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What changed in DILLARD'S, INC.'s 10-K — 2025 vs 2026

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Paragraph-level year-over-year comparison of DILLARD'S, INC.'s 2025 and 2026 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2026 report.

+205 added−212 removedSource: 10-K (2025-03-28) vs 10-K (2024-03-29)

Top changes in DILLARD'S, INC.'s 2026 10-K

205 paragraphs added · 212 removed · 175 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeAs of December 25, 2023, approximately 73% of the salaried managers at our stores were promoted from hourly store positions. Diversity and inclusion . The Company has a diverse customer base and seeks to achieve that same diversity in its workforce.
Biggest changeIn order to ensure that qualified candidates are aware of store promotion opportunities, each store is directed to post promotion opportunities for supervisory positions. As of December 23, 2024, approximately 75% of the salaried managers at our stores were promoted from hourly store positions.
The Company develops talent by investing in both formalized classroom training, specialized training for our sales management team, ongoing mentorship programs and on-the-job experience. We seek to create an engaged workforce through open door policies and promotion opportunities.
The Company develops talent by investing in formalized classroom training, specialized training for our sales management team, ongoing mentorship programs and on-the-job experience. We seek to create an engaged workforce through open door policies and promotion opportunities.
The following table summarizes the percentage of net sales by segment and major product line: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Net Sales ​ Fiscal 2023 ​ Fiscal 2022 ​ Fiscal 2021 Retail operations segment: ​ ​ ​ ​ ​ ​ ​ Cosmetics 16 % 15 % 14 % Ladies' apparel 20 21 21 ​ Ladies' accessories and lingerie 14 14 15 ​ Juniors' and children's apparel 9 9 10 ​ Men's apparel and accessories 19 20 19 ​ Shoes 14 15 15 ​ Home and furniture 4 4 4 ​ ​ 96 98 98 ​ Construction segment 4 2 2 ​ Total 100 % 100 % 100 % ​ Additional information regarding our business, results of operations and financial condition, including information pertaining to our reporting segments, can be found in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 hereof and in Note 2 in the “Notes to Consolidated Financial Statements” in Item 8 hereof.
The following table summarizes the percentage of net sales by segment and major product line: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Net Sales ​ Fiscal 2024 ​ Fiscal 2023 ​ Fiscal 2022 Retail operations segment: ​ ​ ​ ​ ​ ​ ​ Cosmetics 16 % 16 % 15 % Ladies' apparel 20 20 21 ​ Ladies' accessories and lingerie 14 14 14 ​ Juniors' and children's apparel 9 9 9 ​ Men's apparel and accessories 19 19 20 ​ Shoes 14 14 15 ​ Home and furniture 4 4 4 ​ ​ 96 96 98 ​ Construction segment 4 4 2 ​ Total 100 % 100 % 100 % ​ Additional information regarding our business, results of operations and financial condition, including information pertaining to our reporting segments, can be found in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 hereof and in Note 2 in the “Notes to Consolidated Financial Statements” in Item 8 hereof.
Of the Company’s full-time associates, approximately 86% work in the retail stores. We focus on attracting and retaining excellent associates at the store level by providing compensation and benefits packages that are competitive within the applicable market. Training and talent development .
Of the Company’s full-time associates, approximately 87% work in the retail stores. We focus on attracting and retaining excellent associates at the store level by providing compensation and benefits packages that are competitive within the applicable market. Training and talent development .
Our corporate offices are located at 1600 Cantrell Road, Little Rock, Arkansas 72201, telephone: 501-376-5200. 1 For purposes of this section, all figures are based on calendar year 2023. 3 Table of Contents
Our corporate offices are located at 1600 Cantrell Road, Little Rock, Arkansas 72201, telephone: 501-376-5200. 1 For purposes of this section, all figures are based on calendar year 2024. ​ 3 Table of Contents
Pursuant to the Wells Fargo Alliance, we receive on-going cash compensation from Wells Fargo based upon the portfolio’s earnings. The compensation received from the portfolio is determined monthly and has no recourse provisions. We participate in the marketing of the private label cards, which includes the cost of customer reward programs.
Pursuant to the Citibank Alliance, we receive on-going cash compensation from Citi based upon the portfolio’s earnings. The compensation received from the portfolio is determined monthly and has no recourse provisions. We participate in the marketing of the private label cards, which includes the cost of customer reward programs.
We seek to expand the number and use of the private label cards by, among other things, providing incentives to sales associates to open new credit accounts, which generally can be opened while a customer is visiting one of our stores or online. Customers who open accounts are rewarded with discounts on future purchases.
We seek to expand the number and use of the private label cards by, among other things, providing incentives to sales associates to encourage customers to make applications for new accounts, which generally can be opened while a customer is visiting one of our stores or online. Customers who open accounts are rewarded with discounts on future purchases.
Approximately 20,200 were full-time associates (greater than 35 hours per week), 7,100 were part-time associates (20-35 hours per week) and 2,300 were limited status associates (less than 20 hours per week) . 1 None of our associates are represented by a union.
Approximately 20,100 were full-time associates (greater than 35 hours per week), 6,300 were part-time associates (20-35 hours per week) and 2,400 were limited status associates (less than 20 hours per week). 1 None of our associates are represented by a union.
As of February 3, 2024, we operated 273 Dillard’s stores, including 28 clearance centers, and an Internet store at dillards.com offering a wide selection of merchandise including fashion apparel for women, men and children, accessories, cosmetics, home furnishings and other consumer goods.
As of February 1, 2025, we operated 272 Dillard’s stores, including 28 clearance centers, and an Internet store at dillards.com offering a wide selection of merchandise including fashion apparel for women, men and children, accessories, cosmetics, home furnishings and other consumer goods.
We have no long-term purchase commitments or arrangements with any of our suppliers, but we consider our relationships to be strong and mutually beneficial. Our fiscal year ends on the Saturday nearest January 31 of each year.
We have no long-term purchase commitments or arrangements with any of our suppliers, but we consider our relationships to be strong and mutually beneficial. Our fiscal year ends on the Saturday nearest January 31 of each year. Fiscal year 2024 ended on February 1, 2025 and contained 52 weeks.
Under the Wells Fargo Alliance, Wells Fargo establishes and owns private label card accounts for our customers, retains the benefits and risks associated with the ownership of the accounts, provides key customer service functions, including new account openings, transaction authorization, billing adjustments and customer inquiries, receives the finance charge income and incurs the bad debts associated with those accounts.
Citi retains the benefits and risks associated with the ownership of the private label card accounts, provides key customer service functions, including new account openings, transaction authorization, billing adjustments and customer inquiries, receives the finance charge income and incurs the bad debts associated with those accounts.
Fiscal year 2023 ended on February 3, 2024 and contained 53 weeks, and fiscal years 2022 and 2021 ended on January 28, 2023 and January 29, 2022, respectively, and each contained 52 weeks. 2 Table of Contents Human Capital As of December 25, 2023, the Company employed approximately 29,600 associates.
Fiscal year 2023 ended on February 3, 2024 and contained 53 weeks. Fiscal year 2022 ended on January 28, 2023 and contained 52 weeks. 2 Table of Contents Human Capital As of December 23, 2024, the Company employed approximately 28,800 associates.
Due to holiday buying patterns, sales for that period average approximately one-third of annual sales. Additionally, working capital requirements fluctuate during the year, increasing during the second half of the year in anticipation of the holiday season. We purchase merchandise from many sources and do not believe that we are dependent on any one supplier.
Additionally, working capital requirements fluctuate during the year, increasing during the second half of the year in anticipation of the holiday season. We purchase merchandise from many sources and do not believe that we are dependent on any one supplier.
In addition, in order to ensure that all qualified candidates are aware of store promotion opportunities, each store posts promotion opportunities for supervisory positions. Available Information The information contained on our website is not incorporated by reference into this Annual Report on Form 10-K (this “Annual Report”) and should not be considered to be a part of this Annual Report.
Available Information The information contained on our website is not incorporated by reference into this Annual Report on Form 10-K (this “Annual Report”) and should not be considered to be a part of this Annual Report.
The term of the agreement is 10 years with automatic extensions for successive two-year terms unless the agreement is terminated by a party in accordance with the terms and conditions of the agreement. Our earnings depend to a significant extent on the results of operations for the last quarter of our fiscal year.
The term of the new Citi agreement is 10 years with automatic extensions for successive two-year terms unless the agreement is terminated by either party in accordance with the terms and conditions of the agreement.
(“Wells Fargo”) owns and manages Dillard’s private label credit cards, including credit cards co-branded with American Express (collectively “private label cards”) under a long-term marketing and servicing alliance (“Wells Fargo Alliance”).
(“Wells Fargo”) previously owned and managed Dillard’s private label credit cards, including credit cards co-branded with American Express under a long-term marketing and servicing alliance (“Wells Fargo Alliance”). In January 2024, the Company announced that it entered into a new agreement with Citibank, N.A.
Removed
Private label card customers are sometimes offered advance notice of sale events. Wells Fargo administers the loyalty program that rewards customers for private label card usage. In January 2024, the Company announced that it entered into a new agreement with Citibank, N.A. (“Citi”) to provide a credit card program for Dillard’s customers, replacing the existing Wells Fargo Alliance.
Added
(“Citi”) to provide the private label credit card program for Dillard’s customers under a new alliance (“Citibank Alliance”), replacing the existing credit card program under the Wells Fargo Alliance upon its termination in September 2024. The new program launched on August 19, 2024 for new Dillard’s credit applicants. Existing accounts transferred from Wells Fargo to Citi on September 16, 2024.
Removed
The Dillard’s credit card program offered by Citi will include a new co-branded Mastercard Incorporated card (“Mastercard”) as well as a private label credit card. The new co-branded Mastercard will replace the existing co-branded card. Additionally, Citi will provide customer service functions and support certain Dillard’s marketing and loyalty program activities related to the new program.
Added
Under the Citibank Alliance, Citi establishes, owns and manages Dillard’s private label credit cards, including a new co-branded Mastercard Incorporated card (“Mastercard,” collectively, the “private label cards”). The new co-branded Mastercard replaced the previous co-branded card.
Removed
The companies expect to launch the new program in late summer 2024 for new Dillard’s credit applicants. The transfer of existing accounts to Citi is expected in the fall of 2024.
Added
Citi supports certain Dillard’s marketing and loyalty program activities related to the new program.
Removed
As of December 25, 2023, approximately 74% of our store associates were women, and approximately 55% of our store associates were non-white. In its efforts to promote diversity within our store positions, the Company has developed and made available to store level hiring managers a Diversity and Inclusion training curriculum.
Added
Private label card customers are sometimes offered advance notice of sale events. Our earnings depend to a significant extent on the results of operations for the last quarter of our fiscal year. Due to holiday buying patterns, sales for that period average approximately one-third of annual sales.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWhile recent tariffs and modifications to trade agreements have not resulted in a material impact on our cash flows, financial condition and results of operations, any additional actions, if ultimately enacted, could negatively impact our ability and the ability of our third-party vendors and suppliers to source products from foreign jurisdictions and could lead to an increase in the cost of goods and adversely affect our profitability. 8 Table of Contents Other trade restrictions imposed by the United States Government, including increased tariffs or quotas, embargoes, safeguards, and customs restrictions against apparel items, as well as United States or foreign labor strikes, work stoppages, or boycotts, could increase the cost or reduce the supply of merchandise available to us or may require us to modify our current business practices, any of which could adversely affect our profitability.
Biggest changeOther trade restrictions imposed by the United States Government, including increased tariffs or quotas, embargoes, safeguards, and customs restrictions against apparel items, as well as United States or foreign labor strikes, work stoppages, or boycotts, could increase the cost or reduce the supply of merchandise available to us or may require us to modify our current business practices, any of which could adversely affect our profitability.
Credit card operations are subject to numerous federal and state laws that impose disclosure and other requirements upon the origination, servicing, and enforcement of credit accounts, and limitations on the amount of finance charges and fees that may be charged by a credit card provider, such as the Consumer Financial Protection Bureau’s recent amendment to Regulation Z to limit the dollar amounts credit card companies can charge for late fees, which we expect could have a material adverse effect on the income and cash flows from our private label credit card program.
Credit card operations are subject to numerous federal and state laws that impose disclosure and other requirements upon the origination, servicing, and enforcement of credit accounts, and limitations on the amount of finance charges and fees that may be charged by a credit card provider, such as the Consumer Financial Protection Bureau’s amendment to Regulation Z to limit the dollar amounts credit card companies can charge for late fees, which we expect could have a material adverse effect on the income and cash flows from our private label credit card program.
In addition, changes in credit card use, payment patterns, or default rates could be affected by a variety of economic, legal, social, or other factors over which we have no control and cannot predict with certainty. Such changes could also negatively impact Wells Fargo’s ability to facilitate consumer credit or increase the cost of credit to the cardholders.
In addition, changes in credit card use, payment patterns, or default rates could be affected by a variety of economic, legal, social, or other factors over which we have no control and cannot predict with certainty. Such changes could also negatively impact Citi’s ability to facilitate consumer credit or increase the cost of credit to the cardholders.
In late fiscal 2021, the United States Government enacted the Uyghur Forced Labor Prevention Act (“UFLPA”), which presumes goods produced in the Xinjiang Region, or with labor linked to specified Chinese government-sponsored labor programs, were produced using forced labor and prohibits importation of such goods into the United States absent clear and convincing evidence proving otherwise.
In late fiscal 2021, the United States 8 Table of Contents Government enacted the Uyghur Forced Labor Prevention Act (“UFLPA”), which presumes goods produced in the Xinjiang Region, or with labor linked to specified Chinese government-sponsored labor programs, were produced using forced labor and prohibits importation of such goods into the United States absent clear and convincing evidence proving otherwise.
