Tariff Refunds Boost Bottom Line for Dillard’s in Second Quarter
Thu, August 13, 2026 at 5:20 PM GMT+3 2 min read
It wasn't much, but they'll take it.
Dillard's Inc. reported early Thursday that total retail sales and comparable-store sales nudged ahead 1 percent in the second quarter ended Aug. 1. In the same period, tariff refunds helped push the company's net income ahead 34 percent.
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In the 13-week period, net income rose to $97.7 million, or $6.25 a share, compared to $72.8 million, or $4.66 a share in the prior year. This includes $37.2 million, or $28.4 million after tax, in refunds from the International Emergency Economic Powers Act. Total retail sales in the period rose to $1.46 billion and gross margins ticked up to 40.9 percent of sales from 38.1 percent in the second quarter of last year.
During the second quarter, sales increased "significantly" in women's accessories and lingerie and moderately in home and furniture, the company said. In shoes, men's apparel and accessories and cosmetics, the company noted "slight sales increases," and in juniors' and children's apparel and women's apparel, sales "decreased moderately," Dillard's said.
In terms of gross margin by category, and adjusted for the tariff refund, Dillard's posted a moderate increase in women's apparel, a slight increase in cosmetics, home and furniture, flat gross margin in juniors' and children's apparel and a slight decrease in men's apparel and accessories and shoes. Retail gross margin fell moderately in women's accessories and lingerie, the company said.
"Our 1 percent sales increase points to a somewhat resilient consumer," said William T. Dillard 2nd, chief executive officer. "Retail gross margin of 40.9 percent, boosted by tariff rebates, helped grow cash flow and the bottom line. We ended the quarter with over $1.2 billion in cash and short-term investments after paying off $96 million in debt."
Neil Saunders of GlobalData Retail said that while Dillard's sales were "not spectacular, they are solid." He cited the company's reluctance to launch initiatives that led to a growth spike, opting instead to get the everyday fundamentals right. But while this has led to customer loyalty, those same shoppers have become a bit more selective and cautious in their spending, he said, leading to the small decrease in womenswear and other categories.
But this has not led to a knee-jerk reaction to increase discounts to boost short-term sales, Saunders said, a strategy that has helped protect margins.
"Dillard's management are good stewards of the company," he said. "Their steady approach may not always produce spectacular numbers, but it does provide the stability that underpins the economics of the business and gives them longevity in a disruptive retail world."
Dillard's operates 272 stores, including 28 clearance centers in 30 states.
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