On May 14, 2026, Dillard’s, Inc. (NYSE: DDS) released its financial results for the first quarter, reflecting a robust performance with notable growth in sales and profitability. For the 13 weeks ending May 2, 2026, the company reported a solid 3% increase in total retail sales, alongside a significant rise in net income driven primarily by a favorable legal settlement.

1. Executive Insights

William T. Dillard, II, Chief Executive Officer of Dillard’s, expressed optimism about the company's performance, stating, “We are pleased to report a good start to 2026 with a profitable 3% sales growth supported by an increased 45.8% retail gross margin. We continue to focus on motivating our customer with newness in our merchandise assortment.” This statement underscores the company's strategic focus on innovation and customer engagement.

2. Financial Highlights

The financial results for the first quarter of 2026, compared to the same period in 2025, are as follows:

Total Retail Sales: Increased by 3% to $1.518 billion from $1.468 billion.

Comparable Store Sales: Also grew by 3%.

Net Income: Rose significantly to $250.6 million, up from $163.8 million.

Earnings Per Share (EPS): Increased to $16.04 from $10.39.

Retail Gross Margin: Improved to 45.8% of sales compared to 45.5% in the previous year.

Operating Expenses: Increased to $444.0 million (28.3% of sales) from $421.7 million (27.6% of sales).

Ending Inventory: Saw a 3% increase.

Breakdown of Net Income

The substantial increase in net income is largely attributed to a one-time pre-tax gain of $104.1 million from a legal settlement regarding payment card interchange fees, which added approximately $5.10 per share after tax.

3. Sales Performance

Dillard’s reported net sales of $1.568 billion, which includes the operations of its construction business, CDI Contractors, LLC. The total retail sales, which exclude CDI, reached $1.518 billion. Notably, all merchandise categories showed growth, particularly in home and furniture, ladies’ accessories, lingerie, and shoes. Moderate increases were also seen in men's apparel, juniors', children's apparel, and cosmetics.

Gross Margin Analysis

The consolidated gross margin for the quarter was reported at 44.5%, up from 43.9% year-over-year. Retail gross margin also saw a slight increase, reflecting solid performance in various categories, with notable improvements in shoes and ladies’ accessories.

4. Operating Expenses

Operating expenses increased by $22.3 million, primarily due to higher payroll and related expenses. This rise in costs, while significant, was partially offset by the increase in sales and efficiency measures within the company.

5. Store Expansion

Dillard's continues to expand its footprint, having recently opened a new 160,000 square foot store in The Mall at Fairfield Commons in Beavercreek, Ohio. Currently, Dillard’s operates 272 stores across 30 states, including 28 clearance centers, totaling 46.1 million square feet.

6. Looking Ahead

For the remainder of 2026, Dillard's has provided forward-looking estimates, including projected depreciation and amortization of approximately $175 million and expected capital expenditures of around $130 million. However, the company cautions that actual results may vary significantly due to various market conditions.

In summary, Dillard's first-quarter results reflect a strong start to the fiscal year, buoyed by strategic growth initiatives and a favorable legal outcome. The company’s focus on enhancing its merchandise assortment and customer engagement appears to be paying off, setting a positive tone for the remainder of 2026.

Original press release