a) increased moderately in ladies’ apparel, (b) increased slightly in shoes and (c) was essentially unchanged in all other product categories.
Current report
SG&A increased to 28.9% of sales during the six months ended August 1, 2026 from 28.1% of sales during the six months ended August 2, 2025, increasing $31.8 million in total dollars. During the six months ended August 1, 2026 and August 2, 2025, payroll and payroll-related expenses were $624.8 million and $601.4 million, respectively, increasing $23.4 million.
Current report
Gain on Disposal of Assets
Current report
During the three months ended August 2, 2025, the Company received proceeds of $6.0 million primarily from the sale of three properties, resulting in a gain of $4.8 million that was recorded in gain on disposal of assets.
Current report
During the six months ended August 2, 2025, the Company received proceeds of $6.0 million primarily from the sale of three properties, resulting in a gain of $4.9 million that was recorded in gain on disposal of assets.
Current report
During the six months ended August 1, 2026, the Company decreased its net level of outstanding debt by $96.0 million related to the maturity of unsecured notes bearing interest at 7.750%.
Removed paragraphs (2)
Previous report
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.
Previous report
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.
Reworded paragraphs (26)
Previous wording
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.
Current wording
Compared to the prior year second quarter, both total retail sales (which exclude construction sales) and comparable store sales increased 1%.
Previous wording
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.
Current wording
Selling, general and administrative expenses for the three months ended August 1, 2026 were $443.6 million (29.4% of sales) compared to $434.2 million (28.7% of sales) for the prior year second quarter. The increase of $9.4 million was primarily due to higher payroll and payroll-related expenses.
Previous wording
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.
Current wording
Net cash provided by operating activities was $326.8 million for the six months ended August 1, 2026 compared to $319.4 million for the six months ended August 2, 2025.
Previous wording
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.
Current wording
As of August 1, 2026, the Company had working capital of $1.798 billion (including cash and cash equivalents of $763.1 million and short-term investments of $497.7 million) and $425.7 million of total debt outstanding, including one scheduled debt maturity of $80.0 million due May 2027, $145.7 million of long-term debt and $200.0 million of subordinated debentures. The Company paid a scheduled debt maturity of $96 million during the second quarter of 2026.
Previous wording
**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.
Current wording
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.
Previous wording
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.
Current wording
Net sales from the retail operations segment increased $8.2 million, or approximately 1%, and sales in comparable stores increased approximately 1% during the three months ended August 1, 2026 compared to the three months ended August 2, 2025. Sales in ladies’ accessories and lingerie increased significantly. Sales in home and furniture increased moderately, while sales in men’s apparel and accessories and shoes increased slightly. Sales in cosmetics remained flat, while sales in juniors’ and children’s apparel and ladies’ apparel decreased moderately.
Previous wording
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%.
Current wording
The number of sales transactions decreased 6% for the three months ended August 1, 2026 compared to the three months ended August 2, 2025, while the average dollars per sales transaction increased 7%.
Previous wording
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.
Current wording
We recorded a return asset of $11.2 million and $11.0 million and an allowance for sales returns of $19.4 million and $18.8 million as of August 1, 2026 and August 2, 2025, respectively.
Previous wording
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 January 31, 2026 and increasing approximately 2% from May 3, 2025. We expect these remaining performance obligations to be satisfied over the next nine to eighteen months.
Current wording
During the three months ended August 1, 2026, net sales from the construction segment decreased $14.4 million, or approximately 22%, compared to the three months ended August 2, 2025 due to a decrease in construction activity. The remaining performance obligations related to executed construction contracts totaled $152.1 million as of August 1, 2026, increasing approximately 8% from January 31, 2026 and increasing approximately 17% from August 2, 2025. We expect these remaining performance obligations to be satisfied over the next nine to eighteen months.
Previous wording
Service charges and other income includes the income from the Citibank Alliance. Income from the alliance increased $3.4 million for the three months ended May 2, 2026 compared to the three months ended May 3, 2025, primarily from decreases in credit losses.
Current wording
Service charges and other income includes the income from the Citibank Alliance. Income from the alliance increased $3.9 million for the six months ended August 1, 2026 compared to the six months ended August 2, 2025 primarily from decreases in credit losses.
