Settlement boost

It’s beginning to look a lot like Christmas for Dillard’s fourth quarter financials.

On Wednesday (Nov. 30), Dillard’s Department Stores reached an agreement with i2 Technologies, Inc., a subsidiary of JDA Software Group, Inc., to settle a $57 million lawsuit that will net the Little Rock mall retailer $28.5 million.

According to a company statement, Dillard’s filed a lawsuit over software sold to Dillard’s by i2 in 2000, prior to JDA’s acquisition of i2 in 2010. Details of the lawsuit were not disclosed.

In its most recent 10-Q filing with the Securities and Exchange Commission, Dillard’s management made no disclosure of a potential material legal proceeding related to the i2 lawsuit.

The $57 million agreement, due on December 5, 2011, will net Dillard’s $28.5 million in net income during the fourth quarter “after providing for income taxes and settlement related expenses,” the company said.

Dillard’s has been on a healthy financial course during the past five quarters, posting profits of $26.6 million in its recent third quarter earnings.

The $28.5 million lawsuit settlement gain will be recognized in Dillard’s fourth quarter financials, which close on Jan. 28, 2012.  If Dillard’s has a strong fourth quarter in sales and profits, as expected, the one-time settlement could significantly boost Dillard’s bottom line for the quarter and full year.