Dillard's (NYSE:DDS) Reports Strong Q3 CY2025

Department store chain Dillard’s (NYSE:DDS) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 2.7% year on year to $1.49 billion. Its GAAP profit of $8.31 per share was 34.7% above analysts’ consensus estimates.

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Dillard’s Chief Executive Officer William T. Dillard, II commented on the quarter, “We were happy to see sales strength continue through the third quarter, ending up 3%. We look forward to seeing and serving our customers this holiday season.”

Company Overview

With stores located largely in the Southern and Western US, Dillard’s (NYSE:DDS) is a department store chain that sells clothing, cosmetics, accessories, and home goods.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.

With $6.63 billion in revenue over the past 12 months, Dillard's is a mid-sized retailer, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale.

As you can see below, Dillard's struggled to increase demand as its $6.63 billion of sales for the trailing 12 months was close to its revenue six years ago (we compare to 2019 to normalize for COVID-19 impacts). This was mainly because it didn’t open many new stores and observed lower sales at existing, established locations.

This quarter, Dillard's reported modest year-on-year revenue growth of 2.7% but beat Wall Street’s estimates by 3.1%.

Looking ahead, sell-side analysts expect revenue to decline by 1.7% over the next 12 months, a slight deceleration versus the last six years. This projection doesn't excite us and implies its products will see some demand headwinds.

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Store Performance

Number of Stores

Dillard's listed 272 locations in the latest quarter and has kept its store count flat over the last two years while other consumer retail businesses have opted for growth.

When a retailer keeps its store footprint steady, it usually means demand is stable and it’s focusing on operational efficiency to increase profitability.

Same-Store Sales

A company's store base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales provides a deeper understanding of this issue because it measures organic growth at brick-and-mortar shops for at least a year.

Dillard’s demand has been shrinking over the last two years as its same-store sales have averaged 1.8% annual declines. This performance isn’t ideal, and we’d be concerned if Dillard's starts opening new stores to artificially boost revenue growth.

In the latest quarter, Dillard’s same-store sales rose 3% year on year. This growth was a well-appreciated turnaround from its historical levels, showing the business is regaining momentum.

Key Takeaways from Dillard’s Q3 Results

It was good to see Dillard's beat analysts’ EPS expectations this quarter. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a solid print. The stock traded up 4.8% to $635 immediately after reporting.

Dillard's may have had a good quarter, but does that mean you should invest right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.