PART I. FINANCIAL INFORMATION

Item 1. Financial ~~Statements~~

Statements.

DILLARD’S, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In Thousands)

October 28,
2017 January 28,
2017 October 29,
2016
Assets

Current assets:

Cash and cash equivalents $ 114,858
$ 346,985
$ 80,482
Accounts receivable 34,951
48,230
42,467
Merchandise inventories 1,957,258
1,406,403
1,901,991
Federal and state income taxes 10,777
—
4,284
Other current assets 52,926
36,303
61,243

Total current assets 2,170,770
1,837,921
2,090,467

Property and equipment (net of accumulated depreciation and amortization of $2,624,883, $2,478,490 and $2,553,315, respectively) 1,711,863
1,790,267
1,825,225
Other assets 252,701
259,948
268,536

Total assets $ 4,135,334
$ 3,888,136
$ 4,184,228

Liabilities and stockholders’ equity

Current liabilities:

Trade accounts payable and accrued expenses $ 1,277,658
$ 839,305
$ 1,123,087
Current portion of long-term debt 248,097
87,201
—
Current portion of capital lease obligations 1,082
3,281
3,258
Other short-term borrowings —
—
17,000
Federal and state income taxes —
46,730
—

Total current liabilities 1,526,837
976,517
1,143,345

Long-term debt 365,394
526,106
613,245
Capital lease obligations 3,167
3,988
4,249
Other liabilities 238,943
238,424
243,296
Deferred income taxes 210,346
225,684
243,888
Subordinated debentures 200,000
200,000
200,000
Commitments and contingencies

Stockholders’ equity:

Common stock 1,238
1,238
1,238
Additional paid-in capital 944,401
943,467
941,709
Accumulated other comprehensive loss (11,137 ) (11,137 ) (16,559 )
Retained earnings 4,210,507
4,153,844
4,099,256
Less treasury stock, at cost (3,554,362 ) (3,369,995 ) (3,289,439 )

Total stockholders’ equity 1,590,647
1,717,417
1,736,205

Total liabilities and stockholders’ equity $ 4,135,334
$ 3,888,136
$ 4,184,228


	April 29,		January 28,		April 30,
	2023		2023		2022
Assets
Current assets:
Cash and cash equivalents	$	848,316	$	650,336	$	862,173
Restricted cash		8,418		9,995		—
Accounts receivable		59,050		56,952		30,920
Short-term investments		98,364		148,902		—
Merchandise inventories		1,410,017		1,120,208		1,364,975
Other current assets		79,030		85,453		96,193

Total current assets		2,503,195		2,071,846		2,354,261

Property and equipment (net of accumulated depreciation of $2,623,182, $2,584,708 and $2,554,485, respectively)		1,108,691		1,118,379		1,170,265
Operating lease assets		32,869		33,821		39,743
Deferred income taxes		41,801		42,278		29,115
Other assets		62,473		62,826		65,424

Total assets	$	3,749,029	$	3,329,150	$	3,658,808

Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable and accrued expenses	$	1,099,669	$	828,484	$	1,163,293
Current portion of long-term debt		—		—		44,800
Current portion of operating lease liabilities		9,086		9,702		11,344
Federal and state income taxes		82,032		20,775		99,288

Total current liabilities		1,190,787		858,961		1,318,725

Long-term debt		321,381		321,354		321,274
Operating lease liabilities		23,691		24,164		28,512
Other liabilities		330,036		326,033		277,964
Subordinated debentures		200,000		200,000		200,000
Commitments and contingencies
Stockholders’ equity:
Common stock		1,240		1,240		1,240
Additional paid-in capital		962,839		962,839		956,653
Accumulated other comprehensive loss		(64,378)		(65,722)		(22,617)
Retained earnings		5,846,802		5,648,700		5,275,371
Less treasury stock, at cost		(5,063,369)		(4,948,419)		(4,698,314)

Total stockholders’ equity		1,683,134		1,598,638		1,512,333

Total liabilities and stockholders’ equity	$	3,749,029	$	3,329,150	$	3,658,808

See notes to condensed consolidated financial statements.

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DILLARD’S, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME ~~AND RETAINED EARNINGS~~

(Unaudited)

(In Thousands, Except Per Share Data)

Three Months Ended Nine Months Ended
October 28,
2017 October 29,
2016 October 28,
2017 October 29,
2016
Net sales $ 1,354,920
$ 1,365,609
$ 4,200,241
$ 4,321,296
Service charges and other income 41,899
40,886
113,262
112,746

1,396,819
1,406,495
4,313,503
4,434,042

Cost of sales 890,076
878,865
2,767,215
2,810,803
Selling, general and administrative expenses 411,164
410,563
1,211,314
1,204,051
Depreciation and amortization 57,040
60,681
176,919
181,933
Rentals 6,263
5,668
18,921
17,538
Interest and debt expense, net 14,980
15,619
46,460
47,312
Loss on early extinguishment of debt 797
—
797
—
(Gain) loss on disposal of assets (4,813 ) 23
(4,855 ) (853 )

Income before income taxes and income on and equity in earnings of joint ventures 21,312
35,076
96,732
173,258
Income taxes 6,785
12,290
33,005
60,980
Income on and equity in earnings of joint ventures 12
12
34
34

Net income 14,539
22,798
63,761
112,312

Retained earnings at beginning of period 4,198,855
4,078,824
4,153,844
3,994,211
Cash dividends declared (2,887 ) (2,366 ) (7,098 ) (7,267 )

Retained earnings at end of period $ 4,210,507
$ 4,099,256
$ 4,210,507
$ 4,099,256

Earnings per share:

Basic and diluted $ 0.50
$ 0.67
$ 2.14
$ 3.24

Cash dividends declared per common share $ 0.10
$ 0.07
$ 0.24
$ 0.21


	Three Months Ended
	April 29,		April 30,
	2023		2022
Net sales	$	1,583,948	$	1,611,668
Service charges and other income		29,959		31,114

		1,613,907		1,642,782

Cost of sales		891,261		861,437
Selling, general and administrative expenses		406,375		400,773
Depreciation and amortization		45,747		46,209
Rentals		4,381		5,079
Interest and debt expense, net		123		10,562
Other expense		4,698		1,936
Gain on disposal of assets		(1,793)		(7,237)

Income before income taxes		263,115		324,023
Income taxes		61,620		72,930

Net income	$	201,495	$	251,093

Earnings per share:
Basic and diluted	$	11.85	$	13.68

See notes to condensed consolidated financial statements.

