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DILLARD'S, INC. (DDS)·Q3 2026 Earnings Summary

Executive Summary

  • Q3 delivered a clean beat: EPS of $8.31 and net sales of $1.469B, with total retail sales and comps both +3% year over year; margins improved (retail GM 45.3%, consolidated GM 43.4%) .
  • EPS materially beat Wall Street consensus (≈$6.47), and revenue was modestly above expectations (≈$1.434B); small estimate counts imply limited Street coverage, magnifying surprise impact [Values retrieved from S&P Global]*.
  • SG&A deleveraged to 30.0% of sales (from 29.4%), largely payroll-driven; inventory up 2% y/y, and one store closure announced (Plano, TX) as portfolio optimization continues .
  • FY25 capital expenditure guidance was cut to $100M from $120M previously, signaling tighter capital deployment; authorization remaining under the May 2023 buyback program was $165.2M and shares outstanding fell to 15.6M (vs 15.9M), supporting EPS growth .
  • Stock reacted positively; shares rose after the profit improvement and beat, a likely catalyst into holiday as margin execution and comps trends remain supportive .

What Went Well and What Went Wrong

What Went Well

  • Margin execution: retail gross margin expanded 80 bps y/y to 45.3%; consolidated gross margin rose to 43.4%, driven by better mix and strong categories (ladies’ accessories & lingerie; juniors & children; ladies’ apparel) .
  • Demand resilience: total retail sales +3% and comps +3% y/y; net sales reached $1.469B (vs $1.427B prior year) .
  • Management tone: “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.” — CEO William T. Dillard, II .

What Went Wrong

  • Expense pressure: SG&A rose to $440.4M and 30.0% of sales (vs 29.4%), notably due to payroll and related costs .
  • Year-to-date softness: 39-week net income fell to $366.5M (from $379.1M), with retail gross margin down to 42.9% (from 43.3%), reflecting cumulative cost/mix headwinds .
  • Inventory build: ending inventory +2% y/y; announced closure of Plano, TX (Willow Bend) in Jan 2026, underscoring ongoing fleet optimization needs .

Financial Results

Quarterly Trend (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Net Sales ($USD Billions)$1.529 $1.514 $1.469
Total Retail Sales ($USD Billions)$1.468 $1.447 $1.401
Comparable Store Sales (%)-1% +1% +3%
EPS ($)$10.39 $4.66 $8.31
Retail Gross Margin (%)45.5% 38.1% 45.3%
Consolidated Gross Margin (%)43.9% 36.6% 43.4%
Operating Expenses ($USD Millions)$421.7 $434.2 $440.4
Operating Expenses (% of Sales)27.6% 28.7% 30.0%
Inventory YoY Change (%)+6% +2% +2%

Q3 Performance vs Prior Year and Estimates

MetricQ3 2024Q3 2025Consensus (S&P)*Result vs Consensus
Net Sales ($USD Billions)$1.427 $1.469 $1.434*Beat
EPS ($)$7.73 $8.31 $6.47*Beat
Retail Gross Margin (%)44.5% 45.3% n/an/a
SG&A (% of Sales)29.4% 30.0% n/an/a

Note: Consensus EPS and revenue are based on limited estimate counts (EPS: 2; Revenue: 3) [Values retrieved from S&P Global]*.

Segment/Activity Breakdown

MetricQ3 2025
Net Sales ($USD Billions)$1.469
Total Retail Sales (ex-CDI) ($USD Billions)$1.401
CDI Contractors (Implied) ($USD Billions)≈$0.068 difference (by net−retail)

