Dillard's (DDS) Stock Forecast & Price Target

Dillard's Inc. reported a year-over-year net sales increase of 1.6%, indicating steady demand across its retail operations despite broader economic challenges. Additionally, retail comparable store sales grew by 1.0% for the second quarter of 2025, aligning with market expectations and demonstrating the company's ability to maintain performance amidst evolving consumer trends. The modest inventory increase of 5.9% year over year, coupled with total sales growth of 1.4%, suggests that Dillard's is effectively managing its inventory levels while still achieving revenue growth.

Dillard's Inc. reported a significant decline in its gross margin for Q2, which decreased by 110 basis points year-over-year to 37.5%, falling short of the consensus forecast of 37.8%. Additionally, the consolidated gross margin, including the construction segment CDI Contractors, contracted by 100 basis points to 36.6%, well below prior estimates that anticipated an increase. This downturn in gross margin, particularly highlighted by a pronounced contraction in ladies' apparel, raises concerns about the company's revenue-generating capabilities and overall financial health.