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DILLARD’S, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In Thousands)

Three Months Ended Nine Months Ended
October 28,
2017 October 29,
2016 October 28,
2017 October 29,
2016
Net income $ 14,539
$ 22,798
$ 63,761
$ 112,312
Other comprehensive income:

Amortization of retirement plan and other retiree benefit adjustments (net of tax of $0, $114, $0 and $344, respectively) —
187
—
559

Comprehensive income $ 14,539
$ 22,985
$ 63,761
$ 112,871


	Three Months Ended
	April 29,		April 30,
	2023		2022
Net income	$	201,495	$	251,093
Other comprehensive income:
Amortization of retirement plan and other retiree benefit adjustments (net of tax of $117 and $58, respectively)		1,344		181

Comprehensive income	$	202,839	$	251,274

See notes to condensed consolidated financial statements.

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DILLARD’S, INC.

CONDENSED CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~

STOCKHOLDERS’ EQUITY

(Unaudited)

(In ~~Thousands)~~

Nine Months Ended
October 28,
2017 October 29,
2016
Operating activities:

Net income $ 63,761
$ 112,312
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization of property and other deferred cost 178,528
183,549
Loss (gain) on disposal of assets 1,006
(853 )
Gain from insurance proceeds (5,861 ) —
Loss on early extinguishment of debt 797
—
Changes in operating assets and liabilities:

Decrease in accounts receivable 13,279
4,671
Increase in merchandise inventories (550,855 ) (529,212 )
Increase in other current assets (15,704 ) (13,198 )
Decrease in other assets 4,451
6,626
Increase in trade accounts payable and accrued expenses and other liabilities 434,743
433,797
Decrease in income taxes (68,643 ) (71,787 )

Net cash provided by operating activities 55,502
125,905

Investing activities:

Purchases of property and equipment (106,272 ) (73,374 )
Proceeds from disposal of assets 11,670
1,049
Proceeds from insurance 4,935
—
Investment in joint venture —
(20,000 )
Distribution from joint venture 2,065
—

Net cash used in investing activities (87,602 ) (92,325 )

Financing activities:

Principal payments on long-term debt and capital lease obligations (3,020 ) (3,046 )
Issuance cost of line of credit (1,115 ) —
Increase in short-term borrowings —
17,000
Cash dividends paid (6,523 ) (7,414 )
Purchase of treasury stock (189,369 ) (162,507 )

Net cash used in financing activities (200,027 ) (155,967 )

Decrease in cash and cash equivalents (232,127 ) (122,387 )
Cash and cash equivalents, beginning of period 346,985
202,869

Cash and cash equivalents, end of period $ 114,858
$ 80,482

Non-cash transactions:

Accrued capital expenditures $ 8,748
$ 7,500
Accrued purchases of treasury stock 1,000
3,110
Stock awards 934
913
Insurance recoveries —
2,761

Thousands, Except Share and Per Share Data)


	Three Months Ended April 29, 2023
					Accumulated
			Additional		Other
	Common		Paid-in		Comprehensive		Retained		Treasury
	Stock		Capital		Loss		Earnings		Stock		Total
Balance, January 28, 2023	$	1,240	$	962,839	$	(65,722)	$	5,648,700	$	(4,948,419)	$	1,598,638
Net income		—		—		—		201,495		—		201,495
Other comprehensive income		—		—		1,344		—		—		1,344
Purchase of 357,154 shares of treasury stock (including excise tax)		—		—		—		—		(114,950)		(114,950)
Cash dividends declared:
Common stock, $0.20 per share		—		—		—		(3,393)		—		(3,393)
Balance, April 29, 2023	$	1,240	$	962,839	$	(64,378)	$	5,846,802	$	(5,063,369)	$	1,683,134


	Three Months Ended April 30, 2022
					Accumulated
			Additional		Other
	Common		Paid-in		Comprehensive		Retained		Treasury
	Stock		Capital		Loss		Earnings		Stock		Total
Balance, January 29, 2022	$	1,240	$	956,653	$	(22,798)	$	5,027,922	$	(4,511,799)	$	1,451,218
Net income		—		—		—		251,093		—		251,093
Other comprehensive income		—		—		181		—		—		181
Purchase of 735,117 shares of treasury stock		—		—		—		—		(186,515)		(186,515)
Cash dividends declared:
Common stock, $0.20 per share		—		—		—		(3,644)		—		(3,644)
Balance, April 30, 2022	$	1,240	$	956,653	$	(22,617)	$	5,275,371	$	(4,698,314)	$	1,512,333

See notes to condensed consolidated financial statements.

