Dillard's, Inc 10-Q for FY2024 Q3

Dillard's, Inc. (DDS)

10-Q 2023-12-07 For: 2023-10-28

Added on April 06, 2026

About this 10-Q

Dillard's, Inc filed this 10-Q on December 7, 2023, covering the quarter ended October 28, 2023 (FY2024 Q3).

Headline figures

Quarter ended October 28, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.5B; down 4.4% from $1.57B a year earlier
Net income: $155.34M; down 17.3% from net income of $187.91M a year earlier
Diluted EPS: $9.49; down 13.4% from $10.96 a year earlier

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DELAWARE		71-0388071
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock	DDS	New York Stock Exchange


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐
Smaller reporting company	☐	Emerging growth company	☐

		Page
		Number
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited):

	Condensed Consolidated Balance Sheets as of October 28, 2023, January 28, 2023 and October 29, 2022	3

	Condensed Consolidated Statements of Income for the Three and Nine Months Ended October 28, 2023 and October 29, 2022	4

	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended October 28, 2023 and October 29, 2022	5

	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended October 28, 2023 and October 29, 2022	6

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended October 28, 2023 and October 29, 2022	8

	Notes to Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27

Item 4.	Controls and Procedures	28

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	29

Item 1A.	Risk Factors	29

Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	29

Item 5.	Other Information	29

Item 6.	Exhibits	31

SIGNATURES		32


	October 28,		January 28,		October 29,
	2023		2023		2022
Assets
Current assets:
Cash and cash equivalents	$	842,001	$	650,336	$	532,708
Restricted cash		—		9,995		—
Accounts receivable		57,412		56,952		40,476
Short-term investments		51,257		148,902		197,971
Merchandise inventories		1,629,245		1,120,208		1,644,793
Other current assets		85,646		85,453		99,471

Total current assets		2,665,561		2,071,846		2,515,419

Property and equipment (net of accumulated depreciation of $2,699,516, $2,584,708 and $2,647,231, respectively)		1,094,587		1,118,379		1,146,064
Operating lease assets		34,462		33,821		36,663
Deferred income taxes		47,563		42,278		30,841
Other assets		55,761		62,826		63,646

Total assets	$	3,897,934	$	3,329,150	$	3,792,633

Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable and accrued expenses	$	1,181,198	$	828,484	$	1,293,699
Current portion of long-term debt		—		—		44,800
Current portion of operating lease liabilities		8,461		9,702		10,332
Federal and state income taxes		12,500		20,775		7,418

Total current liabilities		1,202,159		858,961		1,356,249

Long-term debt		321,434		321,354		321,327
Operating lease liabilities		26,246		24,164		26,232
Other liabilities		334,457		326,033		279,471
Subordinated debentures		200,000		200,000		200,000
Commitments and contingencies
Stockholders’ equity:
Common stock		1,240		1,240		1,240
Additional paid-in capital		964,119		962,839		958,974
Accumulated other comprehensive loss		(61,689)		(65,722)		(22,254)
Retained earnings		6,126,277		5,648,700		5,619,813
Less treasury stock, at cost		(5,216,309)		(4,948,419)		(4,948,419)

Total stockholders’ equity		1,813,638		1,598,638		1,609,354

Total liabilities and stockholders’ equity	$	3,897,934	$	3,329,150	$	3,792,633


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three Months Ended				Nine Months Ended
	October 28,		October 29,		October 28,		October 29,
	2023		2022		2023		2022
Net sales	$	1,476,362	$	1,544,142	$	4,627,687	$	4,744,430
Service charges and other income		27,872		28,930		87,872		89,311

		1,504,234		1,573,072		4,715,559		4,833,741

Cost of sales		834,537		855,677		2,684,633		2,658,331
Selling, general and administrative expenses		421,825		413,838		1,240,743		1,215,943
Depreciation and amortization		44,707		46,665		135,272		140,793
Rentals		4,932		5,272		14,274		15,667
Interest and debt (income) expense, net		(1,790)		6,957		(1,535)		27,108
Other expense		4,697		1,936		14,093		5,808
Gain on disposal of assets		(4,053)		(2)		(6,006)		(7,240)

Income before income taxes		199,379		242,729		634,085		777,331
Income taxes		44,040		54,820		145,740		174,880

Net income	$	155,339	$	187,909	$	488,345	$	602,451

Earnings per share:
Basic and diluted	$	9.49	$	10.96	$	29.38	$	34.05


	Three Months Ended October 28, 2023
					Accumulated
			Additional		Other
	Common		Paid-in		Comprehensive		Retained		Treasury
	Stock		Capital		Loss		Earnings		Stock		Total
Balance, July 29, 2023	$	1,240	$	964,119	$	(63,034)	$	5,975,028	$	(5,167,837)	$	1,709,516
Net income		—		—		—		155,339		—		155,339
Other comprehensive income		—		—		1,345		—		—		1,345
Purchase of 150,908 shares of treasury stock (including excise tax)		—		—		—		—		(48,472)		(48,472)
Cash dividends declared:
Common stock, $0.25 per share		—		—		—		(4,090)		—		(4,090)
Balance, October 28, 2023	$	1,240	$	964,119	$	(61,689)	$	6,126,277	$	(5,216,309)	$	1,813,638