KPIs

KPIQ3 2025
Comparable Store Sales+3%
Ending Inventory YoY+2%
Cash and Cash Equivalents (End of Period, $USD Millions)$1,149.2
Shares Outstanding (Class A + B, Millions)15.6 (vs 15.9 prior year)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Capital Expenditures ($USD Millions)FY 2025 (ending Jan 31, 2026)$120 (Q2 guide) $100 (Q3 guide) Lowered
Depreciation & Amortization ($USD Millions)FY 2025$180 (Q2 guide) $180 (Q3 guide) Maintained
Rentals ($USD Millions)FY 2025$20 (Q2 guide) $20 (Q3 guide) Maintained
Interest & Debt (Income) Expense, Net ($USD Millions)FY 2025$(7) (Q2 guide) $(7) (Q3 guide) Maintained
DividendCurrent$0.25/Share (Declared May 17, 2025) No new Q3 declaration disclosedn/a

Earnings Call Themes & Trends

Note: No official Q3 call transcript was found; the company announced results and press updates but did not provide a transcript in the investor portal .

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Inventory ManagementQ1: Inventory +6% y/y; emphasis on control . Q2: Inventory +2%; “focused on controlling inventory” .Inventory +2% y/y; steady control .Improving vs Q1; stable vs Q2
SG&A DisciplineQ1: SG&A 27.6% (down $5M; payroll savings) . Q2: 28.7% (leverage offset by other increases) .30.0% (payroll-driven increase) .Worsened in Q3
Category MixQ2: Strength in juniors/children; accessories/lingerie; weakness in home/furniture .Q3: Strong in ladies accessories/lingerie; juniors/children; ladies apparel; moderate in shoes; slight in home/furniture, men’s, cosmetics .Mix improving, more broad-based
Store PortfolioQ1/Q2: Ongoing buybacks; steady store count .Plano, TX closure announced for Jan 2026 .Rationalization continues
Capital AllocationQ1: $98M buyback; cash & ST investments ~$1.2B . Q2: YTD buybacks $107.8M; capex guide $120M .Capex guide lowered to $100M; buyback authorization remaining $165.2M .More conservative capex

Management Commentary

  • “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.” — William T. Dillard, II, CEO (Q3 press release) .
  • “We were happy to achieve a sales increase for the first time in a while and encouraged by strengthening sales trends in July.” — CEO (Q2 press release) .
  • “We turned in a relatively good first quarter in light of the prevailing economic uncertainty. We kept expenses under control and reported a healthy gross margin.” — CEO (Q1 press release) .

Q&A Highlights

  • No Q3 2025 earnings call transcript was located on the Investor Relations site; MarketBeat listed a call schedule, but no transcript link was provided. As such, no Q&A details or clarifications beyond press release commentary are available .

Estimates Context

Results vs S&P Global consensus:

  • EPS: $8.31 vs $6.47 consensus; strong beat on margin expansion and better category performance, aided by lower share count [Values retrieved from S&P Global]*.
  • Revenue: $1.469B vs ~$1.434B consensus; modest top-line beat on +3% retail sales and +3% comps [Values retrieved from S&P Global]*.
  • Estimate coverage was thin (EPS: 2 estimates; Revenue: 3 estimates), which can amplify price reaction to surprises [Values retrieved from S&P Global]*.

Key Takeaways for Investors

  • Margin-led beat into holiday: expanded retail/consolidated margins and +3% comps underpin EPS outperformance; watch category breadth sustaining into Q4 .
  • Expense vigilance needed: SG&A rate rose to 30.0%; payroll-related pressures warrant monitoring as sales mix normalizes .
  • Capex trimmed to $100M: signals conservative capital stance; potential free cash flow preservation amid volatile retail backdrop .
  • Share count tailwind: outstanding shares declined to 15.6M, supporting EPS leverage; authorization of $165.2M remains for continued buybacks .
  • Inventory stable: +2% y/y indicates controlled build vs Q1; reduces markdown risk if demand holds through holiday .
  • Store rationalization continues: Plano closure reflects ongoing portfolio optimization; expect focus on productivity over footprint growth .
  • Near-term trading: Positive surprise and margin momentum were catalysts; any signs of Q4 gross margin resilience and SG&A control likely drive further rerating .

Note: No Q3 2026 filings, press releases, or transcripts were found in the document catalog; this recap references the latest available quarter (Q3 2025).