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DILLARD’S, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In Thousands)


	Three Months Ended
	April 29,		April 30,
	2023		2022
Operating activities:
Net income	$	201,495	$	251,093
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and other deferred costs		46,155		46,606
Gain on disposal of assets		(1,793)		(7,237)
Accrued interest on short-term investments		(1,881)		—
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable		(2,098)		8,857
Increase in merchandise inventories		(289,809)		(284,797)
Decrease (increase) in other current assets		7,163		(18,468)
Increase in other assets		(380)		(447)
Increase in trade accounts payable and accrued expenses and other liabilities		261,600		293,551
Increase in income taxes payable		60,496		76,024

Net cash provided by operating activities		280,948		365,182

Investing activities:
Purchase of property and equipment and capitalized software		(32,348)		(27,312)
Proceeds from disposal of assets		1,887		8,090
Proceeds from insurance		—		4,438
Purchase of short-term investments		(97,543)		—
Proceeds from maturities of short-term investments		149,962		—

Net cash provided by (used in) investing activities		21,958		(14,784)

Financing activities:
Cash dividends paid		(3,425)		(3,879)
Purchase of treasury stock		(103,078)		(201,105)

Net cash used in financing activities		(106,503)		(204,984)

Increase in cash, cash equivalents and restricted cash		196,403		145,414
Cash, cash equivalents and restricted cash, beginning of period		660,331		716,759

Cash, cash equivalents and restricted cash, end of period	$	856,734	$	862,173

Non-cash transactions:
Accrued capital expenditures	$	8,608	$	6,667
Accrued purchases of treasury stock		11,872		1,643
Lease assets obtained in exchange for new operating lease liabilities		1,807		—

See notes to condensed consolidated financial statements.

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DILLARD’S, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1.Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements of Dillard’s, Inc. (the “Company”) have been prepared in accordance with the rules of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three ~~and nine~~ months ended ~~October 28, 2017~~April 29, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending February 3, ~~2018~~2024 due to, among other factors, the seasonal nature of the business.

These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, ~~2017~~2023 filed with the SEC on March ~~24, 2017.~~27, 2023.

Restricted Cash - Restricted cash consists of cash proceeds from the sale of property held in escrow for the acquisition of replacement property under like-kind exchange agreements. The escrow accounts are administered by an intermediary. Pursuant to the like-kind exchange agreements, the cash remains restricted for a maximum of 180 days from the date of the property sale pending the acquisition of replacement property.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows.


	April 29,		April 30,
(in thousands of dollars)	2023		2022
Cash and cash equivalents	$	848,316	$	862,173
Restricted cash		8,418		—
Total cash, cash equivalents and restricted cash	$	856,734	$	862,173

Note 2. Accounting Standards

Recently Adopted Accounting Pronouncements

There have been no recently adopted accounting pronouncements, except as noted below, that had a material impact on the Company’s condensed consolidated financial statements.

Disclosure of Supplier Finance Program Obligations

In September 2022, the Financial Accounting Standards Board issued accounting standards update ("ASU") No. 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50):Disclosure of Supplier Finance Program Obligations. The ASU is intended to enhance the transparency of the use of supplier finance programs by requiring that the buyers in those programs provide additional disclosures about the program’s nature and potential magnitude, including a rollforward of the obligations and activity during the period. The ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2022, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023. The amendments in the update should be applied retrospectively, except for the amendment on rollforward information, which should be applied prospectively. This ASU was adopted for the fiscal period beginning January 29, 2023 and did not have a material impact on the Company’s condensed consolidated financial statements.

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Under the terms of the Company’s supplier finance program, participating suppliers have the option of payment in advance of an invoice due date, which is paid by certain administering banks, on the basis of invoices that the Company has confirmed as valid and approved. The Company agrees to pay the administering bank the stated amount of confirmed invoices from its designated suppliers on the original due dates of the invoices. The Company’s suppliers are not required to participate in the supplier finance program. The early payment transactions between the Company’s supplier and the administering bank are subject to an agreement between those parties, and the Company does not participate in any financial aspect of the agreement between the Company’s supplier and the administering bank. The Company has not pledged assets or any other security for the committed payment to the administering bank. The Company or the administering bank may terminate the agreement upon at least 30 days’ notice.

The amount of obligations confirmed under the program that remain unpaid by the Company were $1.4 million, $1.8 million and $0.9 million as of April 29, 2023, January 28, 2023 and April 30, 2022, respectively. These obligations are presented within trade accounts payable and accrued expenses in our condensed consolidated balance sheets.

Recently Issued Accounting Pronouncements

Management has considered all recent accounting pronouncements and believes there is no accounting guidance issued but not yet effective that would be material to the Company’s condensed consolidated financial statements.

Note 2.3. Business Segments

The Company operates in two reportable segments: the operation of retail department stores (“retail operations”) and a general contracting construction company (“construction”).

For the Company’s retail operations segment, the Company determined its operating segments on a store by store basis. Each store’s operating performance has been aggregated into one reportable ~~segment. The Company’s operating segments are aggregated~~segment for financial reporting purposes because ~~they~~stores are similar in each of the following areas: economic characteristics, class of consumer, nature of products and distribution methods. Revenues from external customers are derived from merchandise sales, and the Company does not rely on any major customers as a source of revenue. Across all stores, the Company operates one store format under the Dillard’s name where each store offers the same general mix of merchandise with similar categories and similar customers. The Company believes that disaggregating its ~~operating segments~~retail operations segment would not provide meaningful additional information.

The following table summarizes the percentage of net sales by segment and major product line:


	Three Months Ended
	April 29,		April 30,
	2023		2022
Retail operations segment:
Cosmetics	15	%	14	%
Ladies’ apparel	23		23
Ladies’ accessories and lingerie	12		13
Juniors’ and children’s apparel	10		11
Men’s apparel and accessories	18		19
Shoes	15		15
Home and furniture	3		3
	96		98
Construction segment	4		2
Total	100	%	100	%

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The following tables summarize certain segment information, including the reconciliation of those items to the Company’s consolidated operations:

(in thousands of dollars)
Retail
Operations

Construction
Consolidated
Three Months Ended October 28, 2017:

Net sales from external customers $ 1,313,150
$ 41,770

$ 1,354,920
Gross profit 463,034
1,810

464,844
Depreciation and amortization 56,878
162

57,040
Interest and debt expense (income), net 14,988
(8 )
14,980
Income before income taxes and income on and equity in earnings of joint ventures 21,073
239

21,312
Income on and equity in earnings of joint ventures 12
—

12
Total assets 4,097,385
37,949

4,135,334

Three Months Ended October 29, 2016:

