Dillard's (DDS) investor relations material

Executive summary

• Retail sales increased 1% year-over-year in Q2 2026, with comparable store sales also up 1%.

• Net income for Q2 2026 was $97.7 million ($6.25 per share), up from $72.8 million ($4.66 per share) in Q2 2025, driven by higher gross margin and tariff refunds.

• Year-to-date net income reached $348.2 million, up from $236.7 million, with retail sales up 2%.

• Significant one-time items included $37.2 million in IEEPA tariff refunds and a $104.1 million litigation settlement gain.

• Operating cash flow for the six months ended August 1, 2026 was $326.8 million, up from $319.4 million a year earlier.

Financial highlights

• Q2 2026 net sales were $1,507.6 million; year-to-date net sales were $3,075.9 million, both nearly flat year-over-year.

• Retail gross margin for Q2 2026 was 40.9% (up from 38.1%), aided by tariff refunds; consolidated gross margin was 39.7% (up from 36.6%).

• Operating expenses increased to $443.6 million (29.4% of sales) in Q2, mainly due to higher payroll.

• Inventory increased 5% year-over-year; annualized inventory turnover was 2.3, down from 2.5.

• Basic and diluted EPS for Q2 2026 was $6.25, up from $4.66; for six months, $22.30 vs. $15.08.

Outlook and guidance

• Management expects the fiscal 2026 effective tax rate to approximate 23%.

• Remaining performance obligations for construction contracts totaled $152.1 million as of August 1, 2026, expected to be satisfied over the next 9–18 months.

• The company plans to finance operations through cash on hand, operating cash flow, and available credit.

• Full-year estimates: depreciation and amortization $175 million, rentals $18 million, interest and debt expense $120 million, capital expenditures $93 million.