Our inability to continue to generate sufficient cash flows to support these activities or the lack of available financing in adequate amounts and on appropriate terms when needed could adversely affect our financial performance including our earnings per share. Our profitability may be adversely impacted by weather conditions.
Our inability to continue to generate sufficient cash flows to support these activities or 5 Table of Contents the lack of available financing in adequate amounts and on appropriate terms when needed could adversely affect our financial performance including our earnings per share. Our profitability may be adversely impacted by weather conditions.
Due to the Company’s concentration of stores in energy producing regions, volatile conditions in these regions could adversely affect the Company’s sales. Consumer purchases of discretionary items and other retail products generally decline during recessionary periods, and also may decline at other times when 6 Table of Contents changes in consumer spending patterns affect us unfavorably.
Due to the Company’s concentration of stores in energy producing regions, volatile conditions in these regions could adversely affect the Company’s sales. Consumer purchases of discretionary items and other retail products generally decline during recessionary periods, and also may decline at other times when changes in consumer spending patterns affect us unfavorably.
In addition, any significant decreases in shopping mall traffic could also have an adverse effect on our results of operations. Our business is dependent upon our ability to accurately predict rapidly changing fashion trends, customer preferences and other fashion-related factors.
In addition, any significant decreases in shopping mall traffic could also have an adverse effect on our results of operations. 6 Table of Contents Our business is dependent upon our ability to accurately predict rapidly changing fashion trends, customer preferences and other fashion-related factors.
Although we believe that our receiving and distribution process is efficient and that we have appropriate contingency plans, unforeseen disruptions in operations due to fire, severe weather conditions, natural disasters or other catastrophic events, labor disagreements or other shipping problems may result in the loss of inventory and/or delays in the delivery of merchandise to our stores and customers. 4 Table of Contents Current store locations may become less desirable, and desirable new locations may not be available for a reasonable price, if at all, either of which could adversely affect our results of operations.
Although we believe that our receiving and distribution process is efficient and that we have appropriate contingency plans, unforeseen disruptions in operations due to fire, severe weather conditions, natural disasters or other catastrophic events, labor disagreements or other shipping problems may result in the loss of inventory and/or delays in the delivery of merchandise to our stores and customers, which could have an adverse effect on our financial condition or results of operations. 4 Table of Contents Current store locations may become less desirable, and desirable new locations may not be available for a reasonable price, if at all, either of which could adversely affect our results of operations.
We rely on third-party service providers to provide hardware, software and services necessary to 11 Table of Contents operate our information technology systems, and the same issues could occur at those third parties and have an effect on our operational technology or data.
We rely on third-party service providers to provide hardware, software and services necessary to operate our information technology systems, and the same issues could occur at those third parties and have an effect on our operational technology or data.
The 10 Table of Contents payment methods that we offer also subject us to potential fraud and theft by persons who seek to obtain unauthorized access to or exploit any weaknesses that may exist in the payment systems.
The payment methods that we offer also subject us to potential fraud and theft by persons who seek to obtain unauthorized access to or exploit any weaknesses that may exist in the payment systems.
The income and cash flow that the Company receives from the Wells Fargo Alliance is dependent upon a number of factors including the level of sales on Wells Fargo accounts, the level of balances carried on the Wells Fargo accounts by Wells Fargo customers, payment rates on Wells Fargo accounts, finance charge rates and other fees on Wells Fargo accounts, the level of credit losses for the Wells Fargo accounts, Wells Fargo’s ability to extend credit to our customers as well as the cost of customer rewards programs, all of which can vary based on changes in federal and state banking and consumer protection laws and from a variety of economic, legal, social and other factors that we cannot control.
The income and cash flow that the Company receives from the Citibank Alliance is dependent upon a number of factors including the level of sales on Citi accounts, the level of balances carried on the Citi accounts by Citi customers, payment rates on Citi accounts, finance charge rates and other fees on Citi accounts, the level of credit losses for the Citi accounts, Citi’s ability to extend credit to our customers as well as the cost of customer 9 Table of Contents rewards programs, all of which can vary based on changes in federal and state banking and consumer protection laws and from a variety of economic, legal, social and other factors that we cannot control.
The income and cash flow that the Company will receive from the new program with Citi will depend on the same factors that impact the Wells Fargo Alliance as discussed above. Any material decrease could adversely affect our operating results and cash flows.
The income and cash flow that the Company will receive from the new program with Citi will depend on the same factors that impacted the Wells Fargo Alliance. Any material decrease could adversely affect our operating results and cash flows.
To the extent that these adjustments result in an increase, a reduction or an elimination of previously reported contract profit, we are required to recognize a credit or a charge against current earnings, which could be material.
Adjustments are reflected in contract revenues in the period when these estimates are revised. To the extent that these adjustments result in an increase, a reduction or an elimination of previously reported contract profit, we are required to recognize a credit or a charge against current earnings, which could be material.
In addition, a security breach could require that we expend significant additional resources related to our information security systems and could result in a disruption of our operations, particularly our online sales operations.
In addition, a security breach could 11 Table of Contents require that we expend significant additional resources related to our information security systems and could result in a disruption of our operations, including our online sales operations.
Wells Fargo and Citi may be subject to regulations that may adversely impact its operation of the private label credit card.
Citi may be subject to regulations that may adversely impact its operation of the private label credit card program.
Any circumstances that adversely impact the Company’s ability to attract, train, develop and retain quality employees throughout the organization could adversely affect the Company’s business and results of operations. Increases in employee wages and the cost of employee benefits could impact the Company’s financial results and cash flows. The Company’s expenses relating to employee wages and health benefits are significant.
Any circumstances that adversely impact the Company’s ability to attract, train, develop and retain quality employees throughout the organization could adversely affect the Company’s business and results of operations. 12 Table of Contents Increases in employee wages and the cost of employee benefits could impact the Company’s financial results and cash flows.
Additionally, although we diversify our sourcing and production, the failure of any supplier to produce and deliver our goods on time, to meet our quality standards and adhere to our product safety requirements or to meet the requirements of our supplier compliance program or applicable laws, could impact our ability to flow merchandise to our stores or directly to consumers in the right quantities at the right time, which could adversely affect our profitability and could result in damage to our reputation and translate into sales losses. 9 Table of Contents Risks Related to our Long-Term Marketing and Servicing Alliance Reductions in the income and cash flow from our long-term marketing and servicing alliance related to the private label credit cards could impact operating results and cash flows.
Additionally, although we diversify our sourcing and production, the failure of any supplier to produce and deliver our goods on time, to meet our quality standards and adhere to our product safety requirements or to meet the requirements of our supplier compliance program or applicable laws, could impact our ability to flow merchandise to our stores or directly to consumers in the right quantities at the right time, which could adversely affect our profitability and could result in damage to our reputation and translate into sales losses.
If the income or cash flow that the Company receives from the Wells Fargo Alliance or from the new agreement with Citi (discussed below) decreases, our operating results and cash flows could be adversely affected.
If the income or cash flow that the Company receives from the Citibank Alliance decreases, our operating results and cash flows could be adversely affected.
Vendors and other suppliers of the Company may experience similar fluctuations, which may subject us to the effects of their price increases. For example, we have experienced significant inflation causing increases in fuel, materials and shipping costs. We may or may not be able to pass such costs along to our customers.
Vendors and other suppliers of the Company may experience similar fluctuations, which may subject us to the effects of their price increases. We may or 7 Table of Contents may not be able to pass such costs along to our customers.
Our failure to adequately address some or all of these risks could have a material adverse effect on our business, results of operations and financial condition. 7 Table of Contents Risks Related to Material Sourcing and Supply Fluctuations in the price of merchandise, raw materials, fuel and labor or their reduced availability could increase our cost of goods and negatively impact our financial results.
Risks Related to Material Sourcing and Supply Fluctuations in the price of merchandise, raw materials, fuel and labor or their reduced availability could increase our cost of goods and negatively impact our financial results.
In January 2024, the Company announced that it entered into a new agreement with Citi to provide a credit card program for Dillard’s customers, replacing the existing Wells Fargo Alliance. The Dillard’s credit card program offered by Citi will include a new co-branded Mastercard as well as a private label credit card.
(“Citi”) to provide a credit card program for Dillard’s customers (the “Citibank Alliance”), replacing the existing Wells Fargo Alliance. The Dillard’s credit card program offered by Citi includes a new co-branded Mastercard, replacing the existing co-branded card, as well as a private label credit card.
Increases in employee wages, including the minimum wage, or unfavorable changes in the cost of healthcare benefits could impact the Company’s financial results and cash flows. Healthcare costs have risen significantly in recent years, and recent legislative and private sector initiatives regarding healthcare reform have resulted and could continue to result in significant changes to the U.S. healthcare system.
Healthcare costs have risen significantly in recent years, and recent legislative and private sector initiatives regarding healthcare reform have resulted and could continue to result in significant changes to the U.S. healthcare system.
Wells Fargo currently owns and manages the private label credit cards under the Wells Fargo Alliance. The Wells Fargo Alliance provides for certain payments to be made by Wells Fargo to the Company, including the Company’s share of earnings under this alliance.
The Citibank Alliance provides for certain payments to be made by Citi to the Company, including the Company’s share of earnings under this alliance.
Our construction segment recognizes contract revenues based on the cost-to-cost method. Under this method, estimated contract revenues are measured based on the ratio of costs incurred to total estimated contract costs. Estimated contract losses are recognized in full when determined.
Under this method, estimated contract revenues are measured based on the ratio of costs incurred to total estimated contract costs. Estimated contract losses are recognized in full when determined. Total contract revenues and cost estimates are reviewed and revised at a minimum on a quarterly basis as the work progresses and as change orders are approved.
The transfer of existing accounts to Citi is expected in the fall of 2024. The term of the agreement is 10 years with automatic extensions for successive two-year terms unless the agreement is terminated by a party in accordance with the terms and conditions of the agreement.
Additionally, Citi will provide customer service functions and support certain Dillard’s marketing and loyalty program activities related to the new program. The term of the agreement is 10 years with automatic extensions for successive two-year terms unless the agreement is terminated by a party in accordance with the terms and conditions of the agreement.
These types of claims, as well as other types of lawsuits to which we are subject from time to time, can distract management’s attention from core business operations and impact operating results, particularly if a lawsuit results in an unfavorable outcome. 12 Table of Contents Risks Related to Construction Operations The cost-to-cost method of accounting that we use to recognize contract revenues for our construction segment may result in material adjustments, which could result in a credit or a charge against our earnings.
These types of claims, as well as other types of lawsuits to which we are subject from time to time, can distract management’s attention from core business operations and impact operating results, particularly if a lawsuit results in an unfavorable outcome.
Our information technology systems are also subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, cyberattacks and ransomware attacks, usage errors by our employees and other items discussed previously in Item 1A, catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and acts of war or terrorism.
Our operations are largely dependent upon the integrity, security and consistent operation of various systems and data centers, including the point-of-sale systems in the stores, our Internet website, data centers that process transactions, communication systems and various software applications used throughout our Company to order merchandise, track inventory flow, process transactions and generate performance and financial reports. 10 Table of Contents Our information technology systems are also subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, cyberattacks and ransomware attacks, usage errors by our employees and other items discussed previously in Item 1A, catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and acts of war or terrorism.
A decline in the amount of margin maintenance allowances would either increase cost of sales, which would negatively impact gross margin and operating income, or cause us to reduce merchandise purchases, which may cause a decline in sales. 5 Table of Contents A decrease in cash flows from our operations and constraints to accessing other financing sources could limit our ability to fund our operations, capital projects, interest and debt repayments, stock repurchases and dividends.
A decline in the amount of margin maintenance allowances would either increase cost of sales, which would negatively impact gross margin and operating income, or cause us to reduce merchandise purchases, which may cause a decline in sales.
For example, many disruptions in the global transportation network have occurred recently, including attacks on shipping vessels in the Red Sea and Suez Canal, drought conditions which have lowered the water levels of the Panama Canal, increased shipping costs resulting from increased demand for shipping capacity and the increased cost of fuel.
For example, many disruptions in the global transportation network have occurred recently, including attacks on shipping vessels in the Red Sea, causing changes to vessel routings, extending transit times, decreasing global vessel capacity and increasing the cost of fuel.
In addition, damage to the reputation of our private label trade names may generate negative customer sentiment.
In addition, damage to the reputation of our private label trade names may generate negative customer sentiment. Our failure to adequately address some or all of these risks could have a material adverse effect on our business, results of operations and financial condition.
Removed
A reduction in the amount of cooperative advertising allowances would likely cause us to consider other methods of advertising as well as the volume and frequency of our product advertising, which could increase/decrease our expenditures and/or revenue.
Added
A decrease in cash flows from our operations and constraints to accessing other financing sources could limit our ability to fund our operations, capital projects, interest and debt repayments, stock repurchases and dividends.
Removed
In addition, the potential for strikes related to labor negotiations at the East Coast and Gulf Coast ports may cause additional supply chain disruptions in 2024.
Added
Additional actions, including new tariffs imposed in the first few months of fiscal 2025 or potential new tariffs on Vietnam or other countries where the Company sources a significant amount of its merchandise, could negatively impact our ability and the ability of our third-party vendors and suppliers to source products from foreign jurisdictions and could lead to an increase in the cost of goods and adversely affect our profitability.
Removed
The California ports of Los Angeles and Long Beach, which together have handled a significant portion of United States merchandise imports, have experienced delays in processing imported merchandise, thereby resulting in untimely deliveries of merchandise and additional freight costs. Moreover, our third-party suppliers in foreign jurisdictions are subject to political and economic uncertainty.
Added
Global port congestion related to weather and geopolitical events may also continue to impact the supply chain, and imports may continue to face delayed transit times, longer wait times at transshipment ports and schedule changes at origin ports. Moreover, our third-party suppliers in foreign jurisdictions are subject to political and economic uncertainty.