Net sales from external customers $ 1,322,641
$ 42,968

$ 1,365,609
Gross profit 484,441
2,303

486,744
Depreciation and amortization 60,513
168

60,681
Interest and debt expense (income), net 15,637
(18 )
15,619
Income before income taxes and income on and equity in earnings of joint ventures 34,333
743

35,076
Income on and equity in earnings of joint ventures 12
—

12
Total assets 4,130,023
54,205

4,184,228

Nine Months Ended October 28, 2017:

Net sales from external customers $ 4,083,223
$ 117,018

$ 4,200,241
Gross profit 1,428,025
5,001

1,433,026
Depreciation and amortization 176,422
497

176,919
Interest and debt expense (income), net 46,508
(48 )
46,460
Income before income taxes and income on and equity in earnings of joint ventures 95,750
982

96,732
Income on and equity in earnings of joint ventures 34
—

34
Total assets 4,097,385
37,949

4,135,334

Nine Months Ended October 29, 2016:

Net sales from external customers $ 4,175,439
$ 145,857

$ 4,321,296
Gross profit 1,503,895
6,598

1,510,493
Depreciation and amortization 181,421
512

181,933
Interest and debt expense (income), net 47,360
(48 )
47,312
Income before income taxes and income on and equity in earnings of joint ventures 171,032
2,226

173,258
Income on and equity in earnings of joint ventures 34
—

34
Total assets 4,130,023
54,205

4,184,228


	Retail
(in thousands of dollars)	Operations		Construction		Consolidated
Three Months Ended April 29, 2023
Net sales from external customers	$	1,514,933	$	69,015	$	1,583,948
Gross margin		690,389		2,298		692,687
Depreciation and amortization		45,687		60		45,747
Interest and debt expense (income), net		228		(105)		123
Income before income taxes		262,823		292		263,115
Total assets		3,686,633		62,396		3,749,029

Three Months Ended April 30, 2022
Net sales from external customers	$	1,580,799	$	30,869	$	1,611,668
Gross margin		748,444		1,787		750,231
Depreciation and amortization		46,151		58		46,209
Interest and debt expense (income), net		10,569		(7)		10,562
Income (loss) before income taxes		324,142		(119)		324,023
Total assets		3,617,164		41,644		3,658,808

Intersegment construction revenues of ~~$14.0~~$10.4 million and ~~$22.4~~$10.0 million for the three months ended ~~October 28, 2017~~April 29, 2023 and ~~October 29, 2016, respectively, and $35.6 million and $55.5 million for the nine months ended October 28, 2017 and October 29, 2016,~~April 30, 2022, respectively, were eliminated during consolidation and have been excluded from net sales for the respective periods.

The retail operations segment gives rise to contract liabilities through the customer loyalty program associated with Dillard’s private label cards and through the issuances of gift cards. The customer loyalty program liability and a portion of the gift card liability are included in trade accounts payable and accrued expenses, and a portion of the gift card liability is included in other liabilities on the condensed consolidated balance sheets. Our retail operations segment contract liabilities are as follows:


Retail
	April 29,		January 28,		April 30,		January 29,
(in thousands of dollars)	2023		2023		2022		2022
Contract liabilities	$	76,011	$	83,909	$	71,779	$	80,421

During the three months ended April 29, 2023 and April 30, 2022, the Company recorded $24.3 million and $25.2 million, respectively, in revenue that was previously included in the retail operations contract liability balances of $83.9 million and $80.4 million at January 28, 2023 and January 29, 2022, respectively.

Construction contracts give rise to accounts receivable, contract assets and contract liabilities. We record accounts receivable based on amounts expected to be collected from customers. We also record costs and estimated earnings in excess of billings on uncompleted contracts (contract assets) and billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities) in other current assets and trade accounts payable and accrued expenses,

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respectively, in the condensed consolidated balance sheets. The amounts included in the condensed consolidated balance sheets are as follows:


Construction
	April 29,		January 28,		April 30,		January 29,
(in thousands of dollars)	2023		2023		2022		2022
Accounts receivable	$	48,334	$	44,286	$	20,895	$	25,912
Costs and estimated earnings in excess of billings on uncompleted contracts		1,473		798		3,342		2,847
Billings in excess of costs and estimated earnings on uncompleted contracts		10,095		10,909		7,511		6,298

During the three months ended April 29, 2023 and April 30, 2022, the Company recorded $9.5 million and $5.8 million, respectively, in revenue that was previously included in billings in excess of costs and estimated earnings on uncompleted contracts of $10.9 million and $6.3 million at January 28, 2023 and January 29, 2022, respectively.

The remaining performance obligations related to executed construction contracts totaled $201.8 million, $189.1 million and $96.1 million at April 29, 2023, January 28, 2023 and April 30, 2022, respectively.

Note 3.4. Earnings Per Share ~~Data~~

The following table sets forth the computation of basic and diluted earnings per share for the periods indicated (in thousands, except per share data).

Three Months Ended Nine Months Ended
October 28,
2017 October 29,
2016 October 28,
2017 October 29,
2016
Net income $ 14,539
$ 22,798
$ 63,761
$ 112,312

Weighted average shares of common stock outstanding 28,934
33,962
29,851
34,717

Basic and diluted earnings per share $ 0.50
$ 0.67
$ 2.14
$ 3.24


	Three Months Ended
	April 29,		April 30,
	2023		2022
Net income	$	201,495	$	251,093

Weighted average shares of common stock outstanding		17,004		18,351

Basic and diluted earnings per share	$	11.85	$	13.68

The Company maintains a capital structure in which common stock is the only equity security issued and outstanding, and there were no shares of preferred stock, stock options, other dilutive securities or potentially dilutive securities issued or outstanding during the three ~~and nine~~ months ended ~~October 28, 2017~~April 29, 2023 and ~~October 29, 2016.~~

April 30, 2022.

