Dive Brief:
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Dillard’s Q3 total retail sales (not including its construction business) rose 3% year over year to $1.4 billion, as comps rose 3%, the department store said Thursday.
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Sales rose significantly in ladies’ accessories, lingerie and apparel, juniors’ apparel and children’s apparel; moderately in shoes; and slightly in home and furniture, and men’s apparel and accessories, and cosmetics.
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Retail gross margin rose to 45.3% from 44.5% last year, driven by moderate expansion in shoes and ladies’ accessories and lingerie. Inventory was up 2% at quarter end. Net income (including the construction unit) rose 4% to almost $130 million.
Dive Insight:
Dillard’s launches its holiday period with a fairly strong Q3 behind it.
“We were happy to see sales strength continue through the third quarter, ending up 3%,” Dillard’s CEO William Dillard said in a statement. “We look forward to seeing and serving our customers this holiday season.”
In addition to bolstering its top line, the department store has recently gained some market share, according M Science. Dillard’s recent addition of more fashionable brands, especially in men’s, has drawn in younger customers, according to GlobalData research. The growth across categories reflects merchandising strength and relatively strong loyalty that also allows Dillard’s to expand wallet share and drive repeat visits, according to GlobalData Managing Director Neil Saunders.
“In theory, this is something all department stores should be doing — but too many still fall short,” he said in emailed comments.
The Q3 sales growth isn’t a blockbuster but nevertheless “shows that Dillard’s has a good grip on operations and is very well managed,” Saunders also said.
“While it is true that Dillard’s isn’t the most ambitious of retailers and would rarely be in the vanguard for initiatives such as agentic commerce, it more than makes up for this by strict adherence to the basics of retail,” Saunders said. “These things show through in everything from merchandising to customer service, and they make a genuine difference. This focus will continue to serve Dillard’s well in a choppy consumer economy.”
Some analysts do see Dillard’s recent investment in a Texas mall as innovative and even ambitious because it could ultimately help reinvent the outmoded anchored-mall model. Mainly, though, its success derives from retail basics, according to Saunders.
“A lot of this comes down to good buying, constant range refreshes, an authoritative offer, and pleasant store environments,” he said. “Taken together, good execution on these things makes Dillard’s a destination that’s worth visiting. And that, in this more constrained environment, makes all the difference.”
