US' Dillard's Q2 FY25 profit eases slightly as sales tick higher

The consolidated gross margin declined to 36.6 per cent of sales from 37.6 per cent, while retail gross margin eased to 38.1 per cent from 39.1 per cent, reflecting a modest dip in men’s apparel and accessories and a sharp drop in ladies’ apparel. Margin improvements were seen in shoes and accessories, while ladies’ apparel decreased significantly, Dillard’s said in a press release.

The operating expenses were nearly flat at $434.2 million, representing 28.7 per cent of sales compared with 29.1 per cent YoY.

Juniors’ and children’s apparel, along with ladies’ accessories and lingerie, delivered strong performances.

Meanwhile, the net income in the first half (H1) of FY25 was $236.7 million, or $15.08 per share. The net sales in this half reached $3.04 billion. The total retail sales were essentially flat at $2.92 billion, with comparable store sales unchanged.

The retail gross margin slipped to 41.8 per cent of sales from 42.7 per cent in H1 FY24. The operating expenses fell slightly to $855.9 million, or 28.1 per cent of sales, due to lower payroll costs.

Dillard’s ended the quarter with $1.01 billion in cash and equivalents. Merchandise inventory increased 2 per cent YoY to $1.22 billion. Operating cash flow for the first half jumped to $319.4 million from $175.9 million, driven by favourable working capital changes.

Operating expenses in H1 were $855.9 million (28.1 per cent of sales) compared to $860.3 million (28.3 per cent of sales) primarily due to decreased payroll expense.

“We were happy to achieve a sales increase for the first time in a while and encouraged by strengthening sales trends in July. In an operating environment that changes daily, we focused on controlling inventory, ending up 2 per cent compared to 6 per cent at the end of first quarter,” said William T Dillard, II, chief executive officer (CEO) at Dillard’s.

For fiscal 2025, ending January 31, 2026, Dillard’s expects depreciation and amortisation of $180 million, capital expenditures of $120 million, and net interest income of about $7 million. Management cautioned that results remain sensitive to the volatile operating environment.

Dillard’s operates 272 stores, including 28 clearance centres, across 30 states in US, covering 46.2 million square feet, alongside its e-commerce platform at the official site of Dillard, added the release.

ALCHEMPro News Desk (SG)