Note 4.5. Commitments and Contingencies

Various legal proceedings, in the form of lawsuits and claims, which occur in the normal course of business, are pending against the Company and its subsidiaries. In the opinion of management, disposition of these matters, individually or in the aggregate, is not expected to ~~have a material adverse effect on~~materially affect the Company’s financial position, cash flows or results of operations.

At ~~October 28, 2017~~,April 29, 2023, letters of credit totaling ~~$26.6~~$19.3 million were issued under the Company’s revolving credit facility.

See Note 5.7, Revolving Credit Agreement, for additional information.

Note 6. Benefit Plans

The Company has an unfunded, nonqualified defined benefit plan (“Pension Plan”) for its officers. The Pension Plan is noncontributory and provides benefits based on years of service and compensation during employment. ~~The Company determines pension~~Pension expense is determined using an actuarial cost method to estimate the total benefits ultimately payable to officers and allocates this cost to service periods. The actuarial assumptions used to calculate pension costs are reviewed annually.

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The Company contributed ~~$1.2 million and $4.0~~$1.6 million to the Pension Plan during the three ~~and nine~~ months ended ~~October 28, 2017, respectively,~~April 29, 2023 and expects to make additional contributions to the Pension Plan of approximately ~~$1.2~~$5.2 million during the remainder of fiscal ~~2017~~.

2023.

The components of net periodic benefit costs are as follows (in thousands):

Three Months Ended Nine Months Ended
October 28,
2017 October 29,
2016 October 28,
2017 October 29,
2016
Components of net periodic benefit costs:

Service cost $ 874
$ 983
$ 2,620
$ 2,950
Interest cost 1,807
1,920
5,422
5,759
Net actuarial loss —
301
—
903
Net periodic benefit costs $ 2,681
$ 3,204
$ 8,042
$ 9,612

~~Net~~


	Three Months Ended
	April 29,		April 30,
(in thousands of dollars)	2023		2022
Components of net periodic benefit costs:
Service cost	$	1,262	$	1,019
Interest cost		3,237		1,697
Net actuarial loss		1,461		239
Net periodic benefit costs	$	5,960	$	2,955

The service cost component of net periodic benefit costs ~~are~~is included in selling, general and administrative ~~expenses.~~

expenses, and the interest costs and net actuarial loss components are included in other expense in the condensed consolidated statements of income.

Note 6.7. Revolving Credit Agreement

~~In August 2017, the~~

The Company ~~amended and extended its senior unsecured revolving~~maintains a credit facility ~~(the "new~~ (“credit ~~agreement"~~agreement”) ~~replacing the Company's previous credit agreement. The new credit agreement is available to the Company~~ for general corporate purposes including, among other uses, working capital financing, the issuance of letters of credit, capital expenditures and, subject to certain restrictions, the repayment of existing indebtedness and share repurchases. The ~~new~~ credit agreement, which is secured by certain deposit accounts of the Company and certain inventory of certain subsidiaries, provides a borrowing capacity of $800 million, subject to certain limitations as outlined in the credit agreement, with a $200 million expansion ~~option and matures on August 9, 2022. The~~option.

In April 2021, the Company amended the credit agreement (the "2021 amendment"). Pursuant to the 2021 amendment, the Company pays a variable rate of interest on borrowings under the credit agreement and a commitment fee to the

participating ~~banks based on the Company's debt rating.~~banks. The rate of interest on borrowings is LIBOR plus ~~1.375%~~1.75% if average quarterly availability is less than 50% of the total commitment, as defined in the 2021 amendment ("total commitment"), and the rate of interest on borrowings is LIBOR plus 1.50% if average quarterly availability is greater than or equal to 50% of the total commitment. The commitment fee for unused borrowings is ~~0.20%~~0.30% per ~~annum.~~

annum if average borrowings are less than 35% of the total commitment and 0.25% if average borrowings are greater than or equal to 35% of the total commitment. As long as availability exceeds $80 million and certain events of default have not occurred and are not continuing, there are no financial covenant requirements under the credit agreement. The credit agreement, as amended by the 2021 amendment, matures on April 28, 2026.

At ~~October 28, 2017,~~April 29, 2023, no borrowings were outstanding, and letters of credit totaling ~~$26.6~~$19.3 million were issued under the ~~new~~ credit agreement leaving unutilized availability under the facility of ~~approximately $773~~$780.7 million.

To be in compliance with the financial covenants of the new credit agreement, the Company's total leverage ratio cannot exceed 3.5 to 1.0, and the coverage ratio cannot be less than 2.5 to 1.0, as defined in the new credit agreement. At October 28, 2017, the Company was in compliance with all financial covenants related to the new credit agreement.

In connection with the amendment and extension of the Company's senior unsecured revolving credit facility, we recorded charges totaling $0.8 million due to the the write-off of certain deferred financing fees during the three months ended October 28, 2017.

Note 7.8. Stock Repurchase ~~Program~~

~~On February 25, 2016,~~Programs

In May 2021, the Company’s Board of Directors ~~authorized~~approved a stock repurchase program authorizing the Company to repurchase up to $500 million of its Class A Common Stock ("May 2021 Stock Plan"). In February 2022, the Company’s Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $500 million of its Class A Common Stock (“February 2022 Stock Plan”).

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The following is a summary of share repurchase activity for the periods indicated (in thousands, except per share data):


	Three Months Ended
	April 29,		April 30,
	2023		2022
Cost of shares repurchased	$	113,810	$	186,515
Number of shares repurchased		357		735
Average price per share	$	318.66	$	253.72

All repurchases of the Company’s Class A Common Stock above were made at the market price at the trade date, and all amounts paid to reacquire these shares were allocated to treasury stock. As of April 29, 2023, the Company had completed the authorized purchases under the May 2021 Stock Plan, and $61.6 million of authorization remained under the February 2022 Stock Plan.

