Dillard's Reports Q1 Fiscal 2025 Results with Decreased Net Income and Sales

Dillard's, Inc. reported its financial results for the first quarter of fiscal 2025, revealing a net income of $163.8 million, or $10.39 per share, compared to $180.0 million, or $11.09 per share, in the same period last year. Total net sales for the quarter were $1.53 billion, a decrease of approximately 1.3% from $1.55 billion in the prior year. The decline in sales was attributed to a 2% drop in retail operations, which includes comparable store sales that fell by 1%. The company's gross margin also decreased to 43.9% from 44.6% year-over-year, reflecting challenges in maintaining profitability amid fluctuating market conditions.

In terms of operational metrics, Dillard's reported a 3% decrease in the number of sales transactions, although the average transaction value increased by 2%. The retail segment's inventory rose by 6% compared to the previous year, indicating a potential overstock situation. The company operated 272 stores, including 28 clearance centers, as of May 3, 2025, down from 274 stores a year earlier. The construction segment, however, saw an increase in sales, contributing $60.9 million, up 8% from the previous year, driven by heightened construction activity.

Dillard's continued to focus on expense management, with selling, general, and administrative expenses decreasing slightly to $421.7 million, or 27.6% of sales, from $426.7 million, or 27.5% of sales, in the prior year. The company also reported a significant reduction in interest and debt expense, which fell to a net income of $(822,000) from $(3.5 million) a year ago, primarily due to decreased interest income. The company’s cash flow from operating activities was $232.6 million, down from $244.4 million in the same quarter last year.

Strategically, Dillard's has been active in its stock repurchase program, buying back approximately 276,000 shares for $98 million at an average price of $355.65 per share. The company has $175 million remaining under its stock repurchase authorization. Additionally, Dillard's has transitioned its private label credit card program from Wells Fargo to Citibank, which is expected to impact future cash flows, although initial earnings from the new program are anticipated to be lower than those from the previous partnership.

Looking ahead, Dillard's management remains cautious about the economic environment, particularly regarding inflation and potential trade restrictions. The company is committed to aligning its expenses with sales performance and is focused on maintaining its operational efficiency. While the outlook for the remainder of fiscal 2025 remains uncertain, Dillard's plans to continue monitoring market conditions closely and adjust its strategies accordingly.