Dillard's (DDS) AI Stock Analysis

• Market Cap: $9.48B
• Dividend Yield: 3.99%
• Average Volume (3M): 142.80K
• Price to Earnings (P/E): 16.6
• Beta (1Y): 1.23
• Revenue Growth: -1.07%
• EPS Growth: -5.22%
• Country: US
• Employees: 28,800
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Department Stores
• EPS (TTM): 10.77
• Shares Outstanding: 11,626,733
• 10 Day Avg. Volume: 149,863
• 30 Day Avg. Volume: 142,804
• PEG Ratio: -16.09
• Price to Book (P/B): 4.03
• Price to Sales (P/S): 1.44
• P/FCF Ratio: 15.20
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 1.37
• Enterprise Value/Gross Profit: 3.58
• Enterprise Value/Ebitda: 10.21
• 1Y Price Target: $519.67
• Price Target Upside: -14.45% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 3
• EPS Forecast (FY): 33.08
• Revenue Forecast (FY): $6.58B

• Rating: 65 Neutral
• Price Target: $641.00 ▲(5.52% Upside)
• Action: Reiterated Date: 02/25/26
• Date: Action: Reiterated 02/25/26

DDS scores as a moderate-quality setup driven primarily by solid financial health (strong balance sheet and ongoing profitability) and supportive shareholder return potential (high dividend yield with a reasonable P/E). The score is held back by weakening operating momentum (declining revenue and softer free-cash-flow trend) and a bearish near-term technical picture with the price below key moving averages.

Positive Factors

Balance Sheet Strength

Dillard's low leverage and sizable equity provide durable financial flexibility. With debt-to-equity near 0.15 and substantial equity relative to assets, the company can withstand retail cyclicality, fund restructuring or opportunistic investments, and maintain capital returns without pressuring liquidity.

Sustained Profitability

Consistent mid-single-digit net margins and meaningful net income support operating resilience across cycles. Strong reported profitability, coupled with a high return on equity (~24%), signals persistent earnings capability from merchandising and store operations that underpins long-term cash generation and shareholder returns.

Solid Cash Generation

Robust operating cash flow and high earnings-to-cash conversion show the business converts sales into spendable cash. Even with recent declines, strong FCF supports dividends, debt paydown and reinvestment, improving strategic optionality and lowering financing risk over the medium term.

Negative Factors

Top-line Weakness

Recurring revenue declines indicate pressure on traffic or merchandise mix that can persist beyond a quarter. Sustained top-line softness reduces operating leverage, limits margin expansion, and constrains capacity to invest in omnichannel growth or remodeling initiatives over the next several months.

Weakening Cash-Flow Momentum

A pronounced FCF decline and coverage below 1x signal timing, working-capital, or mix pressures that can impair funding for strategic projects or shareholder distributions. Continued cash-flow erosion would reduce the buffer provided by the balance sheet and limit capital allocation flexibility.

Margin & Profitability Cyclicality

A notable drop in gross profit and historical swings (losses in 2021 vs strong 2022–24) imply margin volatility tied to merchandise mix and promotional intensity. That cyclicality makes long-term margin forecasting harder and elevates the risk that short-term actions erode structural margins.

Dillard's Business Overview & Revenue Model

Company Description

Dillard's, Inc. operates retail department stores in the southeastern, southwestern, and midwestern areas of the United States. Its stores offer merchandise, including fashion apparel for women, men, and children; and accessories, cosmetics, home furnishings, and other consumer goods. As of January 29, 2022, the company operated 280 Dillard's stores, including 30 clearance centers, and an Internet store at dillards.com. It also engages in the general contracting construction activities. The company was founded in 1938 and is based in Little Rock, Arkansas.

How the Company Makes Money

Dillard's generates revenue primarily through retail sales of merchandise in its department stores. The company has multiple key revenue streams, including sales from its extensive apparel and accessory offerings, home goods, and beauty products. In addition to in-store sales, Dillard's has an online shopping platform that contributes to its revenue, reflecting the growing trend of e-commerce. The company also benefits from private-label brands, which typically offer higher margins compared to national brands. Seasonal promotions, loyalty programs, and collaborations with various brands further enhance sales. Dillard's may also engage in strategic partnerships to expand its product offerings and improve customer engagement, thereby reinforcing its revenue-generating capabilities.