Subsequent to the end of the quarter ended April 29, 2023, the Company completed the remaining authorized purchases under the February 2022 Stock Plan, and in May 2023, the Company’s Board of Directors approved a new stock repurchase program authorizing the Company to repurchase up to $500 million of its Class A Common Stock under an open-ended ~~stock plan.~~plan (“May 2023 Stock Plan”). The ~~authorization~~May 2023 Stock Plan permits the Company to repurchase its Class A Common Stock in the open market, pursuant to preset trading plans meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, or through privately negotiated transactions. ~~The authorization has no expiration date.~~

~~The following is a summary of share repurchase activity for the periods indicated (in millions, except per share data):~~

Three Months Ended Nine Months Ended
October 28,
2017 October 29,
2016 October 28,
2017 October 29,
2016
Cost of shares repurchased $ 23.7
$ 53.1
$ 184.4
$ 165.6
Number of shares repurchased 0.4
0.9
3.5
2.5
Average price per share $ 55.35
$ 61.64
$ 52.48
$ 67.13

All repurchases of the Company’s Class A Common Stock above were made at the market price at the trade date. Accordingly, all amounts paid to reacquire these shares were allocated to Treasury Stock. As of October 28, 2017, $69.5 million of authorization remained under the Company's stock repurchase plan.

Note 8.9. Income Taxes

During the three ~~and nine~~ months ended ~~October 28, 2017,~~April 29, 2023 and April 30, 2022, income tax expense differed from what would be computed using the statutory federal income tax rate primarily due to the ~~effect~~effects of state and local income taxes offset by tax benefits recognized for federal tax credits. During the three and nine months ended October 28, 2017, tax benefits recognized for federal tax credits includes tax benefits related to legislation enacted on September 29, 2017 providing an employee retention credit to employers impacted by the recent hurricanes.

During the three and nine months ended October 29, 2016, income tax expense differed from what would be computed using the statutory federal tax rate primarily due to the effect of state and local income taxes partially offset by tax benefits recognized for federal tax credits.

~~Note 9. Reclassifications from Accumulated Other Comprehensive Loss (“AOCL”)~~

~~Reclassifications from AOCL are summarized as follows (in thousands):~~

Amount Reclassified from AOCL
Three Months Ended Nine Months Ended Affected Line Item in the Statement Where Net Income Is Presented
Details about AOCL Components October 28, 2017 October 29, 2016 October 28,
2017 October 29,
2016
Defined benefit pension plan items

Amortization of actuarial losses $ —
$ 301
$ —
$ 903
Total before tax (1)
—
114
—
344
Income tax expense
$ —
$ 187
$ —
$ 559
Total net of tax

At January 28, 2017, the net actuarial loss was $18.0 million, and the projected benefit obligation was $183.6 million. For fiscal year 2017, there is no amortization of the net loss in accumulated other comprehensive income as the net loss does not exceed 10% of the projected benefit obligation.

taxes.

~~(1)These items are included in the computation of net periodic pension cost. See Note 5,~~ ~~Benefit Plans, for additional information.~~

~~Note 10. Changes in Accumulated Other Comprehensive Loss~~

~~Changes in AOCL by component (net of tax) are summarized as follows (in thousands):~~

Defined Benefit Pension Plan Items
Three Months Ended Nine Months Ended
October 28, 2017 October 29, 2016 October 28,
2017 October 29,
2016
Beginning balance $ 11,137
$ 16,746
$ 11,137
$ 17,118

Other comprehensive income before reclassifications —
—
—
—
Amounts reclassified from AOCL —
(187 ) —
(559 )
Net other comprehensive income —
(187 ) —
(559 )

Ending balance $ 11,137
$ 16,559
$ 11,137
$ 16,559

Note ~~11.~~10. Gain on Disposal of Assets

During the three months ended ~~October 28, 2017,~~April 29, 2023, the Company ~~received~~recorded proceeds of ~~$11.6~~$1.9 million primarily from the sale of aone store property, ~~insurance recovery on a previously damaged full-line store location and sale of equipment,~~ resulting in a gain of ~~$4.8~~$1.8 million that was recorded in gain on disposal of assets.

During the ~~nine~~three months ended ~~October 28, 2017,~~April 30, 2022, the Company ~~received~~recorded proceeds of ~~$16.6~~$8.1 million primarily from the sale of ~~two~~one store ~~properties, insurance recovery on a previously damaged full-line store location and sale of equipment,~~property, resulting in a gain of ~~$4.9~~$7.2 million that was recorded in gain on disposal of assets.

Note ~~12.~~11. Fair Value Disclosures

The estimated fair values of financial instruments presented herein have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of amounts the Company could realize in a current market exchange.

The fair value of the Company’s long-term debt and subordinated debentures isare based on market ~~prices.~~

prices and are categorized as Level 1 in the fair value hierarchy.

The fair value of the Company’s cash and cash equivalents, restricted cash and trade accounts receivable approximates their carrying values at ~~October 28, 2017~~April 29, 2023 due to the short-term maturities of these instruments. The Company’s short-term investments are recorded at amortized cost, which is consistent with the Company’s held-to-maturity classification. The fair ~~value~~values of the Company’s long-term debt ~~(including current portion)~~ at ~~October 28, 2017 was~~April 29, 2023 were approximately ~~$669~~$330 million. The carrying ~~value~~values of the Company’s long-term debt ~~(including current portion)~~ at ~~October 28, 2017 was $613.5~~April 29, 2023 were approximately $321 million. The fair ~~value~~values of the Company’s subordinated debentures at ~~October 28, 2017 was~~April 29, 2023 were approximately ~~$204~~$206 million. The carrying ~~value~~values of the Company’s subordinated debentures at ~~October 28, 2017 was~~April 29, 2023 were $200 million.

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~~Note 13. Recently Issued Accounting Standards~~

~~Revenue from Contracts with Customers~~

~~In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~, which stipulates that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, an entity should apply the following steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

~~This update was amended by ASU No. 2015-14,~~ ~~Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date for the Company from the first quarter of fiscal 2017 to the first quarter of fiscal 2018.~~

~~In March 2016, the FASB issued ASU No. 2016-08,~~ ~~Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).~~ This ASU clarifies the implementation guidance on principal versus agent considerations, as it assists in the determination of whether the entity controls the good or service before it is transferred to the customer.

