Litigation settlement boosts Dillard’s Q1 profitability

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by Roby Brock ([email protected]) May 14, 2026 7:41 am 624 views 

Sales and profits rose for Little Rock-based retailer Dillard’s Inc., aided by a $104.1. million gain on a litigation settlement.

Dillard’s reported net income for the 13 weeks ended May 2 of $250.6 million, or $16.04 per share, compared to $163.8 million, or $10.39 per share, from the previous year’s first quarter.

Included in net income was a pre-tax gain on litigation settlement of $104.1 million related to the company’s favorable settlement of a long-standing lawsuit involving payment card interchange fees.

Even with the one-time settlement boost, Dillard’s revenue for the first quarter rose. Sales topped $1.568 billion, up from $1.529 billion a year ago. Revenue included the operations of the company’s construction business, CDI Contractors LLC.

Total retail sales, which excludes CDI, for the first quarter were $1.518 billion, up from $1.468 billion last year. Total retail sales increased 3% for the quarter, while comparable stores for the same period also increased 3%.

All merchandise categories reported sales increases compared to the prior year first quarter, according to Dillard’s.

“We are pleased to report a good start to 2026 with a profitable 3% sales growth supported by an increased 45.8% retail gross margin,” said CEO William T. Dillard II. “We continue to focus on motivating our customer with newness in our merchandise assortment.”

Other quarterly highlights included:

  • Retail gross margin of 45.8% of sales compared to 45.5% of sales a year ago;
  • Operating expenses were $444 million compared to $421.7 million a year ago; and
  • Ending inventory increased 3%.

During the quarter, the Dillard’s opened a 160,000 square foot location at The Mall at Fairfield Commons in Beavercreek, Ohio. The company operates 272 Dillard’s stores, including 28 clearance centers, spanning 30 states.

Shares of Dillard’s stock (NYSE: DDS) were trading lower in pre-market activity after closing yesterday at $535.09. The company’s stock has traded between a low of $386.85 per share and $741.98 per share over the past year.