Previous wording
Gross margin, as a percentage of sales, increased to 44.5% from 43.9% during the three months ended May 2, 2026 compared to the three months ended May 3, 2025.
Current wording
Gross margin, as a percentage of sales, increased to 39.7% from 36.6% during the three months ended August 1, 2026 compared to the three months ended August 2, 2025.
Previous wording
Gross margin from retail operations, as a percentage of sales, increased to 45.8% from 45.5% during the three months ended May 2, 2026 compared to the three months ended May 3, 2025. Gross margin increased moderately in shoes, while gross margin in ladies’ accessories and lingerie increased slightly. Gross margin decreased slightly in ladies’ apparel, while gross margin in home and furniture decreased moderately. Gross margin was essentially unchanged in all other product categories.
Current wording
Gross margin from retail operations, as a percentage of sales, increased to 40.9% from 38.1% during the three months ended August 1, 2026 compared to the three months ended August 2, 2025. Gross margin from retail operations was positively impacted (260 basis points of sales) by $37.2 million in refunds of IEEPA tariffs. Compared to the prior year second quarter and without regard to the aforementioned IEEPA tariff refunds, gross margin during the three months ended August 1, 2026 (a) increased moderately in ladies’ apparel, (b) increased slightly in cosmetics and home and furniture, (c) was essentially unchanged in juniors’ and children’s apparel, (d) decreased slightly in men’s apparel and accessories and shoes and (e) decreased moderately in ladies’ accessories and lingerie.
Previous wording
Total inventory increased 3% at May 2, 2026 compared to May 3, 2025. A 1% change in the dollar amount of markdowns would have impacted net income by approximately $1 million for the three months ended May 2, 2026.
Current wording
Total inventory increased 5% at August 1, 2026 compared to August 2, 2025. A 1% change in the dollar amount of markdowns would have impacted net income by approximately $2 million and $3 million for the three and six months ended August 1, 2026, respectively.
Previous wording
SG&A increased to 28.3% of sales during the three months ended May 2, 2026 from 27.6% of sales during the three months ended May 3, 2025, increasing $22.3 million in total dollars. During the three months ended May 2, 2026 and May 3, 2025, payroll and payroll-related expenses were $311.0 million and $297.9 million, respectively, increasing $13.1 million. Inflation continues to be a concern for management, impacting many areas of our operating expenses.
Current wording
SG&A increased to 29.4% of sales during the three months ended August 1, 2026 from 28.7% of sales during the three months ended August 2, 2025, increasing $9.5 million in total dollars. During the three months ended August 1, 2026 and August 2, 2025, payroll and payroll-related expenses were $313.9 million and $303.5 million, respectively, increasing $10.4 million.
Previous wording
Interest and debt (income) expense, net, includes interest income of $11.2 million for the three months ended May 2, 2026 and May 3, 2025.
Current wording
Interest and debt (income) expense, net, includes interest income of $12.8 million and $11.5 million for the three months ended August 1, 2026 and August 2, 2025, respectively. Interest income was $24.0 million and $22.7 million for the six months ended August 1, 2026 and August 2, 2025, respectively.
Previous wording
During the three months ended May 2, 2026, the Company received a settlement related to credit card interchange fee litigation of $104.1 million, net of legal expenses, which was recorded in gain on litigation settlement.
Current wording
During the six months ended August 1, 2026, the Company received a settlement related to credit card interchange fee litigation of $104.1 million, net of legal expenses, which was recorded in gain on litigation settlement.
Previous wording
The Company’s estimated federal and state effective income tax rate was approximately 23.5% and 23.3% for the three months ended May 2, 2026 and May 3, 2025, respectively. During the three months ended May 2, 2026 and May 3, 2025, income tax expense differed from what would be computed using the statutory federal income tax rate primarily due to the effects of state and local income taxes.