Dillard's Financial Statement Overview

Summary

Financials are solid overall, led by a strong balance sheet (low and improving leverage with debt-to-equity ~0.15 and sizable equity) and continued profitability (~9% net margin). Offsetting this strength are cooling operating trends: revenue declined again in 2026, free cash flow fell ~20% with sub-1x cash-flow coverage of net income in 2025–2026, and results appear cyclical with a notable 2026 profitability mix shift.

Income Statement

DDS remains profitable, with net profit margin holding near ~9% in 2025–2026 and net income of ~$570M in 2026. However, the top line has softened (revenue down ~2.3% in 2026 after a slight decline in 2025), and profitability appears less consistent year-to-year—highlighted by a sharp deterioration in reported gross profit in 2026 versus prior years’ ~40% gross margin. Longer-term, results are cyclical: strong profitability in 2022–2024 contrasted with losses in 2021, which tempers the overall income-statement strength.

Balance Sheet

The balance sheet is a clear positive: leverage is low to moderate and improving, with debt-to-equity down to ~0.15 in 2026 from ~0.31 in 2025, alongside reduced total debt (~$358M). Equity is substantial (~$2.35B) relative to assets (~$3.51B), supporting financial flexibility. Return on equity remains strong (~24% in 2026), though it has come down from exceptionally high levels in 2022–2024, indicating profitability normalization rather than balance-sheet strain.

Cash Flow

Cash generation is solid: operating cash flow was ~ $717M and free cash flow ~ $624M in 2026, with free cash flow running at ~87% of net income (good earnings-to-cash conversion). The main weakness is momentum—free cash flow declined ~20% in 2026 and has been negative growth in most recent years shown. Also, cash flow covered net income less than 1x in 2025–2026 (about ~0.86x and ~0.79x), suggesting some working-capital or timing headwinds versus the stronger coverage seen in 2022–2024.

Breakdown	Jan 2026	Jan 2025	Jan 2024	Jan 2023	Jan 2022
Income Statement
Total Revenue	6.56B	6.59B	6.87B	7.00B	6.62B
Gross Profit	2.47B	2.67B	2.84B	3.01B	2.88B
EBITDA	874.20M	949.10M	1.14B	1.34B	1.33B
Net Income	570.60M	593.48M	738.85M	891.64M	862.47M
Balance Sheet
Total Assets	3.50B	3.53B	3.45B	3.33B	3.25B
Cash, Cash Equivalents and Short-Term Investments	1.07B	1.04B	956.32M	799.24M	716.76M
Total Debt	357.60M	555.32M	564.44M	555.22M	608.73M
Total Liabilities	1.15B	1.73B	1.75B	1.73B	1.79B
Stockholders Equity	2.35B	1.80B	1.70B	1.60B	1.45B
Cash Flow
Free Cash Flow	623.60M	609.58M	750.65M	828.29M	1.18B
Operating Cash Flow	717.00M	714.13M	883.59M	948.39M	1.28B
Investing Cash Flow	22.50M	-269.73M	-115.59M	-235.85M	-69.79M
Financing Cash Flow	-595.90M	-534.83M	-620.04M	-768.97M	-853.81M

Dillard's Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 607.44
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DDS, the sentiment is Negative. The current price of 607.44 is below the 20-day moving average (MA) of 638.83, below the 50-day MA of 641.58, and above the 200-day MA of 544.61, indicating a neutral trend. The MACD of -8.82 indicates Positive momentum. The RSI at 42.22 is Neutral, neither overbought nor oversold. The STOCH value of 30.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DDS.

Dillard's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GAP	76 Outperform	$10.47B	12.56	25.10%	2.45%	0.29%	3.65%
ANF	74 Outperform	$4.49B	9.38	40.72%	―	7.57%	1.75%
URBN	68 Neutral	$5.89B	12.98	17.59%	―	11.09%	51.51%
M	67 Neutral	$5.00B	11.63	11.28%	3.23%	-2.83%	184.32%
DDS	65 Neutral	$9.48B	16.60	31.92%	3.99%	-1.07%	-5.22%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
KSS	58 Neutral	$1.74B	9.60	5.02%	2.33%	-6.13%	-22.57%