	Three Months Ended October 29, 2022
					Accumulated
			Additional		Other
	Common		Paid-in		Comprehensive		Retained		Treasury
	Stock		Capital		Loss		Earnings		Stock		Total
Balance, July 30, 2022	$	1,240	$	958,974	$	(22,435)	$	5,435,331	$	(4,924,109)	$	1,449,001
Net income		—		—		—		187,909		—		187,909
Other comprehensive income		—		—		181		—		—		181
Purchase of 98,983 shares of treasury stock		—		—		—		—		(24,310)		(24,310)
Cash dividends declared:
Common stock, $0.20 per share		—		—		—		(3,427)		—		(3,427)
Balance, October 29, 2022	$	1,240	$	958,974	$	(22,254)	$	5,619,813	$	(4,948,419)	$	1,609,354


	Nine Months Ended October 28, 2023
					Accumulated
			Additional		Other
	Common		Paid-in		Comprehensive		Retained		Treasury
	Stock		Capital		Loss		Earnings		Stock		Total
Balance, January 28, 2023	$	1,240	$	962,839	$	(65,722)	$	5,648,700	$	(4,948,419)	$	1,598,638
Net income		—		—		—		488,345		—		488,345
Other comprehensive income		—		—		4,033		—		—		4,033
Issuance of 4,500 shares under equity plans		—		1,280		—		—		—		1,280
Purchase of 865,610 shares of treasury stock (including excise tax)		—		—		—		—		(267,890)		(267,890)
Cash dividends declared:
Common stock, $0.65 per share		—		—		—		(10,768)		—		(10,768)
Balance, October 28, 2023	$	1,240	$	964,119	$	(61,689)	$	6,126,277	$	(5,216,309)	$	1,813,638


	Nine Months Ended October 29, 2022
					Accumulated
			Additional		Other
	Common		Paid-in		Comprehensive		Retained		Treasury
	Stock		Capital		Loss		Earnings		Stock		Total
Balance, January 29, 2022	$	1,240	$	956,653	$	(22,798)	$	5,027,922	$	(4,511,799)	$	1,451,218
Net income		—		—		—		602,451		—		602,451
Other comprehensive income		—		—		544		—		—		544
Issuance of 9,000 shares under equity plans		—		2,321		—		—		—		2,321
Purchase of 1,708,918 shares of treasury stock		—		—		—		—		(436,620)		(436,620)
Cash dividends declared:
Common stock, $0.60 per share		—		—		—		(10,560)		—		(10,560)
Balance, October 29, 2022	$	1,240	$	958,974	$	(22,254)	$	5,619,813	$	(4,948,419)	$	1,609,354


	Retail
(in thousands of dollars)	Operations		Construction		Consolidated
Three Months Ended October 28, 2023
Net sales from external customers	$	1,409,487	$	66,875	$	1,476,362
Gross margin		638,612		3,213		641,825
Depreciation and amortization		44,641		66		44,707
Interest and debt (income) expense, net		(1,581)		(209)		(1,790)
Income before income taxes		198,369		1,010		199,379
Total assets		3,828,418		69,516		3,897,934

Three Months Ended October 29, 2022
Net sales from external customers	$	1,499,072	$	45,070	$	1,544,142
Gross margin		685,643		2,822		688,465
Depreciation and amortization		46,614		51		46,665
Interest and debt (income) expense, net		6,984		(27)		6,957
Income before income taxes		241,863		866		242,729
Total assets		3,737,746		54,887		3,792,633

Nine Months Ended October 28, 2023
Net sales from external customers	$	4,422,952	$	204,735	$	4,627,687
Gross margin		1,934,624		8,430		1,943,054
Depreciation and amortization		135,079		193		135,272
Interest and debt (income) expense, net		(1,078)		(457)		(1,535)
Income before income taxes		631,810		2,275		634,085
Total assets		3,828,418		69,516		3,897,934

Nine Months Ended October 29, 2022
Net sales from external customers	$	4,632,529	$	111,901	$	4,744,430
Gross margin		2,079,008		7,091		2,086,099
Depreciation and amortization		140,628		165		140,793
Interest and debt (income) expense, net		27,154		(46)		27,108
Income before income taxes		775,965		1,366		777,331
Total assets		3,737,746		54,887		3,792,633


	% Change		% of
	2023 - 2022		Net Sales
Retail operations segment
Cosmetics	1.1	%	14	%
Ladies’ apparel	(6.3)		21
Ladies’ accessories and lingerie	(7.6)		13
Juniors’ and children’s apparel	(8.7)		10
Men’s apparel and accessories	(7.1)		19
Shoes	(7.3)		15
Home and furniture	(4.7)		3
			95
Construction segment	48.4		5
Total			100	%