Removed
The new co-branded Mastercard will replace the existing co-branded card. Additionally, Citi will provide customer service functions and support certain Dillard’s marketing and loyalty program activities related to the new program. The companies expect to launch the new program in late summer 2024 for new Dillard’s credit applicants.
Added
Risks Related to our Long-Term Marketing and Servicing Alliance Reductions in the income and cash flow from our long-term marketing and servicing alliance related to the private label credit cards could impact operating results and cash flows. In January 2024, the Company announced that it entered into a new agreement with Citibank, N.A.
Removed
Our operations are largely dependent upon the integrity, security and consistent operation of various systems and data centers, including the point-of-sale systems in the stores, our Internet website, data centers that process transactions, communication systems and various software applications used throughout our Company to order merchandise, track inventory flow, process transactions and generate performance and financial reports.
Added
Risks Related to Construction Operations The cost-to-cost method of accounting that we use to recognize contract revenues for our construction segment may result in material adjustments, which could result in a credit or a charge against our earnings. Our construction segment recognizes contract revenues based on the cost-to-cost method.
Removed
Total contract revenues and cost estimates are reviewed and revised at a minimum on a quarterly basis as the work progresses and as change orders are approved. Adjustments are reflected in contract revenues in the period when these estimates are revised.
Added
The Company’s expenses relating to employee wages and health benefits are significant. Increases in employee wages, including the minimum wage, or unfavorable changes in the cost of healthcare benefits could impact the Company’s financial results and cash flows.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Company is unaware of any risks from cybersecurity threats, including those from publicly disclosed incidents with respect to other companies, that have materially affected, or are reasonably likely to materially affect the Company, including strategies, results of operations, or financial condition. Governance .
Biggest changeThe plans provide for notification to the Executive Committee of the Board of Directors and the full Board of Directors, as appropriate, of any actual or suspected significant cybersecurity incidents and require regular updates to these parties during the investigation of such incidents. 13 Table of Contents The Company is currently unaware of any risks from cybersecurity threats, including those from publicly disclosed incidents with respect to other companies, that have materially affected, or are reasonably likely to materially affect the Company, including strategies, results of operations, or financial condition.
We utilize a risk-based approach and judgment to determine the security controls to implement and it is possible we may not implement appropriate controls if we do not recognize or 14 Table of Contents underestimate exposure to a particular cybersecurity risk, or if the control is not feasible or may have an adverse impact on operations.
We utilize a risk-based approach and judgment to determine the security controls to implement and it is possible we may not implement appropriate controls if we do not recognize or underestimate exposure to a particular cybersecurity risk, or if the control is not feasible or may have an adverse impact on operations.
In addition, the Company retains third-party security firms in different capacities to provide some of these controls or monitor cybersecurity threats to our technology systems. For example, third parties are used to conduct independent 13 Table of Contents assessments, such as vulnerability scans and penetration testing, and to confirm PCI DSS compliance.
In addition, the Company retains third-party security firms in different capacities to provide some of these controls or monitor cybersecurity threats to our technology systems. For example, third parties are used to conduct independent assessments, such as vulnerability scans and penetration testing, and to confirm PCI DSS compliance. Additionally, third parties are also used to monitor security alert systems.
The risk assessment is used by management to consider implementing and augmenting cybersecurity controls where feasible and appropriate with the intent of mitigating cybersecurity risk exposure. The Company employs a broad array of cybersecurity tools and controls to manage exposure to cybersecurity risks.
An internal cyber risk assessment is conducted annually. The risk assessment is used by management to consider implementing and augmenting cybersecurity controls where feasible and appropriate with the intent of mitigating cybersecurity risk exposure. The Company employs a broad array of cybersecurity tools and controls to manage exposure to cybersecurity risks.
The CISO, who reports to the Chief Information Officer (CIO), is the management position with primary responsibility for the development, operation, and maintenance of our information security program. The CISO has been with the Company for 40 years, is a certified CISSP, CRISC, and CIPM and oversees a team of experienced individuals.
Governance . The CISO, who reports to the Senior Director of Technology, is the management position with primary responsibility for the development, operation, and maintenance of our information security program. The CISO has been with the Company for 40 years, is a certified CISSP, CRISC, and CIPM and oversees a team of experienced individuals.
Additionally, third parties are also used to monitor security alert systems. The Company engages with a number of service providers in connection with normal business operations. The Company uses a variety of processes to address cybersecurity threats related to third-party service providers, including, where appropriate, pre-acquisition diligence, and imposition of contractual data security and privacy obligations.
The Company engages with a number of service providers in connection with normal business operations. The Company uses a variety of processes to address cybersecurity threats related to third-party service providers, including, where appropriate, pre-acquisition diligence, and imposition of contractual data security and privacy obligations.
Cyber threats can come from unauthorized access, computer hackers, computer viruses, malicious code, ransomware, phishing, organized cyber-attacks and other security problems and system disruptions. The Company faces numerous attempts to access the information stored in its information systems.
Cyber threats are constantly evolving, and those threats and the means for obtaining access to information systems are becoming increasingly sophisticated. Cyber threats can come from unauthorized access, computer hackers, computer viruses, malicious code, ransomware, phishing, organized cyber-attacks and other security problems and system disruptions. The Company faces numerous attempts to access the information stored in its information systems.
In addition to the working committee meetings described above, the CISO and CIO meet regularly with the Company’s President and with other members of senior management to review the current state of the cybersecurity program and emerging threats to the Company. Oversight of the information security program sits with the Company’s President and ultimately with the full Board of Directors.
In addition to the working committee meetings described above, the CISO and Senior Director of Technology meet regularly with the Company’s President and with other members of senior management to review the current state of the cybersecurity program and emerging threats to the Company.
ITEM 1C. CYBERSECURITY. Risk Management and Strategy . The Company has developed an information security program to assess, identify, and manage material risks from cybersecurity threats. The program includes policies and procedures that identify how security measures and controls are developed, implemented, and maintained. An internal cyber risk assessment is conducted annually.
ITEM 1C. CYBERSECURITY. Risk Management and Strategy . The Company has developed an information security program to assess, identify, and manage material risks from cybersecurity threats, which is included in our overall risk management system and processes through a layered governance structure. The program includes policies and procedures that identify how security measures and controls are developed, implemented, and maintained.
The full Board of Directors is briefed as appropriate but not less than annually on cybersecurity risks and the Company’s efforts to mitigate exposure from those risks. Cyber threats are constantly evolving, and those threats and the means for obtaining access to information systems are becoming increasingly sophisticated.
Oversight of the information security program sits with the Company’s President and ultimately with the full Board of Directors. The full Board of Directors is briefed as appropriate but not less than annually on cybersecurity risks and the Company’s efforts to mitigate exposure from those risks.
Removed
The plans provide for notification to the Executive Committee of the Board of Directors and the full Board of Directors, as appropriate, of any actual or suspected significant cybersecurity incidents and require regular updates to these parties during the investigation of such incidents.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table summarizes by state of operation the number of retail stores we operate and the corresponding owned and leased footprint at February 3, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Partially ​ ​ ​ ​ ​ ​ ​ ​ Owned ​ Owned ​ ​ ​ ​ ​ ​ ​ ​ Building ​ and ​ ​ Number ​ Owned ​ Leased ​ on Leased ​ Partially Location ​ of Stores ​ Stores ​ Stores ​ Land ​ Leased Alabama 9 9 — — — Arkansas 8 8 — — — Arizona 14 13 — 1 — California 3 3 — — — Colorado 8 8 — — — Florida 40 37 1 2 — Georgia 12 9 3 — — Iowa 3 3 — — — Idaho 2 2 — — — Illinois 3 3 — — — Indiana 3 3 — — — Kansas 5 3 — 2 — Kentucky 6 5 1 — — Louisiana 14 13 1 — — Missouri 8 6 1 1 — Mississippi 6 4 1 1 — Montana 2 2 — — — North Carolina 13 13 — — — Nebraska 2 2 — — — New Mexico 5 3 2 — — Nevada 5 5 — — — Ohio 12 10 2 — — Oklahoma 7 6 1 — — South Carolina 7 7 — — — Tennessee 10 9 1 — — Texas 55 49 5 — 1 Utah 5 5 — — — Virginia 5 5 — — — Wyoming 1 1 — — — Total 273 246 19 7 1 ​ 15 Table of Contents At February 3, 2024, we operated the following additional facilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owned / Facility ​ Location ​ Square Feet ​ Leased Distribution Centers: Mabelvale, Arkansas 400,000 Owned ​ Gilbert, Arizona 295,000 Owned ​ Valdosta, Georgia 370,000 Owned ​ Olathe, Kansas 500,000 Owned ​ Salisbury, North Carolina 355,000 Owned ​ Ft.
Biggest changeIn general, the Company pays the cost of insurance, maintenance and real estate taxes related to the leases. 14 Table of Contents The following table summarizes by state of operation the number of retail stores we operate and the corresponding owned and leased footprint at February 1, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Partially ​ ​ ​ ​ ​ ​ ​ ​ Owned ​ Owned ​ ​ ​ ​ ​ ​ ​ ​ Building ​ and ​ ​ Number ​ Owned ​ Leased ​ on Leased ​ Partially Location ​ of Stores ​ Stores ​ Stores ​ Land ​ Leased Alabama 9 9 — — — Arkansas 8 8 — — — Arizona 14 13 — 1 — California 3 3 — — — Colorado 8 8 — — — Florida 40 37 1 2 — Georgia 12 9 3 — — Iowa 3 3 — — — Idaho 2 2 — — — Illinois 3 3 — — — Indiana 3 3 — — — Kansas 5 3 — 2 — Kentucky 6 5 1 — — Louisiana 14 13 1 — — Missouri 8 6 1 1 — Mississippi 6 4 1 1 — Montana 2 2 — — — North Carolina 13 13 — — — Nebraska 2 2 — — — New Mexico 5 3 2 — — Nevada 5 5 — — — Ohio 11 10 1 — — Oklahoma 7 6 1 — — South Carolina 7 7 — — — South Dakota ​ 1 ​ 1 ​ — ​ — ​ — Tennessee 9 9 — — — Texas 55 50 4 — 1 Utah 5 5 — — — Virginia 5 5 — — — Wyoming 1 1 — — — Total 272 248 16 7 1 ​ 15 Table of Contents At February 1, 2025, we operated the following additional facilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owned / Facility ​ Location ​ Square Feet ​ Leased Distribution Centers: Mabelvale, Arkansas 400,000 Owned ​ Gilbert, Arizona 295,000 Owned ​ Valdosta, Georgia 370,000 Owned ​ Olathe, Kansas 500,000 Owned ​ Salisbury, North Carolina 355,000 Owned ​ Ft.
ITEM 2. PROPERTIES. All of our stores are owned by us or leased from third parties. At February 3, 2024, we operated 273 stores in 29 states totaling approximately 46.7 million square feet of which we owned approximately 43.0 million square feet.
ITEM 2. PROPERTIES. All of our stores are owned by us or leased from third parties. At February 1, 2025, we operated 272 stores in 30 states totaling approximately 46.3 million square feet of which we owned approximately 43.3 million square feet.
Our third-party store leases typically provide for rental payments based on a percentage of net sales with a guaranteed minimum annual rent. In general, the Company pays the cost of insurance, maintenance and real estate taxes related to the leases.
Our third-party store leases typically provide for rental payments based on a percentage of net sales with a guaranteed minimum annual rent.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAs of March 29, 2024, neither the Company nor any of its subsidiaries is a party to, nor is any of their property the subject of, any material legal proceedings.
Biggest changeAs of March 28, 2025, neither the Company nor any of its subsidiaries is a party to, nor is any of their property the subject of, any material legal proceedings.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeStockman 67 Vice President 2017 None (1) Mr. Bolte served as Vice President of Logistics from 2007 to 2017. In 2017, he was promoted to Vice President of Information Technology and Logistics. In 2021, he was promoted to Senior Vice President of Information Technology and Logistics. ​ 17 Table of Contents PART II
Biggest changeStockman 68 Vice President 2017 None (1) Mrs. Jazic served as Vice President of Online Experience from 2017 to 2024. In 2024, she added the role of Vice President of Information Technology. ​ 17 Table of Contents PART II
There are no other persons chosen to become executive officers. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Held Present ​ Name ​ Age ​ Position & Office ​ Office Since ​ Family Relationship to CEO William Dillard, II 79 Director; Chief Executive Officer 1998 Not applicable Alex Dillard 74 Director; President 1998 Brother of William Dillard, II Mike Dillard 72 Director; Executive Vice President 1984 Brother of William Dillard, II Drue Matheny 77 Director; Executive Vice President 1998 Sister of William Dillard, II William Dillard, III 53 Director; Senior Vice President 2015 Son of William Dillard, II Denise Mahaffy 66 Director; Senior Vice President 2015 Sister of William Dillard, II Chris B.
There are no other persons chosen to become executive officers. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Held Present ​ Name ​ Age ​ Position & Office ​ Office Since ​ Family Relationship to CEO William Dillard, II 80 Director; Chief Executive Officer 1998 Not applicable Alex Dillard 75 Director; President 1998 Brother of William Dillard, II Mike Dillard 73 Director; Executive Vice President 1984 Brother of William Dillard, II Drue Matheny 78 Director; Executive Vice President 1998 Sister of William Dillard, II William Dillard, III 54 Director; Senior Vice President 2015 Son of William Dillard, II Denise Mahaffy 67 Director; Senior Vice President 2015 Sister of William Dillard, II Chris B.