Current wording
The Company’s estimated federal and state effective income tax rate was approximately 23.4% and 23.0% for the three months ended August 1, 2026 and August 2, 2025, respectively. The Company’s estimated federal and state effective income tax rate was approximately 23.4% and 23.2% for the six months ended August 1, 2026 and August 2, 2025, respectively. During the three and six months ended August 1, 2026 and August 2, 2025, income tax expense differed from what would be computed using the statutory federal income tax rate primarily due to the effects of state and local income taxes.
Previous wording
A summary of net cash flows for the three months ended May 2, 2026 and May 3, 2025 follows:
Current wording
A summary of net cash flows for the six months ended August 1, 2026 and August 2, 2025 follows:
Previous wording
Net cash flows from operations increased $131.3 million during the three months ended May 2, 2026 compared to the three months ended May 3, 2025. This increase was primarily related to proceeds of $104.1 million, net of legal expenses, received from a settlement agreement the Company entered into related to credit card interchange fee litigation.
Current wording
Net cash flows from operations increased $7.4 million during the six months ended August 1, 2026 compared to the six months ended August 2, 2025. This increase was primarily related to (a) proceeds of $104.1 million, net of legal expenses, received from a settlement agreement the Company entered into related to credit card interchange fee litigation and (b) IEEPA tariff refunds of approximately $37 million. These increases of operating cash were mostly offset by (a) increases in tax payments primarily due to the prior year Internal Revenue Service’s tax deadline postponement for taxpayers who resided or had a business in the disaster area declared by the Federal Emergency Management Agency for severe weather events that began on April 2, 2025 in the state of Arkansas as well as (b) increases in inventories.
Previous wording
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 $9.2 million and $5.9 million from the Citibank Alliance during the three months ended May 2, 2026 and May 3, 2025, respectively.
Current wording
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 $21.1 million and $17.2 million from the Citibank Alliance during the six months ended August 1, 2026 and August 2, 2025, respectively.
Previous wording
Capital expenditures were $17.2 million and $16.9 million for the three months ended May 2, 2026 and May 3, 2025, respectively. The capital expenditures were primarily related to equipment purchases, the continued construction of new stores and the remodeling of existing stores. During the three months ended May 2, 2026, the Company opened a new location at The Mall at Fairfield Commons in Beavercreek, Ohio (160,000 square feet).
Current wording
Capital expenditures were $39.5 million and $43.5 million for the six months ended August 1, 2026 and August 2, 2025, respectively. The capital expenditures were primarily related to equipment purchases, the continued construction of new stores and the remodeling of existing stores. During the six months ended August 1, 2026, the Company opened a new location at The Mall at Fairfield Commons in Beavercreek, Ohio (160,000 square feet).
Previous wording
During the three months ended May 2, 2026 and May 3, 2025, the Company purchased certain treasury bills for $258.5 million and $212.4 million, respectively, that are classified as short-term investments. During the three months ended May 2, 2026 and May 3, 2025, the Company received proceeds of $212.5 million and $282.8 million, respectively, related to maturities of these short-term investments.
Current wording
During the six months ended August 1, 2026 and August 2, 2025, the Company purchased certain treasury bills for $641.5 million and $273.5 million, respectively, that are classified as short-term investments. During the six months ended August 1, 2026 and August 2, 2025, the Company received proceeds of $360.9 million and $405.0 million, respectively, related to maturities of these short-term investments.
Previous wording
During the three months ended May 2, 2026, no share repurchases were made under the Company’s stock repurchase plan. During the three months ended May 3, 2025, the Company repurchased 0.3 million shares of Class A Common Stock at an average price of $355.65 per share for $98.0 million under the Company’s stock repurchase plan. As of May 2, 2026, $165.2 million of authorization remained under the Company’s open stock repurchase plan. The ultimate disposition of the repurchased stock has not been determined. See Note 8,Stock Repurchase Programs, in the “Notes to Condensed Consolidated Financial Statements,” in Part I, Item 1 hereof for additional information. During the three months ended May 3, 2025, the Company accrued $1.0 million of excise tax related to its share repurchase program as an additional cost of treasury shares.
