Dillard's (NYSE:DDS) Misses Q4 CY2025 Sales Expectations

Department store chain Dillard’s (NYSE:DDS) fell short of the market’s revenue expectations in Q4 CY2025, with sales falling 3% year on year to $1.99 billion. Its GAAP profit of $13.05 per share was 13.5% above analysts’ consensus estimates.

Is now the time to buy Dillard's? Find out by accessing our full research report, it’s free.

Dillard’s Chief Executive Officer William T. Dillard, II commented, “We reported a respectable year. We achieved retail gross margin of 40.8% in a rapidly changing merchandising environment with unpredictable costs. We rewarded our shareholders with the largest dividend in our history and still held around $1.1 billion in cash and short-term investments at year-end.”

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 performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.

With $6.56 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 generate demand over the last three years. Its sales dropped by 2.1% annually as it didn’t open many new stores and observed lower sales at existing, established locations.

This quarter, Dillard's missed Wall Street’s estimates and reported a rather uninspiring 3% year-on-year revenue decline, generating $1.99 billion of revenue.

Looking ahead, sell-side analysts expect revenue to grow 1.6% over the next 12 months. Although this projection implies its newer products will catalyze better top-line performance, it is still below average for the sector.

Microsoft, Alphabet, Coca-Cola, Monster Beverage—all began as under-the-radar growth stories riding a massive trend. We’ve identified the next one: a profitable AI semiconductor play Wall Street is still overlooking. Go here for access to our full report.

Store Performance

Number of Stores

A retailer’s store count influences how much it can sell and how quickly revenue can grow.

Dillard's listed 271 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

The change in a company's store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales is an industry measure of whether revenue is growing at those existing stores and is driven by customer visits (often called traffic) and the average spending per customer (ticket).

Dillard’s demand has been shrinking over the last two years as its same-store sales have averaged 1.3% 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 fell by 1% year on year. This performance was more or less in line with its historical levels.

Key Takeaways from Dillard’s Q4 Results

We were impressed by how significantly Dillard's blew past analysts’ EBITDA expectations this quarter. We were also glad its gross margin outperformed Wall Street’s estimates. On the other hand, its revenue missed. Overall, we think this was a mixed quarter. The stock remained flat at $643.94 immediately after reporting.

Should you buy the stock or not? 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).