Dillard's (DDS) Stock Forecast & Price Target

Dillard's Inc. demonstrated a modest yet positive performance with net sales increasing by 1.6% year-over-year, indicating a resilient customer demand amidst market fluctuations. The company's retail comparable sales for the second quarter of 2025 were up 1.0%, aligning with both consensus forecasts and internal estimates, which reflects effective sales strategies and market positioning. Additionally, the reported total sales growth of 1.4%, despite a concurrent 5.9% rise in inventories, suggests that Dillard's is managing its stock levels effectively while driving revenue growth.

Dillard's Inc. reported a notable decline in its Q2 gross margin, which fell 110 basis points year-over-year to 37.5%, significantly underperforming compared to the consensus forecast of 37.8%. Additionally, the consolidated gross margin, including its construction segment, contracted by 100 basis points year-over-year to 36.6%, which was also below prior estimates of 37.9%. These metrics highlight a broader trend of declining profitability, particularly within the ladies' apparel category, indicating potential challenges for the company's financial performance moving forward.