~~In April 2016, the FASB issued ASU No. 2016-10,~~ ~~Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.~~ ~~This ASU clarifies two aspects of Topic 606, including identifying performance obligations and the licensing implementation guidance, while retaining the principles for those areas.~~

~~In May 2016, the FASB issued ASU No. 2016-12,~~ ~~Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients~~. This ASU clarifies three aspects of Topic 606, including the objective of the collectibility criterion, the measurement date for noncash consideration and the requirements for a completed contract. The ASU also includes a practical expedient for contract modifications. Additionally, the amendments allow an entity to exclude amounts collected from customers for all sales taxes from the transaction price.

The Company has substantially completed its initial evaluation of the impact of these updates on its consolidated financial statements, including an in-depth assessment of all revenue streams to determine which processes will be affected by these updates and the transition methods for applying the updates. Based on the results of the assessment, the Company is focusing on the construction segment revenue that is recorded using the percentage of completion method and working to quantify the impact to the financial statements. The Company expects that there will be certain adjustments to the retail operations that are not expected to be material to the consolidated financial statements. The Company will adopt the standard using the full retrospective method during the first quarter of fiscal 2018.

~~Leases: Amendments to the FASB Accounting Standards Codification~~

~~In February 2016, the FASB issued ASU No. 2016-02,~~ ~~Leases (Topic 842): Amendments to the FASB Accounting Standards Codification,~~ to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. Under these amendments, lessees are required to recognize lease assets and lease liabilities for leases historically classified as operating leases under Accounting Standards Codification, ~~Leases (Topic 840)~~. ASU No. 2016-02 is effective for financial statements issued for fiscal years beginning after December 15, 2018, and early adoption is permitted. The Company's operating leases include building and equipment leases. The Company expects the majority of these current operating leases will be impacted by this ASU resulting in increases in assets and liabilities in the Company's consolidated financial statements. While early adoption is permitted for this ASU, the Company intends to adopt the standard during the first quarter of fiscal 2019.

~~Classification of Certain Cash Receipts and Cash Payments~~

~~In August 2016, the FASB issued ASU No. 2016-15,~~ ~~Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,~~ to reduce the diversity in practice of how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments within ASU No. 2016-15 are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Although early adoption is permitted, the Company plans to adopt the standard during the first quarter of fiscal 2018. The Company is currently assessing the impact of this update on its consolidated financial statements.

~~Intra-Entity Transfers of Assets Other Than Inventory~~

~~In October 2016, the FASB issued ASU No. 2016-16,~~ ~~Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory,~~ as part of its initiative to reduce complexity in accounting standards. Under these amendments, an entity is required to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments within ASU No. 2016-16 are effective for financial statements issued for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company expects this update to result in a decrease of approximately $174 million to both other assets and deferred tax liabilities in its consolidated financial statements under existing enacted tax rates. The Company intends to adopt the standard during the first quarter of fiscal 2018.

~~Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost~~

~~In March 2017, the FASB issued ASU No. 2017-07,~~ ~~Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,~~to improve the presentation of net periodic pension cost in the income statement. The amendments within ASU No. 2017-07 are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendments in this update are to be applied retrospectively. The Company is currently assessing the impact of this update on its consolidated financial statements. The Company intends to adopt the standard during the first quarter of fiscal 2018.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations~~

Operations.

The following discussion should be read in conjunction with the condensed consolidated financial statements and the footnotes thereto included elsewhere in this report, as well as the financial and other information included in our Annual Report on Form 10-K for the year ended January 28, ~~2017.~~

2023.

EXECUTIVE OVERVIEW

The Company recorded a 1% decline in sales during the third quarter of 2017 compared to the third quarter of 2016 largely due to hurricanes Harvey and Irma affecting Texas and Florida, which are the Company's two largest states by sales. DuringCompany’s results for the three months ended ~~October 28, 2017, comparable store~~April 29, 2023 reflected a good performance, marking the Company’s second-highest first quarter net income performance following last year’s highest first quarter net income performance. Management noted a decline in customer activity in the back half of the first quarter which resulted in a retail sales decline of 4% for the period.

Retail gross margin for the three months ended April 29, 2023 declined ~~1% over last year's third quarter. Gross margin~~to 45.6% of sales from ~~retail operations~~a record 47.3% for the prior year first quarter as a result of increased markdowns and decreased ~~137 basis points of net sales.~~markups. Inventory increased 3% at April 29, 2023 compared to April 30, 2022. Selling, general and administrative (“SG&A”) expenses ~~("SG&A") from retail operations~~for the three months ended April 29, 2023 increased ~~24 basis points~~to $406.4 million (25.7% of ~~net sales. The~~sales) compared to $400.8 million (24.9% of sales) for the prior year first quarter.

For the three months ended April 29, 2023, the Company reported ~~consolidated~~ net income of ~~$14.5~~$201.5 million ($~~0.50~~11.85 per share) ~~for the current year third quarter~~ compared to ~~consolidated~~ net income of ~~$22.8~~$251.1 million ($~~0.67~~13.68 per share) for the prior year ~~third~~first quarter.

Included in net income for the ~~current year third quarter~~three months ended April 29, 2023 is a ~~pre-tax~~pretax gain ~~on disposal~~ of ~~assets of $4.8~~$1.8 million ($~~3.1~~1.4 million after tax or ~~$0.11~~$0.08 per share) ~~and a $0.8 million loss on early extinguishment of debt ($0.5 million after tax or $0.02 per share). The gain on disposal of assets includes~~primarily related to the sale of a store property and insurance recovery on a previously damaged full-line store location partially offset by a loss on the sale of equipment. The loss on early extinguishment of debt of $0.8 million was due to the the write-off of certain deferred financing feesproperty. Included in ~~connection with the amendment and extension of the Company's senior unsecured revolving credit facility.~~

~~During~~net income for the three months ended ~~October 28, 2017,~~April 30, 2022 is a pretax gain of $7.2 million ($5.6 million after tax or $0.31 per share) primarily related to the sale of a store property.