Worley 58 Vice President; General Counsel 2012 None Brant Musgrave 51 Vice President 2014 None Mike Litchford 58 Vice President 2016 None Tom Bolin 61 Vice President 2016 None Annemarie Jazic 40 Vice President 2017 Niece of William Dillard, II Alexandra Lucie 40 Vice President 2017 Niece of William Dillard, II James D.
Worley 59 Vice President; General Counsel 2012 None Brant Musgrave 52 Vice President 2014 None Mike Litchford 59 Vice President 2016 None Tom Bolin 62 Vice President 2016 None Annemarie Jazic (1) 41 Vice President 2024 Niece of William Dillard, II Alexandra Lucie 41 Vice President 2017 Niece of William Dillard, II James D.
Johnson 52 Senior Vice President; Co-Principal Financial Officer 2015 None Phillip R. Watts 61 Senior Vice President; Co-Principal Financial Officer and Principal Accounting Officer 2015 None Tony Bolte (1) 65 Senior Vice President 2021 None Dean L.
Johnson 53 Senior Vice President; Co-Principal Financial Officer 2015 None Phillip R. Watts 62 Senior Vice President; Co-Principal Financial Officer and Principal Accounting Officer 2015 None Dean L.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeRepurchase of Common Stock ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (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 October 29, 2023 through November 25, 2023 ​ 52,042 ​ $ 310.55 ​ 52,042 ​ $ 393,996,507 November 26, 2023 through December 30, 2023 ​ — ​ ​ — ​ — ​ ​ 393,996,507 December 31, 2023 through February 3, 2024 ​ — ​ ​ — ​ — ​ ​ 393,996,507 Total ​ 52,042 ​ $ 310.55 ​ 52,042 ​ $ 393,996,507 ​ In May 2023, the Company’s Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $500 million of its Class A Common Stock under an open-ended plan (“May 2023 Stock Plan”).
Biggest changeRepurchase of Common Stock ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (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 November 3, 2024 through November 30, 2024 ​ 35,900 ​ $ 391.04 ​ 35,900 ​ $ 272,967,521 December 1, 2024 through January 4, 2025 ​ — ​ ​ — ​ — ​ ​ 272,967,521 January 5, 2025 through February 1, 2025 ​ — ​ ​ — ​ — ​ ​ 272,967,521 Total ​ 35,900 ​ $ 391.04 ​ 35,900 ​ $ 272,967,521 ​ In May 2023, the Company’s Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $500 million of its Class A Common Stock under an open-ended plan (“May 2023 Stock Plan”).
While the Company currently expects to continue paying quarterly cash dividends during fiscal 2024, all prospective dividends are subject to and conditional upon the review and approval of and declaration by the Board of Directors.
While the Company currently expects to continue paying quarterly cash dividends during fiscal 2025, all prospective dividends are subject to and conditional upon the review and approval of and declaration by the Board of Directors.
All repurchases of the Company’s Class A Common Stock in fiscal 2023 were made at the market price at the trade date, and all amounts paid to reacquire these shares were allocated to treasury stock. As of February 3, 2024, $394.0 million of authorization remained under the May 2023 Stock Plan.
All repurchases of the Company’s Class A Common Stock in fiscal 2024 were made at the market price at the trade date, and all amounts paid to reacquire these shares were allocated to treasury stock. As of February 1, 2025, $273.0 million of authorization remained under the May 2023 Stock Plan.
The cumulative total return assumes $100 invested in the Company’s Class A Common Stock and each of the indices at market close on February 1, 2019 (the last trading day prior to the start of fiscal 2019) and assumes reinvestment of dividends.
The cumulative total return assumes $100 invested in the Company’s Class A Common Stock and each of the indices at market close on January 31, 2020 (the last trading day prior to the start of fiscal 2020) and assumes reinvestment of dividends.
Stockholders As of March 2, 2024, there were 2,157 holders of record of the Company’s Class A Common Stock and 4 holders of record of the Company’s Class B Common Stock.
Stockholders As of March 1, 2025, there were 2,199 holders of record of the Company’s Class A Common Stock and 4 holders of record of the Company’s Class B Common Stock.
Apparel Retailers Index as of the last day of each of the Company’s last five fiscal years. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2019 2020 2021 2022 2023 Dillard's, Inc. ​ $ 93.24 ​ $ 137.03 ​ $ 410.71 ​ $ 652.70 ​ $ 709.75 S&P 500 ​ 121.56 ​ 142.53 ​ 172.46 ​ 161.03 ​ 199.42 DJ US Apparel Retailers ​ 112.99 ​ 120.80 ​ 132.11 ​ 145.96 ​ 167.94 ​ ​ 19 Table of Contents
Apparel Retailers Index as of the last day of each of the Company’s last five fiscal years. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2021 2022 2023 2024 Dillard's, Inc. ​ $ 146.97 ​ $ 440.50 ​ $ 700.04 ​ $ 761.22 ​ $ 965.99 S&P 500 ​ 117.25 ​ 141.87 ​ 132.46 ​ 164.04 ​ 202.57 DJ US Apparel Retailers ​ 106.91 ​ 116.92 ​ 129.17 ​ 148.62 ​ 184.47 ​ ​ 19 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe Company expects pension expense to be approximately $31.0 million in fiscal 2024. ​ 26 Table of Contents RESULTS OF OPERATIONS The following table sets forth the results of operations and percentage of net sales, for the periods indicated (percentages may not foot due to rounding): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended ​ ​ February 3, 2024 ​ January 28, 2023 ​ January 29, 2022 ​ ​ Amount % of Net Sales ​ Amount % of Net Sales ​ Amount % of Net Sales ​ Net sales $ 6,752,053 ​ 100.0 % $ 6,871,081 ​ 100.0 % $ 6,492,993 ​ 100.0 % Service charges and other income ​ 122,367 1.8 ​ 125,134 1.8 ​ 131,274 2.0 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6,874,420 101.8 ​ 6,996,215 101.8 ​ 6,624,267 102.0 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales ​ 4,031,108 59.7 ​ 3,983,598 58.0 ​ 3,747,665 57.7 Selling, general and administrative expenses ​ 1,717,415 25.4 ​ 1,674,317 24.4 ​ 1,536,554 23.7 Depreciation and amortization ​ 179,573 2.7 ​ 188,440 2.7 ​ 199,321 3.1 Rentals ​ 21,569 0.3 ​ 23,169 0.3 ​ 22,594 0.3 Interest and debt (income) expense, net ​ (4,600) (0.1) ​ 30,527 0.4 ​ 43,092 0.7 Other expense ​ 18,791 0.3 ​ 7,744 0.1 ​ 11,366 0.2 Gain on disposal of assets ​ (6,053) (0.1) ​ (21,047) (0.3) ​ (24,688) (0.4) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ 916,617 ​ 13.6 ​ ​ 1,109,467 ​ 16.1 ​ ​ 1,088,363 ​ 16.8 ​ Income taxes ​ 177,770 2.6 ​ 217,830 3.2 ​ 225,890 3.5 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ 738,847 ​ 10.9 % $ 891,637 ​ 13.0 % $ 862,473 ​ 13.3 % ​ ​ Sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands of dollars) Fiscal 2023 Fiscal 2022 Fiscal 2021 Net sales: ​ ​ ​ Retail operations segment ​ $ 6,479,580 ​ $ 6,701,972 ​ $ 6,374,753 Construction segment ​ 272,473 ​ 169,109 ​ 118,240 Total net sales ​ $ 6,752,053 ​ $ 6,871,081 ​ $ 6,492,993 ​ The percent change by segment and product category in the Company’s sales for the past two years is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Percent Change ​ Fiscal 2023 - 2022 ​ Fiscal 2023 - 2022* Fiscal 2022 - 2021 Retail operations segment ​ ​ ​ Cosmetics 4.3 % 3.0 % 7.5 % Ladies’ apparel (4.1) ​ (5.6) 5.7 ​ Ladies’ accessories and lingerie (6.4) ​ (7.7) (0.8) ​ Juniors’ and children’s apparel (7.3) ​ (8.7) 3.0 ​ Men’s apparel and accessories (4.4) ​ (5.8) 9.7 ​ Shoes (3.4) ​ (4.6) 5.0 ​ Home and furniture (1.0) ​ (2.4) (0.8) ​ Construction segment 61.1 ​ 61.1 43.0 ​ * Based upon the 52 weeks ended January 27, 2024 and 52 weeks ended January 28, 2023. ​ 27 Table of Contents 2023 Compared to 2022 Net sales from the retail operations segment decreased $222.4 million during the 53-week period ended February 3, 2024 compared to the 52-week period ended January 28, 2023, decreasing 3% in total store sales.
Biggest changeThe Company expects pension expense to be approximately $25.9 million in fiscal 2025. ​ 26 Table of Contents RESULTS OF OPERATIONS The following table sets forth the results of operations and percentage of net sales, for the periods indicated (percentages may not foot due to rounding): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended ​ ​ ​ February 1, 2025 ​ February 3, 2024 ​ January 28, 2023 ​ ​ ​ Amount % of Net Sales ​ Amount % of Net Sales ​ Amount % of Net Sales ​ Net sales $ 6,482,636 ​ 100.0 % $ 6,752,053 ​ 100.0 % $ 6,871,081 ​ 100.0 % Service charges and other income ​ 107,595 1.7 ​ 122,367 1.8 ​ 125,134 1.8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6,590,231 101.7 ​ 6,874,420 101.8 ​ 6,996,215 101.8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales ​ 3,919,549 60.5 ​ 4,031,108 59.7 ​ 3,983,598 58.0 Selling, general and administrative expenses ​ 1,731,234 26.7 ​ 1,717,415 25.4 ​ 1,674,317 24.4 Depreciation and amortization ​ 177,867 2.7 ​ 179,573 2.7 ​ 188,440 2.7 Rentals ​ 21,419 0.3 ​ 21,569 0.3 ​ 23,169 0.3 Interest and debt (income) expense, net ​ (13,695) (0.2) ​ (4,600) (0.1) ​ 30,527 0.4 Other expense ​ 24,631 0.4 ​ 18,791 0.3 ​ 7,744 0.1 Gain on disposal of assets ​ (475) — ​ (6,053) (0.1) ​ (21,047) (0.3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ ​ 729,701 ​ 11.3 ​ ​ 916,617 ​ 13.6 ​ ​ 1,109,467 ​ 16.1 ​ Income taxes ​ 136,225 2.1 ​ 177,770 2.6 ​ 217,830 3.2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ 593,476 ​ 9.2 % $ 738,847 ​ 10.9 % $ 891,637 ​ 13.0 % ​ ​ Sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands of dollars) Fiscal 2024 Fiscal 2023 Fiscal 2022 Net sales: ​ ​ ​ Retail operations segment ​ $ 6,218,525 ​ $ 6,479,580 ​ $ 6,701,972 Construction segment ​ 264,111 ​ 272,473 ​ 169,109 Total net sales ​ $ 6,482,636 ​ $ 6,752,053 ​ $ 6,871,081 ​ The percent change by segment and product category in the Company’s sales for the past two years is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percent Change ​ Fiscal 2024 - 2023 ​ Fiscal 2024 - 2023* Fiscal 2023 - 2022 ​ Fiscal 2023 - 2022** Retail operations segment ​ ​ ​ ​ ​ Cosmetics 1.4 % 3.0 % 4.3 % 3.0 % Ladies’ apparel (4.7) ​ (2.9) (4.1) ​ (5.6) ​ Ladies’ accessories and lingerie (2.7) ​ (1.3) (6.4) ​ (7.7) ​ Juniors’ and children’s apparel (5.7) ​ (3.9) (7.3) ​ (8.7) ​ Men’s apparel and accessories (7.1) ​ (5.6) (4.4) ​ (5.8) ​ Shoes (6.1) ​ (4.2) (3.4) ​ (4.6) ​ Home and furniture (0.1) ​ 1.2 (1.0) ​ (2.4) ​ Construction segment (3.1) ​ N/A 61.1 ​ N/A ​ * Based upon the 52 weeks ended February 1, 2025 and 52 weeks ended February 3, 2024. ** Based upon the 52 weeks ended January 27, 2024 and 52 weeks ended January 28, 2023. ​ 27 Table of Contents 2024 Compared to 2023 Net sales from the retail operations segment decreased $261.1 million during the 52-week period ended February 1, 2025 compared to the 53-week period ended February 3, 2024, decreasing 4% in total store sales.
In May 2021, the Company’s Board of Directors authorized the Company to repurchase up to $500 million of the Company’s Class A Common Stock under an open-ended plan (“May 2021 Stock Plan”).
Stock Repurchase . In May 2021, the Company’s Board of Directors authorized the Company to repurchase up to $500 million of the Company’s Class A Common Stock under an open-ended plan (“May 2021 Stock Plan”).
Our ability to attract and retain compelling vendors as well as in-house design talent, the adequacy and stable availability of materials and production facilities from which we source our merchandise and the speed at which we can respond to customer trends and preferences all have a significant impact on our merchandise mix and, thus, our ability to sell merchandise at profitable prices. ● Store growth—Our ability to open new stores is dependent upon a number of factors, such as the identification of suitable markets and locations and the availability of shopping developments, especially in a weak economic environment.
Our ability to attract and retain compelling vendors as well as in-house design 21 Table of Contents talent, the adequacy and stable availability of materials and production facilities from which we source our merchandise and the speed at which we can respond to customer trends and preferences all have a significant impact on our merchandise mix and, thus, our ability to sell merchandise at profitable prices. ● Store growth—Our ability to open new stores is dependent upon a number of factors, such as the identification of suitable markets and locations and the availability of shopping developments, especially in a weak economic environment.
The return asset and the allowance for sales returns are recorded in the consolidated balance sheets in other current assets and trade accounts payable and accrued expenses, respectively. Adjustments to earnings resulting from revisions to estimates on our sales return provision were not material for fiscal 2023, 2022 and 2021.