Current wording
During the six months ended August 1, 2026, no share repurchases were made under the Company’s stock repurchase plan. During the six months ended August 2, 2025, the Company repurchased 0.3 million shares of Class A Common Stock at an average price of $359.16 per share for $107.8 million under the Company’s stock repurchase plan. As of August 1, 2026, $165.2 million of authorization remained under the Company’s open stock repurchase plan. The ultimate disposition of the repurchased stock has not been determined. See Note 8,Stock Repurchase Programs, in the “Notes to Condensed Consolidated Financial Statements,” in Part I, Item 1 hereof for additional information. During the six months ended August 2, 2025, the Company accrued $1.1 million of excise tax related to its share repurchase program as an additional cost of treasury shares.
Previous wording
The Company had cash and cash equivalents of $1.158 billion as of May 2, 2026. The Company maintains a 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 is secured by certain deposit accounts of the Company and certain inventory of certain subsidiaries and provides a borrowing capacity of $800 million, subject to certain limitations as outlined in the credit agreement, with a $200 million expansion option.
Current wording
The Company had cash and cash equivalents of $763.1 million as of August 1, 2026. The Company maintains a 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 is secured by certain deposit accounts of the Company and certain inventory of certain subsidiaries and provides a borrowing capacity of $800 million, subject to certain limitations as outlined in the credit agreement, with a $200 million expansion option.
Previous wording
In March 2025, the Company amended the credit agreement (the “2025 amendment”). See Note 7,Revolving Credit Agreement, in the “Notes to Condensed Consolidated Financial Statements,” in Part I, Item 1 hereof for additional information. During the three months ended May 3, 2025, the Company paid $3.3 million in issuance costs related to the 2025 amendment, which were recorded in other assets on the condensed consolidated balance sheet. At May 2, 2026, no borrowings were outstanding, and letters of credit totaling $25.3 million were issued under the credit agreement leaving unutilized availability of $774.7 million.
Current wording
In March 2025, the Company amended the credit agreement (the “2025 amendment”). See Note 7,Revolving Credit Agreement, in the “Notes to Condensed Consolidated Financial Statements,” in Part I, Item 1 hereof for additional information. During the six months ended August 2, 2025, the Company paid $3.3 million in issuance costs related to the 2025 amendment, which were recorded in other assets on the condensed consolidated balance sheet. At August 1, 2026, no borrowings were outstanding, and letters of credit totaling $23.3 million were issued under the credit agreement leaving unutilized availability of $776.7 million.
Previous wording
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. For further information on our critical accounting policies and estimates, see “Item 7-Management’s Discussion and Analysis of Financial Condition
Current wording
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. For further information on our critical accounting policies and estimates, see “Item 7-Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the notes to our audited financial statements included in our Annual Report on Form 10-K for the year ended January 31, 2026. As of August 1, 2026, there have been no material changes to these critical accounting policies and estimates.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
**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),
Current report — wording carried from elsewhere
The percent change by segment and product category in the Company’s sales for the six months ended August 1, 2026 compared to the six months ended August 2, 2025 as well as the sales percentage by segment and product category to total net sales for the six months ended August 1, 2026 are as follows:
Current report — wording carried from elsewhere
Net sales from the retail operations segment increased $58.4 million, or approximately 2%, and sales in comparable stores increased approximately 2% during the six months ended August 1, 2026 compared to the six months ended August 2, 2025. Sales in ladies’ accessories and lingerie and home and furniture increased significantly. Sales in men’s apparel and accessories and shoes increased moderately, while sales in cosmetics increased slightly. Sales in juniors’ and children’s apparel remained flat, while sales in ladies’ apparel decreased slightly.
Current report — wording carried from elsewhere
The number of sales transactions decreased 5% for the six months ended August 1, 2026 compared to the six months ended August 2, 2025, while the average dollars per sales transaction increased 7%.
Current report — wording carried from elsewhere
During the six months ended August 1, 2026, net sales from the construction segment decreased $25.1 million, or approximately 20%, compared to the six months ended August 2, 2025 due to a decrease in construction activity.
Current report — wording carried from elsewhere
Inflation continues to be a concern for management, impacting many areas of our operating expenses.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
and Results of Operations” and the notes to our audited financial statements included in our Annual Report on Form 10-K for the year ended January 31, 2026. As of May 2, 2026, there have been no material changes to these critical accounting policies and estimates.