Dillard's Q2 Earnings Beat Estimates, Comparable Store Sales Rise 1%

Dillard's Inc. DDS posted second-quarter fiscal 2025 results, wherein the bottom line surpassed the Zacks Consensus Estimate while the top line came in line with it. Meanwhile, the company’s sales and earnings increased year over year.

Earnings per share (EPS) of $4.66 surpassed the Zacks Consensus Estimate of $3.79. The bottom line rose 1.5% from $4.59 in the year-ago quarter.

Dillard's, Inc. Price, Consensus and EPS Surprise

Dillard's, Inc. price-consensus-eps-surprise-chart | Dillard's, Inc. Quote

Net sales of $1.514 billion rose 1.6% from the prior-year quarter and came almost in line with the consensus estimate. Including service charges and other income, the company reported sales of $1.536 million, up 1.4% year over year.

Dillard’s shares jumped about 3.4% on Friday, following better-than-expected earnings results for the second-quarter fiscal 2025. The positive reaction reflected investor confidence in the company’s stronger-than-anticipated performance and improving sales momentum. Shares of the Zacks Rank #1 (Strong Buy) company have gained 26.9% in the past three months compared with the industry's 23.8% rise.

DDS Stock's Price Performance

Detailed Analysis of DDS’ Q2 Performance

Total retail sales (excluding CDI Contractors, LLC) increased 1.5% year over year to $1.447 billion. On a 13-week comparison basis, total retail sales rose 1% year over year while comps increased 1%. Category performance was mixed, with juniors’ and children’s apparel, along with zladies’ accessories and lingerie, delivering stronger results, while home and furniture remained the weakest-performing category. Our model had predicted comps growth of 1.3% for the fiscal second quarter.

The consolidated gross margin contracted 100 basis points (bps) year over year to 36.6%. The retail gross margin of 38.1% reflected a year-over-year decrease of 100 bps as the metric Gross margin increased moderately in shoes and rose slightly in ladies’ accessories and lingerie, while it declined slightly in men’s apparel and accessories and decreased significantly in ladies’ apparel. Gross margin performance in juniors’ and children’s apparel, cosmetics, and home and furniture was relatively unchanged as a percent of sales. We had expected a gross margin of 36.3%, down 130 bps year over year.

Dillard's consolidated selling, general and administrative expenses (SG&A) as a percentage of sales were 28.7%, down 40 bps from the prior-year quarter. In dollar terms, SG&A expenses (operating expenses) increased 0.1% year over year to $434.2 million. The slight year-over-year increase in dollars was largely offset by leverage on higher sales, resulting in a lower expense rate. Within the quarter, savings in payroll expense were offset by increases across various other expense categories.

Our model had predicted SG&A expense (as a percentage of sales) to be 29.2%, up 60 bps. In dollar terms, we expected SG&A expenses to rise 3% year over year to $446.7 million.

Dillard’s Other Financial Details

DDS ended the second-quarter fiscal 2025 with cash and cash equivalents of $1,012 million, long-term debt of $225.6 million, and a total shareholders' equity of $1.919 billion. The company provided $319.4 million of net cash from operating activities as of Aug. 2, 2025. Inventory climbed 2% year over year as of the same date.

In the second quarter of fiscal 2025, DDS repurchased 24,500 shares for $9.8 million, reflecting an average price of $398.7 per share. As of Aug. 2, 2025, it had $165.2 million remaining under its current share repurchase authorization announced in May 2023. Total shares outstanding (Class A and Class B Common Stock) at Aug. 2, 2025, and Aug. 3, 2024, were 15.6 million and 16.2 million, respectively.

The company still forecasts capital expenditure of $120 million for fiscal 2025, suggesting an increase from the $105 million reported in fiscal 2024.

As of Aug. 2, 2025, DDS operated 272 Dillard’s stores, including 28 clearance stores across 30 states and an online store at dillards.com.

What Dillard’s Expects for FY25

For fiscal 2025, Dillard’s continues to expect depreciation and amortization expenses of $180 million compared with $178 million recorded last fiscal. The company projects interest and debt income of $7 million compared with $14 million in fiscal 2024. It still anticipates rentals of $20 million compared with $21 million reported in fiscal 2024.

Other Key Picks

Some other top-ranked stocks are Levi Strauss & Co. LEVI, Wolverine World Wide, Inc. WWW and Torrid Holdings CURV.

Levi designs and markets jeans, casual wear, and related accessories for men, women and children. It flaunts a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Levi’s current fiscal-year earnings indicates growth of 4% from the year-ago actual. LEVI delivered a trailing four-quarter average earnings surprise of 25.9%.

Wolverine is engaged in the designing, manufacturing and distribution of a wide variety of casual as well as active apparel and footwear. It currently sports a Zacks Rank of 1.

The Zacks Consensus Estimate for Wolverine’s current financial-year earnings and sales indicates growth of 43.9% and 6.2%, respectively, from the year-ago actuals. WWW delivered a trailing four-quarter average earnings surprise of 39.1%.

Torrid Holdings currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for Torrid Holdings’ 2025 sales and EPS indicates a decrease of 5.6% and 6.7%, respectively, from the year-ago period’s levels. CURV delivered a trailing negative four-quarter average earnings surprise of 10.5%.

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