The return asset and the allowance for sales returns are recorded in the consolidated balance sheets in other current assets and trade accounts payable and accrued expenses, respectively. Adjustments to earnings resulting from revisions to estimates on our sales return provision were not material for fiscal 2024, 2023 and 2022.
The Company has the right to defer the payment of interest on the subordinated debentures at any time for a period not to exceed 20 consecutive quarters; however, the Company has no present intention of exercising this right to defer interest payments. During fiscal 2024, the Company expects to accrue interest expense of $15.0 million on its subordinated debentures.
The Company has the right to defer the payment of interest on the subordinated debentures at any time for a period not to exceed 20 consecutive quarters; however, the Company has no present intention of exercising this right to defer interest payments. During fiscal 2025, the Company expects to accrue interest expense of $15.0 million on its subordinated debentures.
If we have to reduce our retail selling prices, the gross margin on our consolidated statement of operations will correspondingly decrease, thus reducing our net income and cash flow. 21 Table of Contents ● Success of brand—The success of our exclusive brand merchandise as well as merchandise we source from national vendors is dependent upon customer fashion preferences and how well we can predict and anticipate trends. ● Sourcing—Our store merchandise selection is dependent upon our ability to acquire appealing products from a number of sources.
If we have to reduce our retail selling prices, the gross margin on our consolidated statement of operations will correspondingly decrease, thus reducing our net income and cash flow. ● Success of brand—The success of our exclusive brand merchandise as well as merchandise we source from national vendors is dependent upon customer fashion preferences and how well we can predict and anticipate trends. ● Sourcing—Our store merchandise selection is dependent upon our ability to acquire appealing products from a number of sources.
The application of the LIFO retail inventory method did not result in the recognition of any LIFO charges or credits affecting cost of sales for fiscal 2023, 2022 or 2021. A 1% change in the dollar amount of markdowns would have impacted net income by approximately $8 million for fiscal 2023.
The application of the LIFO retail inventory method did not result in the recognition of any LIFO charges or credits affecting cost of sales for fiscal 2024, 2023 or 2022. A 1% change in the dollar amount of markdowns would have impacted net income by approximately $8 million for fiscal 2024.
The extent to which our business will be affected by these factors depends on our customer’s continuing ability and willingness to accept price increases. Accordingly, the related financial impact to fiscal 2024 from these factors cannot be reasonably estimated at this time.
The extent to which our business will be affected by these factors depends on our customer’s continuing ability and willingness to accept price increases. Accordingly, the related financial impact to fiscal 2025 from these factors cannot be reasonably estimated at this time.
Because of the seasonality of our business, results from any quarter are not necessarily indicative of the results that may be achieved for a full fiscal year. The Company was affected by inflation during fiscal 2023 and 2022.
Because of the seasonality of our business, results from any quarter are not necessarily indicative of the results that may be achieved for a full fiscal year. The Company was affected by inflation during fiscal 2024 and 2023.
Approximately 96% of the Company’s inventories are valued using the LIFO retail inventory method. Under the retail inventory method, the valuation of inventories at cost and the resulting gross margins are calculated by applying a cost to retail ratio to the retail value of inventories.
Approximately 95% of the Company’s inventories are valued using the LIFO retail inventory method. Under the retail inventory method, the valuation of inventories at cost and the resulting gross margins are calculated by applying a cost to retail ratio to the retail value of inventories.
The Company evaluates its estimates and judgments on an ongoing basis and predicates those estimates and judgments on historical experience and on various other factors that are believed to be reasonable under 23 Table of Contents the circumstances. Since future events and their effects cannot be determined with absolute certainty, actual results could differ from those estimates.
The Company evaluates its estimates and judgments on an ongoing basis and predicates those estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. Since future events and their effects cannot be determined with absolute certainty, actual results could differ from those estimates.
The Company receives concessions from vendors through a variety of programs and arrangements, including cooperative advertising, payroll reimbursements and margin maintenance programs. Cooperative advertising allowances are reported as a reduction of advertising expense in the period in which the advertising occurred.
The Company receives concessions from vendors through a variety of programs and arrangements, including cooperative advertising, payroll reimbursements and margin maintenance programs. 24 Table of Contents Cooperative advertising allowances are reported as a reduction of advertising expense in the period in which the advertising occurred.
Exclusive Brand Merchandise Sales penetration of exclusive brand merchandise for fiscal 2023, 2022 and 2021 was 23.5%, 23.8% and 22.7% of total net sales, respectively.
Exclusive Brand Merchandise Sales penetration of exclusive brand merchandise for fiscal 2024, 2023 and 2022 was 22.7%, 23.5% and 23.8% of total net sales, respectively.
Federal government shutdown, economic recession and changes in traffic at malls and shopping centers; economic and weather conditions for regions in which the Company’s stores are located and the effect of these factors on the buying patterns of the Company’s customers, including the effect of changes in prices and availability of oil and natural gas; the availability of and interest rates on consumer credit; the impact of competitive pressures in the department store industry and other retail channels including 36 Table of Contents specialty, off-price, discount and Internet retailers; changes in the Company’s ability to meet labor needs amid nationwide labor shortages and an intense competition for talent; changes in consumer spending patterns, debt levels and their ability to meet credit obligations; high levels of unemployment; changes in tax legislation (including the Inflation Reduction Act of 2022); changes in legislation and government regulations, affecting such matters as the cost of employee benefits or credit card income, such as the Consumer Financial Protection Bureau’s recent amendment to Regulation Z to limit the dollar amounts credit card companies can charge for late fees; adequate and stable availability and pricing of materials, production facilities and labor from which the Company sources its merchandise; changes in operating expenses, including employee wages, commission structures and related benefits; system failures or data security breaches; possible future acquisitions of store properties from other department store operators; the continued availability of financing in amounts and at the terms necessary to support the Company’s future business; fluctuations in SOFR and other base borrowing rates; potential disruption from terrorist activity and the effect on ongoing consumer confidence; other epidemic, pandemic or public health issues and their effects on public health, our supply chain, the health and well-being of our employees and customers and the retail industry in general; potential disruption of international trade and supply chain efficiencies; global conflicts (including the ongoing conflicts in the Middle East and Ukraine) and the possible impact on consumer spending patterns and other economic and demographic changes of similar or dissimilar nature, and other risks and uncertainties, including those detailed from time to time in our periodic reports filed with the SEC, particularly those set forth under the caption “Item 1A, Risk Factors” in this Annual Report.
Representative examples of those factors include (without limitation) general retail industry conditions and macro-economic conditions including inflation, economic recession and changes in traffic at malls and shopping centers; economic and weather conditions for regions in which the Company’s stores are located and the effect of these factors on the buying patterns of the Company’s customers, including the effect of changes in prices and availability of oil and natural gas; the availability of and interest rates on consumer credit; the impact of competitive pressures in the department store industry and other retail channels including specialty, off-price, discount and Internet retailers; changes in the Company’s ability to meet labor needs amid nationwide labor shortages and an intense competition for talent; changes in consumer spending patterns, debt levels and their ability to meet credit obligations; high levels of unemployment; changes in tax legislation; changes in legislation and governmental regulations, affecting trade restrictions, including tariffs, and such matters as the cost of employee benefits or credit card income, such as the Consumer Financial Protection Bureau’s amendment to Regulation Z to limit the dollar amounts credit card companies can charge for late fees; adequate and stable availability and pricing of materials, production facilities and labor from which the Company sources its merchandise; changes in operating expenses, including employee wages, commission structures and related benefits; system failures or data security breaches; possible future acquisitions of store properties from other department store operators; the continued availability of financing in amounts and at the terms necessary to 36 Table of Contents support the Company’s future business; fluctuations in SOFR and other base borrowing rates; potential disruption from terrorist activity and the effect on ongoing consumer confidence; epidemic, pandemic or public health issues and their effects on public health, our supply chain, the health and well-being of our employees and customers and the retail industry in general; potential disruption of international trade and supply chain efficiencies; global conflicts (including the ongoing conflicts in the Middle East and Ukraine) and the possible impact on consumer spending patterns and other economic and demographic changes of similar or dissimilar nature, and other risks and uncertainties, including those detailed from time to time in our periodic reports filed with the Securities and Exchange Commission, particularly those set forth under the caption “Item 1A, Risk Factors” in this Annual Report on Form 10-K.
During periods of deflation, inventory values on the first-in, first-out (“FIFO”) retail inventory method may be lower than the LIFO retail inventory method. Additionally, inventory values at LIFO cost may be in excess of net realizable value.
During periods of deflation, inventory values on the first-in, first-out (“FIFO”) retail inventory method may be lower than the LIFO retail inventory method. Additionally, inventory values at LIFO cost may be in excess of net 23 Table of Contents realizable value.
In May 2023, the Company’s Board of Directors authorized the Company to repurchase up to $500 million of the Company’s Class A Common Stock under an open-ended plan (“May 2023 Stock Plan”).
In May 2023, the Company’s Board of Directors authorized the Company to repurchase up to $500 million of the Company’s Class A 33 Table of Contents Common Stock under an open-ended plan (“May 2023 Stock Plan”).
Due to the seasonality of the Company’s business, we have historically realized a significant portion of the cash flows from operating activities during the second half of the fiscal year. Retail operations sales are the key operating cash component, providing 94.3%, 95.8% and 96.2% of total revenues in fiscal 2023, 2022 and 2021, respectively.
Due to the seasonality of the Company’s business, we have historically realized a significant portion of the cash flows from operating activities during the second half of the fiscal year. Retail operations sales are the key operating cash component, providing 94.4%, 94.3% and 95.8% of total revenues in fiscal 2024, 2023 and 2022, respectively.
Dividends . During fiscal 2023 and 2022, in addition to our typical quarterly dividends, the Board of Directors declared a special dividend of $20.00 per share and $15.00 per share, respectively, that was paid on the Class A Common Stock and Class B Common Stock of the Company.
Dividends . During fiscal 2024 and 2023, in addition to our typical quarterly dividends, the Board of Directors declared a special dividend of $25.00 per share and $20.00 per share, respectively, that was paid on the Class A Common Stock and Class B Common Stock of the Company.
Non-comparable store sales includes: sales in the current fiscal year from stores opened during the previous fiscal year before they are considered comparable stores; sales from new stores opened during the current fiscal year; sales in the previous fiscal year for stores closed during the current or previous 22 Table of Contents fiscal year that are no longer considered comparable stores; sales in clearance centers; and changes in the allowance for sales returns.
Non-comparable store sales includes: sales in the current fiscal year from stores opened during the previous fiscal year before they are considered comparable stores; sales from new stores opened during the current fiscal year; sales in the previous fiscal year for stores closed during the current or previous fiscal year that are no longer considered comparable stores; sales in clearance centers; and changes in the allowance for sales returns.
Effective July 1, 2023, the Company amended the credit agreement (the "2023 amendment") to reflect the changes necessary for the phaseout of LIBOR. Pursuant to the 2023 amendment, the Company pays a variable rate of interest on borrowings under the credit agreement and a commitment fee to the participating banks.
Effective June 16, 2023, the Company amended the credit agreement (the "2023 amendment") to reflect the changes necessary for the phaseout of LIBOR. Pursuant to the 2023 amendment, the Company pays a variable rate of interest on borrowings under the credit agreement and a commitment fee to the participating banks.
During fiscal 2023 and 2022, the Company received proceeds of $301.9 million and $100.0 million, respectively, related to maturities of its short-term investments. Financing Activities Our primary source of cash inflows from financing activities is generally borrowings from our $800 million senior secured revolving credit facility.
During fiscal 2024 and 2023, the Company received proceeds of $530.9 million and $301.9 million, respectively, related to maturities of its short-term investments. Financing Activities Our primary source of cash inflows from financing activities is generally borrowings from our $800 million senior secured revolving credit facility.
A discussion regarding results of operations and analysis of financial condition for the year ended January 28, 2023 as compared to the year ended January 29, 2022 is included in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended January 28, 2023.
A discussion regarding results of operations and analysis of financial condition for the year ended February 3, 2024 as compared to the year ended January 28, 2023 is included in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended February 3, 2024.
Pursuant to the Wells Fargo Alliance, we receive on-going cash compensation from Wells Fargo based upon the portfolio’s earnings. The compensation received from the portfolio is determined monthly and has no recourse provisions.
Pursuant to the Citibank Alliance, we receive on-going cash compensation from Citi based upon the portfolio’s earnings. The compensation received from the portfolio is determined monthly and has no recourse provisions.
The commitment fee for unused borrowings is 0.30% per annum if average borrowings are less than 35% of the total commitment and 0.25% if average borrowings are greater than or equal to 35% of the total commitment.
The commitment fee for unused borrowings was 0.30% per annum if average borrowings were less than 35% of the total commitment and 0.25% per annum if average borrowings were greater than or equal to 35% of the total commitment.
At February 3, 2024 and January 28, 2023, merchandise inventories valued at LIFO, including adjustments as necessary to record inventory at the lower of cost or market, approximated the cost of such inventories using the FIFO retail inventory method.
At February 1, 2025 and February 3, 2024, merchandise inventories valued at LIFO, including adjustments as necessary to record inventory at the lower of cost or market, approximated the cost of such inventories using the FIFO retail inventory method.
Gain on Disposal of Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands of dollars) Fiscal 2023 Fiscal 2022 Fiscal 2021 Gain on disposal of assets: ​ ​ ​ Retail operations segment ​ $ (6,030) ​ $ (21,046) ​ $ (24,682) Construction segment ​ (23) ​ (1) ​ (6) Total gain on disposal of assets ​ $ (6,053) ​ $ (21,047) ​ $ (24,688) ​ Fiscal 2023 During fiscal 2023, the Company received proceeds of $6.3 million primarily from the sale of two store properties, resulting in a gain of $6.1 million that was recorded in gain on disposal of assets.
