Dillard’s Retail Sales Growth Holds at 1% in Third Quarter

The Tip Desk · November 12, 2026 · 3 min read

Net income was $130.9 million, or $8.38 a share, as retail gross margin returned to 45.3% of sales.

Dillard’s, Inc. (DDS), the department-store operator, reported net income of $130.9 million, or $8.38 a share, for the 13 weeks ended October 31, 2026, compared with $129.8 million, or $8.31 a share, a year earlier.

Total retail sales, which exclude the company’s CDI Contractors construction unit, rose 1% to $1.418 billion from $1.401 billion. Comparable store sales also increased 1%. That pace matched the second quarter and was slower than the 3% retail sales growth recorded in the first quarter. Chief Executive Officer William T. Dillard, II said the company achieved 1% sales growth on top of last year’s 3% increase, supporting a 45.3% retail gross margin.

Retail gross margin of 45.3% of sales matched the year-ago rate and recovered from 40.9% in the second quarter, when $37.2 million of IEEPA tariff refunds had lifted the rate 260 basis points. The company said it did not expect additional significant IEEPA tariff refunds. Consolidated gross margin was 43.6% of sales.

By category, sales increased moderately in home and furniture, men’s apparel and accessories, ladies’ accessories and lingerie, and juniors’ and children’s apparel. Cosmetics rose slightly. Shoes were essentially flat and ladies’ apparel decreased slightly. Retail gross margin increased moderately in men’s apparel and accessories and home and furniture, slightly in shoes, decreased slightly in ladies’ apparel, cosmetics and ladies’ accessories and lingerie, and declined moderately in juniors’ and children’s apparel.

Operating expenses were $448.9 million, or 30.3% of sales, compared with $440.4 million, or 30.0% of sales, a year earlier. The company said the increase was largely due to higher payroll expense. That expense ratio was higher than 29.4% of sales in the second quarter and 28.3% in the first quarter. Ending inventory increased 4%.

Cash and short-term investments were approximately $1.385 billion, compared with $1.334 billion a year earlier. The company operates 272 Dillard’s stores, including 28 clearance centers, spanning 30 states and totaling 46.1 million square feet, plus an Internet store at dillards.com. It announced the upcoming closure of its 50,000-square-foot Boynton Beach Mall Clearance Center in Florida, expected in January 2027.

For the 39 weeks ended October 31, 2026, net income was $479.1 million, or $30.68 a share, compared with $366.5 million, or $23.39 a share, a year earlier. Total retail sales for the 39 weeks rose 2% to $4.391 billion from $4.315 billion, and comparable store sales increased 2%. Retail gross margin for the 39 weeks was 44.0% of sales, compared with 42.9%; the company said the rate was positively impacted 80 basis points by $37.2 million of IEEPA tariff refunds.

Included in 39-week net income were $37.2 million of IEEPA tariff refunds ($28.4 million after tax, or $1.82 a share) and a pre-tax gain on litigation settlement, net of legal fees, of $104.1 million ($79.6 million after tax, or $5.10 a share) related to a favorable settlement of a long-standing lawsuit involving payment card interchange fees. A year earlier, 39-week net income included a pretax gain of $5.5 million ($4.2 million after tax, or $0.27 a share) primarily related to the sale of four properties.

Operating expenses for the 39 weeks were $1.337 billion, or 29.3% of sales, compared with $1.296 billion, or 28.7% of sales. The company said the increase was largely due to higher payroll expenses. Dillard’s is providing estimates for the 52-week period ending January 30, 2027, including depreciation and amortization of $175 million, rentals of $17 million, net interest and debt income of $(12) million, and capital expenditures of $100 million.