									Three		Nine
	Three Months Ended				Nine Months Ended				Months		Months
	October 28,		October 29,		October 28,		October 29,		$ Change		$ Change
(in thousands of dollars)	2023		2022		2023		2022		2023 - 2022		2023 - 2022
Service charges and other income:
Retail operations segment
Income from Wells Fargo Alliance	$	16,784	$	16,761	$	50,908	$	50,310	$	23	$	598
Shipping and handling income		8,431		9,533		27,782		29,603		(1,102)		(1,821)
Other		2,594		2,590		8,992		9,204		4		(212)
		27,809		28,884		87,682		89,117		(1,075)		(1,435)
Construction segment		63		46		190		194		17		(4)
Total service charges and other income	$	27,872	$	28,930	$	87,872	$	89,311	$	(1,058)	$	(1,439)


	Nine Months Ended
	October 28,		October 29,
	2023		2022
Operating activities:
Net income	$	488,345	$	602,451
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and other deferred costs		136,482		141,978
Gain on disposal of assets		(6,006)		(7,240)
Accrued interest on short-term investments		(4,219)		(1,155)
Changes in operating assets and liabilities:
Increase in accounts receivable		(460)		(699)
Increase in merchandise inventories		(509,037)		(564,615)
Decrease (increase) in other current assets		4,610		(18,416)
Decrease (increase) in other assets		188		(213)
Increase in trade accounts payable and accrued expenses and other liabilities		354,638		425,248
Decrease in income taxes payable		(17,434)		(18,918)

Net cash provided by operating activities		447,107		558,421

Investing activities:
Purchase of property and equipment and capitalized software		(104,679)		(94,771)
Proceeds from disposal of assets		6,254		8,095
Proceeds from insurance		4,477		4,886
Purchase of short-term investments		(148,098)		(196,816)
Proceeds from maturities of short-term investments		249,962		—

Net cash provided by (used in) investing activities		7,916		(278,606)

Financing activities:
Cash dividends paid		(10,104)		(11,013)
Purchase of treasury stock		(263,249)		(452,853)

Net cash used in financing activities		(273,353)		(463,866)

Increase (decrease) in cash and cash equivalents		181,670		(184,051)
Cash and cash equivalents and restricted cash, beginning of period		660,331		716,759

Cash and cash equivalents, end of period	$	842,001	$	532,708


Construction
	October 28,		January 28,		October 29,		January 29,
(in thousands of dollars)	2023		2023		2022		2022
Accounts receivable	$	47,089	$	44,286	$	31,111	$	25,912
Costs and estimated earnings in excess of billings on uncompleted contracts		2,069		798		3,512		2,847
Billings in excess of costs and estimated earnings on uncompleted contracts		9,120		10,909		9,969		6,298


	Three Months Ended
	October 28,			October 29,
	2023			2022
Net sales (in millions)	$	1,476.4		$	1,544.1
Retail stores sales trend		(6)	%		3	%
Comparable retail stores sales trend		(6)	%		3	%
Gross margin (in millions)	$	641.8		$	688.5
Gross margin as a percentage of net sales		43.5	%		44.6	%
Retail gross margin as a percentage of retail net sales		45.3	%		45.7	%
Selling, general and administrative expenses as a percentage of net sales		28.6	%		26.8	%
Cash flow provided by operations (in millions)*	$	447.1		$	558.4
Total retail store count at end of period		273			277
Retail sales per square foot	$	31		$	33
Retail store inventory trend		(1)	%		8	%
Annualized retail merchandise inventory turnover		2.2			2.4


	Nine Months Ended
	October 28,		October 29,
(in thousands of dollars)	2023		2022		$ Change
Operating Activities	$	447,107	$	558,421	$	(111,314)
Investing Activities		7,916		(278,606)		286,522
Financing Activities		(273,353)		(463,866)		190,513
Total Increase (Decrease) in Cash and Cash Equivalents	$	181,670	$	(184,051)	$	365,721



				(c) Total Number of Shares	(d) Approximate Dollar Value of
				Purchased as Part	Shares that May
	(a) Total Number			of Publicly	Yet Be Purchased
	of Shares	(b) Average Price		Announced Plans	Under the Plans
Period	Purchased	Paid per Share		or Programs	or Programs
July 30, 2023 through August 26, 2023	—	$	—	—	$	458,147,831
August 27, 2023 through September 30, 2023	73,626		325.87	73,626		434,155,300
October 1, 2023 through October 28, 2023	77,282		310.51	77,282		410,158,174
Total	150,908	$	318.01	150,908	$	410,158,174

Number		Description

31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Co-Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.3		Certification of Co-Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

32.2		Certification of Co-Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

32.3		Certification of Co-Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

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		DILLARD’S, INC.
		(Registrant)


Date:	December 7, 2023	/s/ Phillip R. Watts
		Phillip R. Watts
		Senior Vice President, Co-Principal Financial Officer and Principal Accounting Officer

		/s/ Chris B. Johnson
		Chris B. Johnson
		Senior Vice President and Co-Principal Financial Officer

Date:	December 7, 2023

		/s/ William Dillard, II
		William Dillard, II
		Chairman of the Board and Chief Executive Officer