Gain on Disposal of Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands of dollars) Fiscal 2024 Fiscal 2023 Fiscal 2022 Gain on disposal of assets: ​ ​ ​ Retail operations segment ​ $ (442) ​ $ (6,030) ​ $ (21,046) Construction segment ​ (33) ​ (23) ​ (1) Total gain on disposal of assets ​ $ (475) ​ $ (6,053) ​ $ (21,047) ​ Fiscal 2023 During fiscal 2023, the Company received proceeds of $6.3 million primarily from the sale of two store properties, resulting in a gain of $6.1 million that was recorded in gain on disposal of assets.
During fiscal 2023, the Company repurchased 0.9 million shares of Class A Common Stock for $281.4 million at an average price of $306.66 per share.
During fiscal 2024, the Company repurchased 0.3 million shares of Class A Common Stock for $121.0 million at an average price of $367.33 per share. During fiscal 2023, the Company repurchased 0.9 million shares of Class A Common Stock for $281.4 million at an average price of $306.66 per share.
We record accounts receivable based on amounts billed to customers. We also record costs and estimated earnings in excess of billings on uncompleted contracts (contract assets) and billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities) in other current assets and trade accounts payable and accrued expenses, respectively, on the consolidated balance sheets. Vendor allowances .
We also record costs and estimated earnings in excess of billings on uncompleted contracts (contract assets) and billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities) in other current assets and trade accounts payable and accrued expenses, respectively, on the consolidated balance sheets. Vendor allowances .
As of February 3, 2024 and January 28, 2023, insurance accruals of $41.0 million and $42.5 million, respectively, were recorded in trade accounts payable and accrued expenses and other liabilities. A 10% change in our self-insurance reserve would have affected net income by approximately $3 million for fiscal 2023. Long-lived assets .
As of February 1, 2025 and February 3, 2024, insurance accruals of $40.1 million and $41.0 million, respectively, were recorded in trade accounts payable and accrued expenses and other liabilities. A 10% change in our self-insurance reserve would have affected net income by approximately $3 million for fiscal 2024. Long-lived assets .
Financing cash outflows generally include the repayment of borrowings under the revolving credit facility, the repayment of long-term debt, finance lease obligations, the payment of dividends and the purchase of treasury stock. Cash used in financing activities decreased to $620.0 million in fiscal 2023 from $769.0 million in fiscal 2022, primarily due to decreases in treasury stock purchases during 2023.
Financing cash outflows generally include the repayment of borrowings under the revolving credit facility, the repayment of long-term debt, finance lease obligations, the payment of dividends and the purchase of treasury stock. Cash used in financing activities improved to $534.8 million in fiscal 2024 from $620.0 million in fiscal 2023 due to decreases in treasury stock purchases during 2024.
The Company classifies accrued interest expense and penalties relating to income tax in the consolidated financial statements as income tax expense. The total amounts of interest and penalties were not material. The fiscal tax years that remain subject to examination for the federal tax jurisdiction are 2015, 2016 and 2019 and forward.
The Company classifies accrued interest expense and penalties relating to income tax in the consolidated financial statements as income tax expense. The total amounts of interest and penalties were not material. The fiscal tax years that remain subject to examination for the federal tax jurisdiction and major state tax jurisdictions are 2021 and forward.
We believe that these assumptions have been appropriate and that, based on these assumptions, the pension liability of $316.5 million is appropriately stated as of February 3, 2024; however, actual results may differ materially from those estimated and could have a material impact on our consolidated financial statements.
We believe that these assumptions have been appropriate and that, based on these assumptions, the pension liability of $298.9 million is appropriately stated as of February 1, 2025; however, actual results may differ materially from those estimated and could have a material impact on our consolidated financial statements.
The asset and liability for sales returns are based on historical evidence of our return rate. We recorded an allowance for sales returns of $21.9 million and $23.1 million and return assets of $12.8 million and $13.3 million as of February 3, 2024 and January 28, 2023, respectively.
The asset and liability for sales returns are based on historical evidence of our return rate. We recorded an allowance for sales returns of $21.5 million and $21.9 million and return assets of $13.0 million and $12.8 million as of February 1, 2025 and February 3, 2024, respectively.
Depending upon our actual and anticipated sources and uses of liquidity, the Company will from time to time consider other possible financing transactions, the proceeds of which could be used to fund working capital or for other corporate purposes. LIBOR On March 5, 2021, the U.K.
Depending upon our actual and anticipated sources and uses of liquidity, the Company will from time to time consider other possible financing transactions, the proceeds of which could be used to fund working capital or for other corporate purposes.
Customers who earn reward points under the private label credit card program may earn and redeem rewards through in-store or online purchases. Service charges and other income . Service charges and other income includes income generated through the marketing and servicing alliance with Wells Fargo Bank, N.A. (“Wells Fargo Alliance”).
Customers who earn reward points under the private label credit card program may earn and redeem rewards through in-store or online purchases. Service charges and other income . Service charges and other income includes income generated through the Company’s private label credit card portfolio alliances. These alliances include the former marketing and servicing alliance with Wells Fargo Bank, N.A.
The Company’s share of income under the Wells Fargo Alliance involving the Dillard’s branded private label credit cards is included as a component of service charges and other income. The Company recognized income of $67.2 million, $67.8 million and $74.8 million from the alliance in fiscal 2023, 2022 and 2021, respectively.
The Company’s share of income under the Citibank Alliance and the former Wells Fargo Alliance involving the Dillard’s branded private label credit cards is included as a component of service charges and other income. The Company recognized income of $54.1 million, $67.2 million and $67.8 million from the alliances in fiscal 2024, 2023 and 2022, respectively.
Other income includes rental income, shipping and handling fees and gift card breakage. Cost of sales . Cost of sales includes the cost of merchandise sold (net of purchase discounts, non-specific margin maintenance allowances and merchandise margin maintenance allowances), bankcard fees, freight to the distribution centers, employee and promotional discounts, shipping to customers and direct payroll for salon personnel.
Cost of sales includes the cost of merchandise sold (net of purchase discounts, non-specific margin maintenance allowances and merchandise margin maintenance allowances), bankcard fees, freight to the distribution centers, employee and promotional discounts, shipping to customers and direct payroll for salon personnel.
Changes in the Company’s assumptions and judgments can materially affect amounts recognized in the consolidated balance sheets and statements of operations. The total amount of unrecognized tax benefits as of February 3, 2024 was $8.1 million, of which, $6.0 million would, if recognized, affect the Company’s effective tax rate.
Changes in the Company’s assumptions and judgments can materially affect amounts recognized in the consolidated balance sheets and statements of operations. 25 Table of Contents The total amount of unrecognized tax benefits as of February 1, 2025 was $8.0 million, of which, $5.8 million would, if recognized, affect the Company’s effective tax rate.
Other Expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands of dollars) Fiscal 2023 Fiscal 2022 Fiscal 2021 Other expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ Retail operations segment ​ $ 18,791 ​ $ 7,744 ​ $ 11,366 Construction segment ​ — ​ — ​ — Total other expense ​ $ 18,791 ​ $ 7,744 ​ $ 11,366 ​ 2023 Compared to 2022 Other expense increased $11.0 million in fiscal 2023 compared to fiscal 2022 primarily due to an increase in the interest cost and the amortization of the net actuarial loss related to the Company’s pension plan.
Other Expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands of dollars) Fiscal 2024 Fiscal 2023 Fiscal 2022 Other expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ Retail operations segment ​ $ 24,631 ​ $ 18,791 ​ $ 7,744 Construction segment ​ — ​ — ​ — Total other expense ​ $ 24,631 ​ $ 18,791 ​ $ 7,744 ​ 2024 Compared to 2023 Other expense increased $5.8 million in fiscal 2024 compared to fiscal 2023 primarily due to an increase in the interest cost and the amortization of the net actuarial loss related to the Company’s pension plan.
Net cash flows from operations decreased $64.8 million during fiscal 2023 compared to fiscal 2022 primarily due to reduced sales and lower margins. Operating cash inflows also include the Company’s income and reimbursements from the Wells Fargo Alliance and cash distributions from joint ventures (excluding returns of investments), if any.
Net cash flows from operations decreased $169.5 million during fiscal 2024 compared to fiscal 2023 primarily due to reduced sales and lower margins. Operating cash inflows also include the Company’s income from the Citibank Alliance, former Wells Fargo Alliance and cash distributions from joint ventures (excluding returns of investments), if any.
The following are or may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995: (a) statements including words such as “may,” “will,” “could,” “should,” “believe,” “expect,” “future,” “potential,” “anticipate,” “intend,” “plan,” “estimate,” “continue,” or the negative or other variations thereof; (b) statements regarding matters that are not historical facts; and (c) statements about the Company’s future occurrences, plans and objectives, including those statements included under the headings “2024 Guidance” and “Fiscal 2024 Outlook” included in this Management’s Discussion and Analysis and other statements regarding management’s expectations and forecasts for the remainder of fiscal 2024 and beyond, statements regarding the launch of our new credit program and transfer of existing accounts to Citi, statements concerning the opening of new stores or the closing of existing stores, statements regarding our competitive position, statements concerning capital expenditures and sources of liquidity, statements concerning share repurchases, statements concerning pension contributions, statements concerning changes in loss trends, settlements and other costs related to our self-insurance programs, statements concerning expectations regarding the payment of dividends, statements regarding the impacts of inflation and rising interest rates in fiscal 2024 and statements concerning estimated taxes.
The following are or may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995: (a) statements including words such as “may,” “will,” “could,” “should,” “believe,” “expect,” “future,” “potential,” “anticipate,” “intend,” “plan,” “estimate,” “continue,” or the negative or other variations thereof; (b) statements regarding matters that are not historical facts; and (c) statements about the Company’s future occurrences, plans and objectives, including those statements included under the heading “Outlook” included in this Management’s Discussion and Analysis and other statements regarding management’s expectations and forecasts for the remainder of fiscal 2025 and beyond, statements regarding future income and cash flows from our new credit program with Citi, statements concerning the opening of new stores or the closing of existing stores, statements concerning capital expenditures and sources of liquidity, statements concerning share repurchases, statements concerning pension contributions, statements concerning changes in loss trends, settlements and other costs related to our self-insurance programs, statements concerning expectations regarding the payment of dividends, statements regarding the impacts of inflation, trade restrictions, including tariffs, and statements concerning estimated taxes.
Included in net income for fiscal 2023 is a pretax gain of $6.1 million ($4.7 million after tax or $0.28 per share) primarily related to the sale of two store properties.
Investment and Employee Stock Ownership Plan during the year. ​ Included in net income for the prior year (fiscal 2023) is a pretax gain of $6.1 million ($4.7 million after tax or $0.28 per share) primarily related to the sale of two store properties.
The progress towards completion is determined by relating the actual costs of work 24 Table of Contents performed to date to the current estimated total costs of the respective contracts. Estimated contract losses are recognized in full when determined. Construction contracts give rise to accounts receivable, contract assets and contract liabilities.
The progress towards completion is determined by relating the actual costs of work performed to date to the current estimated total costs of the respective contracts. Estimated contract losses are recognized in full when determined. Construction contracts give rise to accounts receivable, contract assets and contract liabilities. We record accounts receivable based on amounts billed to customers.
Under the Wells Fargo Alliance, Wells Fargo establishes and owns private label card accounts for our customers, retains the benefits and risks associated with the ownership of the accounts, provides key customer service functions, including new account openings, transaction authorization, billing adjustments and customer inquiries, receives the finance charge income and incurs the bad debts associated with those accounts.
Citi retains the benefits and risks associated with the ownership of the private label card accounts, provides key customer service functions, including new account openings, transaction authorization, billing adjustments and customer inquiries, receives the finance charge income and incurs the bad debts associated with those accounts.
Investment and Employee Stock Ownership Plan during the year, and ● a net $13.7 million ($0.78 per share) income tax benefit due to the release of valuation allowances primarily related to state net operating loss carryforwards. ​ Cash flow from operations was $883.6 million for fiscal 2023 and $948.4 million for fiscal 2022.
Investment and Employee Stock Ownership Plan during the year, and • a net $9.8 million ($0.59 per share) income tax benefit due to the release of valuation allowances primarily related to state net operating loss carryforwards. ​ Cash flow from operations was $714.1 million for fiscal 2024 and $883.6 million for fiscal 2023.
Fiscal 2024 Outlook The Company expects to finance its operations during fiscal 2024 from cash on hand, cash flows generated from operations and, if necessary, utilization of our revolving credit facility.
Outlook The Company expects to finance its operations in the short-term and the long-term from cash on hand, cash flows generated from operations and, if necessary, utilization of our revolving credit facility.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS . At February 3, 2024, Dillard’s, Inc. operates 273 retail department stores spanning 29 states and an Internet store at dillards.com.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS . At February 1, 2025, Dillard’s, Inc. operates 272 retail department stores spanning 30 states and an Internet store at dillards.com.
For comparability purposes, where noted, some of the information discussed below is based upon comparison of the 52 weeks ended January 27, 2024 to the 52 weeks ended January 28, 2023.
Additionally, some of the information discussed below is based upon comparison of the 52 weeks ended January 27, 2024 to the 52 weeks ended January 28, 2023.
The total amount of unrecognized tax benefits as of January 28, 2023 was $7.0 million, of which $5.3 million would, if recognized, affect the Company’s effective tax rate. The Company does not expect a significant change in unrecognized tax benefits in the next twelve months.
The total amount of unrecognized tax benefits as of February 3, 2024 was $8.1 million, of which $6.0 million would, if recognized, affect the Company’s effective tax rate. The Company does not expect a significant change in unrecognized tax benefits in the next twelve months.
