Dillard's, Inc. reported a strong financial performance for the first quarter of fiscal 2026, ending May 2, 2026, with net income reaching $250.6 million, or $16.04 per share, compared to $163.8 million, or $10.39 per share, in the same period last year. This increase in profitability was bolstered by a pre-tax gain of $104.1 million from a litigation settlement related to credit card interchange fees. Total net sales for the quarter were $1.57 billion, reflecting a 2.6% increase from $1.53 billion in the prior year, driven by a 3% growth in comparable store sales.
The company's retail operations segment saw net sales rise by approximately $50.2 million, or 3%, with notable increases in categories such as home and furniture, ladies' accessories, and shoes. However, the construction segment experienced a decline, with sales dropping by 17.5% due to reduced construction activity. Overall, the gross margin improved to 44.5% of net sales, up from 43.9% in the previous year, indicating enhanced profitability from retail operations.
Dillard's reported a significant increase in selling, general, and administrative expenses, which rose to $444 million, or 28.3% of sales, compared to $421.7 million, or 27.6% of sales, in the prior year. This increase was primarily attributed to higher payroll and related expenses. The company also noted a 3% increase in merchandise inventories, which totaled $1.51 billion as of May 2, 2026, compared to the previous year.
Operationally, Dillard's maintained a total of 272 stores, including 28 clearance centers, and an online store. The company reported a decrease in the number of sales transactions by 3%, although the average transaction value increased by 7%. Cash flow from operating activities improved significantly, totaling $364 million for the quarter, compared to $232.6 million in the same period last year. The company ended the quarter with cash and cash equivalents of $1.16 billion and no outstanding borrowings under its credit facility.
Looking ahead, Dillard's management expressed optimism about the remainder of fiscal 2026, citing a favorable retail environment and ongoing efforts to manage costs amid inflationary pressures. The company plans to continue focusing on enhancing its product offerings and customer experience while navigating the challenges posed by market conditions.
About DILLARD'S, INC.
Dillard’s, Inc. is a leading American department store retailer offering fashion apparel, cosmetics, and home furnishings through its stores and online platform. It operates private label brands, exclusive merchandise, and a private label credit card program. Serving customers primarily in the U.S. South, Midwest, and Southeast, the company emphasizes quality, customer service, and strategic store locations to maintain competitive advantage in a highly competitive retail environment.
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