Overview

• U.S. department store operator's Q1 revenue grew 3%, beating analyst expectations

• Net income and basic EPS for Q1 beat analyst estimates, aided by litigation settlement gain

• Retail gross margin rose to 45.8% from 45.5% yr/yr

Outlook

• Company estimates 2026 depreciation and amortization at $175 mln

• Company expects 2026 capital expenditures of $130 mln

Result Drivers

• LITIGATION SETTLEMENT - Net income and EPS were boosted by a $104.1 mln pre-tax gain from a favorable settlement of a payment card interchange fee lawsuit

• CATEGORY SALES MIX - All merchandise categories saw sales increases, with significant growth in home and furniture, ladies’ accessories and lingerie, and shoes

• HIGHER OPERATING EXPENSES - Operating expenses rose to $444 mln, mainly due to increased payroll and payroll-related costs

Company press release: ID:nGNX1ZHyz

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q1 Revenue	Beat	$1.57 bln	$1.55 bln (3 Analysts)
Q1 Net Income	Beat	$250.60 mln	$161.74 mln (3 Analysts)
Q1 Basic EPS	Beat	$16.04	$10.37 (3 Analysts)
Q1 Operating Expenses		$444 mln

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 2 "hold" and 2 "sell" or "strong sell"

• The average consensus recommendation for the department stores peer group is "buy."

• Wall Street's median 12-month price target for Dillard's Inc is $557.50, about 4.6% above its May 13 closing price of $532.92

• The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 19 three months ago

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