Also included in net income for fiscal 2023 are two tax-related benefits: ● a federal income tax benefit of $21.1 million ($1.28 per share) due to a deduction related to that portion of the special dividend of $20.00 per share that was paid to the Dillard's, Inc.
Also included in net income for fiscal 2023 are the following tax-related benefits: 20 Table of Contents • federal and state income tax benefits of $26.1 million ($1.58 per share) due to a deduction related to that portion of the special dividend of $20.00 per share that was paid to the Dillard's, Inc.
A further 50 basis point change in the discount rate would increase or decrease the pension liability by approximately $16 million. The Company expects to make a contribution to the pension plan of approximately $7.1 million in fiscal 2024.
A 50 basis point change in the discount rate would increase or decrease the pension liability by approximately $15 million. The Company expects to make a contribution to the pension plan of approximately $8.2 million in fiscal 2025.
As of February 3, 2024, the Company had completed the authorized purchases under the March 2018 Stock Plan, the May 2021 Stock Plan, the February 2022 Stock Plan and $394.0 million of authorization remained under the May 2023 Stock Plan.
As of February 1, 2025, the Company had completed the authorized purchases under the May 2021 Stock Plan and the February 2022 Stock Plan, and $273.0 million of authorization remained under the May 2023 Stock Plan.
In accordance with the National Retail Federation fiscal reporting calendar and our bylaws, the fiscal 2023 reporting period presented and discussed below ended February 3, 2024 and contained 53 weeks. The fiscal 2022 and 2021 reporting periods presented and discussed below ended January 28, 2023 and January 29, 2022, respectively, and each contained 52 weeks.
In accordance with the National Retail Federation fiscal reporting calendar and our bylaws, the fiscal 2024 reporting period presented and discussed below ended February 1, 2025 and contained 52 weeks. The fiscal 2023 reporting period presented and discussed below ended February 3, 2024 and contained 53 weeks.
During fiscal 2022, the Company received proceeds from life insurance of $4.4 million related to one policy. 33 Table of Contents During fiscal 2023 and 2022, the Company purchased certain treasury bills for $295.4 million and $245.7 million, respectively, that are classified as short-term investments.
During fiscal 2023, the Company received proceeds from life insurance of $4.5 million related to two policies. During fiscal 2024 and 2023, the Company purchased certain treasury bills for $696.7 million and $295.4 million, respectively, that are classified as short-term investments.
Selling, General and Administrative Expenses (“SG&A”) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands of dollars) ​ Fiscal 2023 Fiscal 2022 Fiscal 2021 SG&A: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Retail operations segment ​ $ 1,707,793 ​ $ 1,666,492 ​ $ 1,529,787 ​ Construction segment ​ 9,622 ​ 7,825 ​ 6,767 ​ Total SG&A ​ $ 1,717,415 ​ $ 1,674,317 ​ $ 1,536,554 ​ SG&A as a percentage of segment net sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Retail operations segment ​ ​ 26.4 % ​ 24.9 % ​ 24.0 % Construction segment ​ ​ 3.5 ​ 4.6 5.7 Total SG&A as a percentage of net sales ​ ​ 25.4 ​ 24.4 23.7 ​ 2023 Compared to 2022 SG&A increased $43.1 million and 100 basis points of sales during the 53 weeks ended February 3, 2024 compared to the 52 weeks ended January 28, 2023.
Selling, General and Administrative Expenses (“SG&A”) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands of dollars) Fiscal 2024 Fiscal 2023 Fiscal 2022 SG&A: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Retail operations segment ​ $ 1,720,907 ​ $ 1,707,793 ​ $ 1,666,492 ​ Construction segment ​ 10,327 ​ 9,622 ​ 7,825 ​ Total SG&A ​ $ 1,731,234 ​ $ 1,717,415 ​ $ 1,674,317 ​ SG&A as a percentage of segment net sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Retail operations segment ​ ​ 27.7 % ​ 26.4 % ​ 24.9 % Construction segment ​ ​ 3.9 ​ 3.5 4.6 Total SG&A as a percentage of net sales ​ ​ 26.7 ​ 25.4 24.4 ​ 2024 Compared to 2023 SG&A increased $13.8 million and 130 basis points of sales during the 52 weeks ended February 1, 2025 compared to the 53 weeks ended February 3, 2024.
At February 3, 2024, authorization of $394.0 million remained under the share repurchase program. ​ At February 3, 2024, we had working capital of $1,380.5 million (including cash and cash equivalents and short-term investments totaling $956.3 million) and total debt outstanding of $521.5 million excluding operating lease liabilities. ​ Key Performance Indicators We use a number of key indicators of financial condition and operating performance to evaluate our business, including the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2023 ​ Fiscal 2022 Fiscal 2021 Net sales (in millions) ​ $ 6,752.1 ​ ​ $ 6,871.1 ​ $ 6,493.0 ​ Gross margin (in millions) ​ $ 2,720.9 ​ ​ $ 2,887.5 ​ $ 2,745.3 ​ Gross margin as a percentage of net sales ​ 40.3 % ​ 42.0 % 42.3 % Retail gross margin as a percentage of retail net sales ​ 41.8 % ​ 43.0 % 42.9 % Selling, general and administrative expenses as a percentage of net sales ​ 25.4 % ​ 24.4 % 23.7 % Cash flow provided by operations (in millions) ​ $ 883.6 ​ ​ $ 948.4 ​ $ 1,280.0 ​ Total retail store count at end of period ​ 273 ​ ​ 277 ​ 280 ​ Retail sales per square foot ​ $ 143 ​ ​ $ 146 ​ $ 138 ​ Retail stores sales trend ​ (5) % ** 5 % 53 % Comparable retail store sales trend ​ (4) % ** 5 % * ​ Retail store inventory trend ​ (2) % ​ 4 % (1) % Retail merchandise inventory turnover ​ 2.8 ​ ​ 2.9 ​ 2.9 ​ * The Company reported no comparable store sales data for the fiscal year due to the temporary COVID-19-related closures of its brick-and-mortar stores during the first and second quarters of fiscal 2020 as well as the interdependence between in-store and online sales. ** Based upon the 52 weeks ended January 27, 2024 and the 52 weeks ended January 28, 2023.
At February 1, 2025, authorization of $273.0 million remained under the share repurchase program. ​ At February 1, 2025, we had working capital of $1,533.2 million (including cash and cash equivalents and short-term investments totaling $1,043.5 million) and total debt outstanding of $521.6 million excluding operating lease liabilities. ​ Key Performance Indicators We use a number of key indicators of financial condition and operating performance to evaluate our business, including the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2024 ​ Fiscal 2023 Fiscal 2022 Net sales (in millions) ​ $ 6,482.6 ​ ​ $ 6,752.1 ​ $ 6,871.1 ​ Gross margin (in millions) ​ $ 2,563.1 ​ ​ $ 2,720.9 ​ $ 2,887.5 ​ Gross margin as a percentage of net sales ​ 39.5 % ​ 40.3 % 42.0 % Retail gross margin as a percentage of retail net sales ​ 41.0 % ​ 41.8 % 43.0 % Selling, general and administrative expenses as a percentage of net sales ​ 26.7 % ​ 25.4 % 24.4 % Cash flow provided by operations (in millions) ​ $ 714.1 ​ ​ $ 883.6 ​ $ 948.4 ​ Total retail store count at end of period ​ 272 ​ ​ 273 ​ 277 ​ Retail sales per square foot ​ $ 137 ​ ​ $ 143 ​ $ 146 ​ Retail stores sales trend ​ (2) % * (5) % ** 5 % Comparable retail store sales trend ​ (3) % * (4) % ** 5 % Retail store inventory trend ​ 7 % ​ (2) % 4 % Retail merchandise inventory turnover ​ 2.6 ​ ​ 2.8 ​ 2.9 ​ * Based upon the 52 weeks ended February 1, 2025 and the 52 weeks ended February 3, 2024. ** Based upon the 52 weeks ended January 27, 2024 and the 52 weeks ended January 28, 2023.
Sales in comparable stores decreased 4% for the 52-week period ended January 27, 2024 compared to the 52-week period ended January 28, 2023. During the same 52-week periods, sales of juniors’ and children’s apparel, ladies’ accessories and lingerie, men’s apparel and accessories, ladies’ apparel and shoes decreased significantly, while sales of home and furniture decreased moderately.
Sales in comparable stores decreased 3% for the 52-week period ended February 1, 2025 compared to the 52-week period ended February 3, 2024. During the same 52-week periods, sales of men’s apparel and accessories decreased significantly, while sales of shoes, juniors’ and children’s apparel and ladies’ apparel decreased moderately. Sales of ladies’ accessories and lingerie decreased slightly.
Sales of cosmetics increased moderately. The number of sales transactions during the 53-week period ended February 3, 2024 decreased 6% over the 52-week period ended January 28, 2023, while the average dollars per sales transaction increased 3%.
Sales of home and furniture increased slightly, while sales of cosmetics increased moderately. The number of sales transactions during the 52-week period ended February 1, 2025 decreased 7% over the 53-week period ended February 3, 2024, while the average dollars per sales transaction increased 3%.
Investment and Employee Stock Ownership Plan, including the special dividend of $20.00 per share paid on January 8, 2024. Income taxes also included a net $9.8 million income tax benefit due to the release of valuation allowances primarily related to increases in the expected future utilization of state net operating loss carryforwards.
Investment and Employee Stock Ownership Plan on January 8, 2024. Income taxes also included a net $9.8 million income tax benefit due to the release of valuation allowances primarily related to increases in the expected future utilization of state net operating loss carryforwards. On August 16, 2022, the Inflation Reduction Act of 2022 ("the Act") was signed into law.
In January 2024, the Company announced that it entered into a new agreement with Citi to provide a credit card program for Dillard’s customers, replacing the existing Wells Fargo Alliance.
In January 2024, the Company announced that it entered into a new agreement with Citibank, N.A. (“Citi”) to provide the private label credit card program for Dillard’s customers under a new alliance (“Citibank Alliance”), replacing the existing credit card program under the Wells Fargo Alliance upon its termination in September 2024.
Gross Margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands of dollars) Fiscal 2023 Fiscal 2022 Fiscal 2021 ​ Gross margin: ​ ​ ​ ​ ​ ​ ​ Retail operations segment ​ $ 2,709,071 ​ $ 2,878,910 $ 2,736,762 ​ Construction segment ​ 11,874 ​ 8,573 8,566 ​ Total gross margin ​ $ 2,720,945 ​ $ 2,887,483 $ 2,745,328 ​ Gross margin as a percentage of segment net sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Retail operations segment ​ ​ 41.8 % ​ 43.0 % ​ 42.9 % Construction segment ​ ​ 4.4 ​ 5.1 7.2 Total gross margin as a percentage of net sales ​ ​ 40.3 ​ 42.0 42.3 ​ 28 Table of Contents 2023 Compared to 2022 Gross margin as a percentage of net sales decreased 170 basis points of sales during fiscal 2023 compared to fiscal 2022.
Income from the alliances decreased $13.2 million in fiscal 2024 compared to fiscal 2023. 28 Table of Contents Gross Margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands of dollars) Fiscal 2024 Fiscal 2023 Fiscal 2022 ​ Gross margin: ​ ​ ​ ​ ​ ​ ​ Retail operations segment ​ $ 2,550,665 ​ $ 2,709,071 $ 2,878,910 ​ Construction segment ​ 12,422 ​ 11,874 8,573 ​ Total gross margin ​ $ 2,563,087 ​ $ 2,720,945 $ 2,887,483 ​ Gross margin as a percentage of segment net sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Retail operations segment ​ ​ 41.0 % ​ 41.8 % ​ 43.0 % Construction segment ​ ​ 4.7 ​ 4.4 5.1 Total gross margin as a percentage of net sales ​ ​ 39.5 ​ 40.3 42.0 ​ 2024 Compared to 2023 Consolidated gross margin and gross margin from retail operations decreased 80 basis points of sales during fiscal 2024 compared to fiscal 2023.
Service Charges and Other Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands of dollars) ​ Fiscal 2023 Fiscal 2022 Fiscal 2021 Service charges and other income: ​ ​ ​ ​ ​ ​ Retail operations segment ​ ​ ​ ​ ​ ​ Income from Wells Fargo Alliance ​ $ 67,227 ​ $ 67,768 ​ $ 74,780 Shipping and handling income ​ 40,134 ​ 42,505 ​ 41,850 Other ​ 14,719 ​ 14,553 ​ 13,923 ​ ​ 122,080 ​ 124,826 ​ 130,553 Construction segment ​ 287 ​ 308 ​ 721 Total service charges and other income ​ $ 122,367 ​ $ 125,134 ​ $ 131,274 ​ Service charges and other income is composed primarily of income from the Wells Fargo Alliance.
Service Charges and Other Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands of dollars) Fiscal 2024 Fiscal 2023 Fiscal 2022 Service charges and other income: ​ ​ ​ ​ ​ ​ Retail operations segment ​ ​ ​ ​ ​ ​ Income from the Citibank Alliance and former Wells Fargo Alliance ​ $ 54,073 ​ $ 67,227 ​ $ 67,768 Shipping and handling income ​ 36,637 ​ 40,134 ​ 42,505 Other ​ 16,688 ​ 14,719 ​ 14,553 ​ ​ 107,398 ​ 122,080 ​ 124,826 Construction segment ​ 197 ​ 287 ​ 308 Total service charges and other income ​ $ 107,595 ​ $ 122,367 ​ $ 125,134 ​ Service charges and other income is composed primarily of income from the Citibank Alliance and former Wells Fargo Alliance.
The discount rate increased to 5.1% as of February 3, 2024 from 4.8% as of January 28, 2023.
The discount rate increased to 5.6% as of February 1, 2025 from 5.1% as of February 3, 2024.
Total retail sales decreased 5% for the 52-week period ended January 27, 2024 compared to the 52-week period ended January 28, 2023. Sales in comparable stores for the same period decreased 4%. ​ Consolidated gross margin for fiscal 2023 was 40.3% of sales compared to 42.0% of sales for fiscal 2022.
Sales in comparable stores for the same period decreased 3%. ​ Consolidated gross margin for fiscal 2024 was 39.5% of sales compared to 40.3% of sales for fiscal 2023. Retail gross margin for fiscal 2024 was 41.0% of sales compared to 41.8% of sales for fiscal 2023.
For additional information, see Note 3 in the “Notes to Consolidated Financial Statements” in Item 8 hereof. ​ 35 Table of Contents OFF-BALANCE-SHEET ARRANGEMENTS The Company has not created, and is not party to, any special-purpose entities or off-balance-sheet arrangements for the purpose of raising capital, incurring debt or operating the Company’s business.
OFF-BALANCE-SHEET ARRANGEMENTS The Company has not created, and is not party to, any special-purpose entities or off-balance-sheet arrangements for the purpose of raising capital, incurring debt or operating the Company’s business.
The increase in operating expenses is primarily due to increased payroll and payroll-related expenses and the additional week of operations in the 2023 fiscal year. Payroll and payroll-related expenses for fiscal 2023 were $1,217.3 million compared to $1,172.7 million for fiscal 2022, an increase of 3.8%.
The increase in operating expenses is primarily due to increased payroll and payroll-related expenses, largely occurring in the first half of the year. Payroll and payroll-related expenses for fiscal 2024 were $1,231.4 million compared to $1,217.3 million for fiscal 2023, an increase of 1.2%.
As long as availability exceeds $80 million and certain events of default have not occurred and are not continuing, there are no financial covenant requirements under the credit agreement. The credit agreement, as amended by the 2023 amendment, matures on April 28, 2026. 34 Table of Contents No borrowings were outstanding at February 3, 2024.
As long as availability exceeds $80 million and no specified event of default has occurred or is continuing, there are no financial covenant requirements under the credit agreement. The credit agreement, as amended by the 2023 amendment, was scheduled to mature on April 28, 2026. No borrowings were outstanding at February 1, 2025.
During fiscal 2023, we returned $620.0 million of cash to stockholders in the form of dividends ($338.6 million) and share repurchases ($281.4 million).
During fiscal 2024, we returned $534.8 million of cash to stockholders in the form of dividends and share repurchases.
In March 2024, the Company opened a new 140,000 square foot location at The Empire Mall in Sioux Falls, South Dakota, which marked the Company’s 30 th state of operation.
During fiscal 2024, the Company opened a new location at The Empire Mall in Sioux Falls, South Dakota (140,000 square feet) marking its 30 th state of operation. During fiscal 2023, the Company opened a 100,000 square foot expansion at Gateway Mall in Lincoln, Nebraska.
Income Taxes The Company’s estimated federal and state effective income tax rate was 19.4% in fiscal 2023, 19.6% in fiscal 2022 and 20.8% in fiscal 2021.
Income Taxes The Company’s estimated federal and state effective income tax rate was 18.7% in fiscal 2024, 19.4% in fiscal 2023 and 19.6% in fiscal 2022. The Company expects the fiscal 2025 federal and state effective income tax rate to approximate 23%.
The extent to which our business will be affected by inflation and rising interest costs depends on our customers’ continuing ability and willingness to accept price increases. Gross margin from the construction segment decreased 70 basis points of segment net sales during fiscal 2023 compared to fiscal 2022.
Inflation and trade restrictions, including tariffs, are a concern for management. The extent to which our business will be affected by these factors depends on our customers’ continuing ability and willingness to accept higher costs. Gross margin from the construction segment increased 30 basis points of segment net sales during fiscal 2024 compared to fiscal 2023.
The unsecured notes bear interest at rates ranging from 7.000% to 7.750% with due dates from fiscal 2026 through fiscal 2028.
At February 1, 2025, the Company had $321.6 million of long-term debt, comprised of unsecured notes. The unsecured notes bear interest at rates ranging from 7.000% to 7.750% with due dates from fiscal 2026 through fiscal 2028.
Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements made by the Company and its management as a result of a number of risks, uncertainties and assumptions. Representative examples of those factors include (without limitation) general retail industry conditions and macro-economic conditions including inflation, rising interest rates, a potential U.S.
Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements made by the Company and its management as a result of a number of risks, uncertainties and assumptions.
Also included in net income for fiscal 2022 are two tax-related benefits: 20 Table of Contents ● a federal income tax benefit of $16.3 million ($0.93 per share) due to a deduction related to that portion of the special dividend of $15.00 per share that was paid to the Dillard's, Inc.
Included in net income for fiscal 2024 are federal and state income tax benefits of $30.8 million ($1.91 per share) due to a deduction related to that portion of the special dividend of $25.00 per share that was paid to the Dillard's, Inc.
All of these subordinated debentures were held by Dillard’s Capital Trust I, a 100% owned, unconsolidated finance subsidiary of the Company.
As of February 1, 2025, the Company had $200 million outstanding of its 7.5% subordinated debentures due August 1, 2038. All of these subordinated debentures were held by Dillard’s Capital Trust I, a 100% owned, unconsolidated finance subsidiary of the Company.
Long-term debt maturities over the next five years are (in millions): ​ ​ ​ ​ Fiscal Year Long-Term Debt Maturities 2024 ​ $ — 2025 ​ — 2026 ​ 96.0 2027 ​ 80.0 2028 ​ 145.8 ​ During fiscal 2022, the Company decreased its net level of outstanding debt by $44.8 million related to the maturity of 7.875% Notes.
Long-term debt maturities over the next five years are (in millions): ​ ​ ​ ​ Fiscal Year Long-Term Debt Maturities 2025 ​ $ — 2026 ​ 96.0 2027 ​ 80.0 2028 ​ 145.8 2029 ​ — ​ During fiscal 2025, the Company expects to accrue interest expense of $23.8 million on its long-term debt. Subordinated Debentures .
Cash flows for the Company’s most recent three fiscal years were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percent Change ​ (in thousands of dollars) ​ Fiscal 2023 Fiscal 2022 ​ Fiscal 2021 ​ 2023 - 2022 ​ ​ 2022 - 2021 ​ Operating activities ​ $ 883,590 ​ $ 948,391 ​ $ 1,280,020 ​ ​ (6.8) % ​ ​ (25.9) % Investing activities ​ (115,594) ​ (235,853) ​ (69,788) ​ (51.0) ​ ​ (238.0) Financing activities ​ (620,040) ​ (768,966) ​ (853,812) ​ 19.4 ​ ​ ​ 9.9 Total cash provided (used) ​ $ 147,956 ​ $ (56,428) ​ $ 356,420 ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Activities The primary source of the Company’s liquidity is, and historically has been, cash flows from operations.
Cash flows for the Company’s most recent three fiscal years were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dollar Change (in thousands of dollars) ​ Fiscal 2024 Fiscal 2023 ​ Fiscal 2022 ​ 2024 - 2023 ​ ​ 2023 - 2022 Operating activities ​ $ 714,127 ​ $ 883,590 ​ $ 948,391 ​ $ (169,463) ​ ​ $ (64,801) Investing activities ​ (269,731) ​ (115,594) ​ (235,853) ​ (154,137) ​ ​ 120,259 Financing activities ​ (534,829) ​ (620,040) ​ (768,966) ​ 85,211 ​ ​ ​ 148,926 Total cash (used) provided ​ $ (90,433) ​ $ 147,956 ​ $ (56,428) ​ $ (238,389) ​ ​ $ 204,384 ​ Operating Activities The primary source of the Company’s liquidity is, and historically has been, cash flows from operations.
If the Company’s actual results differ from estimated results due to changes in tax laws, changes in store locations, settlements of tax audits or tax planning, the Company’s effective tax rate and tax balances could be affected. As such, these estimates may require adjustment in the future as additional information becomes available or as circumstances change.
These balances, as well as income tax expense, are determined through management’s estimations, interpretation of tax law for multiple jurisdictions and tax planning. If the Company’s actual results differ from estimated results due to changes in tax laws, changes in store locations, settlements of tax audits or tax planning, the Company’s effective tax rate and tax balances could be affected.
There were no material costs associated or expected with any of these store closures. We remain committed to closing under-performing stores where appropriate and may incur future closing costs related to such stores when they close.
We remain committed to closing stores where appropriate and may incur future closing costs related to such stores when they close.
Letters of credit totaling $19.3 million were issued under the credit agreement leaving unutilized availability under the facility of $734.7 million at February 3, 2024. The Company had no borrowings during fiscal 2023, 2022 and 2021. Long-term Debt . At February 3, 2024, the Company had $321.5 million of long-term debt, comprised of unsecured notes.
Letters of credit totaling $25.3 million were issued under the credit agreement leaving unutilized availability under the facility of $774.7 million at February 1, 2025. The Company had no borrowings during fiscal 2024, 2023 and 2022. In March 2025, the Company amended and extended its revolving credit facility (the "2025 amendment") replacing the Company's previous amended credit agreement.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+5 added−0 removed2 unchanged
Biggest changeThe rate of interest on borrowings under the credit agreement is Adjusted Daily Simple SOFR, as defined in the 2023 amendment, plus 1.75% if average quarterly availability is less than 50% of the total commitment and the rate of interest on borrowings is Adjusted Daily Simple SOFR plus 1.50% if average quarterly availability is greater than or equal to 50% of the total commitment.
Biggest changeThe applicable rate was defined as (A) (x) 1.50% per annum in the case of term benchmark and RFR loans and (y) 0.50% per annum in the case of base rate loans when average quarterly availability is greater than or equal to 50% of the total commitments and (B) (x) 1.75% per annum in the case of term benchmark and RFR loans and (y) 0.75% per annum in the case of base rate loans when average quarterly availability is less than 50% of the total commitments.
The table presents maturities of the Company’s long-term debt and subordinated debentures along with the related weighted-average interest rates by expected maturity dates. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Expected Maturity Date ​ ​ ​ ​ ​ ​ ​ (fiscal year) ​ ​ ​ ​ ​ (in thousands of dollars) ​ 2024 2025 2026 2027 2028 Thereafter Total Fair Value Long-term debt ​ $ — ​ $ — ​ $ 96,000 ​ $ 80,000 ​ $ 145,825 ​ $ — ​ $ 321,825 ​ $ 339,394 Average fixed interest rate ​ — % ​ — % ​ 7.8 % ​ 7.8 % ​ 7.0 % ​ — % ​ 7.4 % ​ ​ Subordinated debentures ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 200,000 ​ $ 200,000 ​ $ 205,440 Average interest rate ​ — ​ — ​ — ​ — ​ — ​ 7.5 % 7.5 % ​ ​ The Company is exposed to market risk from changes in the interest rates under its $800 million revolving credit agreement, which is secured by certain deposit accounts of the Company and certain inventory of certain subsidiaries.
The table presents maturities of the Company’s long-term debt and subordinated debentures along with the related weighted-average interest rates by expected maturity dates. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Expected Maturity Date ​ ​ ​ ​ ​ ​ ​ (fiscal year) ​ ​ ​ ​ ​ (in thousands of dollars) ​ 2025 2026 2027 2028 2029 Thereafter Total Fair Value Long-term debt ​ $ — ​ $ 96,000 ​ $ 80,000 ​ $ 145,825 ​ $ — ​ $ — ​ $ 321,825 ​ $ 336,423 Average fixed interest rate ​ — % ​ 7.8 % ​ 7.8 % ​ 7.0 % ​ — % ​ — % ​ 7.4 % ​ ​ Subordinated debentures ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 200,000 ​ $ 200,000 ​ $ 206,000 Average interest rate ​ — ​ — ​ — ​ — ​ — ​ 7.5 % 7.5 % ​ ​ The Company is exposed to market risk from changes in the interest rates under its $800 million revolving credit agreement, which is secured by certain deposit accounts of the Company and certain inventory of certain subsidiaries.
The commitment fee for unused borrowings is 0.30% per annum if average borrowings are less than 35% of the total commitment and 0.25% if average borrowings are greater than or equal to 35% of the total commitment. The Company had no weighted average borrowings under this facility during fiscal 2023.
The commitment fee for unused borrowings was 0.30% per annum if average borrowings were less than 35% of the total commitments and 0.25% per annum if average borrowings were greater than or equal to 35% of the total commitments. The Company had no weighted average borrowings under this facility during fiscal 2024.
Added
At February 1, 2025, borrowings under the credit agreement bore interest, at our option, at a rate per annum equal to (1) the then alternative base rate plus the applicable rate or (2) adjusted term or daily simple SOFR, in each case plus 0.10% per annum, plus the applicable rate.
Added
In March 2025, the Company amended and extended its senior secured revolving credit facility (the "2025 amendment") replacing the Company's previous amended credit agreement.
Added
The 2025 amendment, among other things, continues to have the 0.10% per annum credit spread adjustment to the interest rate for term benchmark and RFR loans but reduced the applicable rate to (A) (x) 1.25% per annum in the case of term benchmark and RFR loans and (y) 0.25% per annum in the case of base rate loans when average quarterly availability is greater than or equal to 50% of the total commitments and (B) (x) 1.50% per annum in the case of term benchmark and RFR loans and (y) 0.50% per annum in the case of base rate loans when average quarterly availability is less than 50% of the total commitments.
Added
The 2025 amendment also reduced the unused commitment fee to (A) 0.25% per annum when the average amount utilized is less than 50% of the total commitments and (B) 0.20% per annum when the average amount utilized is greater than or equal to 50% of the total commitments.
Added
See Note 15, Subsequent Event , for additional information regarding the 2025 amendment. 37 Table of Contents

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