Cash flows provided by operating activities were $280.9 million for the three months ended April 29, 2023. The Company repurchased approximately 0.4 million shares of its outstanding Class A Common Stock for $113.8 million under its stock repurchase plan during the three months ended April 29, 2023. The Company repurchased approximately 0.7 million shares of its outstanding Class A Common Stock for $186.5 million under its stock repurchase plans during the three months ended April 30, 2022. At April 29, 2023, $61.6 million of authorization remained under the Company’s open stock repurchase plan.

Subsequent to the end of the quarter ended April 29, 2023, the Company ~~purchased $23.7~~completed the remaining authorized purchases under its previous stock repurchase plan, and in May 2023, the Company’s Board of Directors approved a new stock repurchase program authorizing the Company to repurchase up to $500 million of its Class A Common Stock under ~~its $500 million stock repurchase plan.~~ an open-ended plan (“May 2023 Stock Plan”).

As of ~~October 28, 2017, authorization of $69.5 million remained under the plan.~~

~~As of October 28, 2017,~~April 29, 2023, the Company had working capital of ~~$643.9~~$1,312.4 million (including cash and cash equivalents, restricted cash and short-term investments of ~~$114.9~~$848.3 million, $8.4 million and ~~$813.5~~$98.4 million, respectively) and $521.4 million of total debt outstanding, excluding ~~capital~~operating lease ~~obligations. Cash flows from operating activities were $55.5 million for the nine months ended October 28, 2017.~~

liabilities.

The Company ~~currently operates 268 Dillard's locations, 25~~maintained 274 Dillard’s stores, including 27 clearance centers, and ~~one~~an internet ~~store.~~store as of April 29, 2023.

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Key Performance Indicators

We use a number of key indicators of financial condition and operating performance to evaluate our business, including the following:

Three Months Ended
October 28,
2017 October 29,
2016
Net sales (in millions) $ 1,354.9
$ 1,365.6
Retail stores sales trend (1 )% (4 )%
Comparable retail stores sales trend (1 )% (4 )%
Gross profit (in millions) $ 464.8
$ 486.7
Gross profit as a percentage of net sales 34.3 % 35.6 %
Retail gross profit as a percentage of net sales 35.3 % 36.6 %
Selling, general and administrative expenses as a percentage of net sales 30.3 % 30.1 %
Cash flow from operations (in millions) $ 55.5
$ 125.9
Total retail store count at end of period 293
294
Retail sales per square foot $ 27
$ 27
Retail store inventory trend 3 % (2 )%
Annualized retail merchandise inventory turnover 2.0
2.1


	Three Months Ended
	April 29,			April 30,
	2023			2022
Net sales (in millions)	$	1,583.9		$	1,611.7
Retail stores sales trend		(4)	%		22	%
Comparable retail stores sales trend		(4)	%		23	%
Gross margin (in millions)	$	692.7		$	750.2
Gross margin as a percentage of net sales		43.7	%		46.5	%
Retail gross margin as a percentage of retail net sales		45.6	%		47.3	%
Selling, general and administrative expenses as a percentage of net sales		25.7	%		24.9	%
Cash flow provided by operations (in millions)	$	280.9		$	365.2
Total retail store count at end of period		274			280
Retail sales per square foot	$	33		$	34
Retail store inventory trend		3	%		4	%
Annualized retail merchandise inventory turnover		2.5			2.7

General

Net sales.Net sales includes merchandise sales of comparable and non-comparable stores and revenue recognized on contracts of CDI Contractors, LLC (“CDI”), the Company’s general contracting construction company. Comparable store sales includes sales for those stores which were in operation for a full period in both the ~~current~~most recently completed quarter and the corresponding quarter for the prior ~~year.~~fiscal year, including our internet store. Comparable store sales excludes changes in the allowance for sales returns. Non-comparable store sales includes: sales in the current fiscal year from stores opened during the previous fiscal year before they are considered comparable stores; sales from new stores opened during the current fiscal year; sales in the previous fiscal year for stores closed during the current or previous fiscal year that are no longer considered comparable stores; sales in clearance centers; and changes in the allowance for sales returns.

Sales occur as a result of interaction with customers across multiple points of contact, creating an interdependence between in-store and online sales. Online orders are fulfilled from both fulfillment centers and retail stores. Additionally, online customers have the ability to buy online and pick up in-store. Retail in-store customers have the ability to purchase items that may be ordered and fulfilled from either a fulfillment center or another retail store location. Online customers may return orders via mail, or customers may return orders placed online to retail store locations. Customers who earn reward points under the private label credit card program may earn and redeem rewards through in-store or online purchases.

Service charges and other income.Service charges and other income includes income generated through the long-term ~~private label card~~marketing and servicing alliance with Wells Fargo Bank, N.A. (“Wells Fargo Alliance”). Other income includes rental income, shipping and handling fees and gift card ~~breakage and lease income on leased departments.~~

breakage.

Cost of sales.Cost of sales includes the cost of merchandise sold (net of purchase discounts, non-specific margin maintenance allowances and merchandise margin maintenance allowances), bankcard fees, freight to the distribution centers, employee and promotional discounts, shipping to customers and direct payroll for salon personnel. Cost of sales also includes CDI contract costs, which comprise all direct material and labor costs, subcontract costs and those indirect costs related to contract performance, such as indirect labor, employee benefits and insurance program costs.

Selling, general and administrative expenses.Selling, general and administrative expenses include buying, occupancy, selling, distribution, warehousing, store and corporate expenses (including payroll and employee benefits),

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insurance, employment taxes, advertising, management information systems, legal and other corporate level expenses. Buying expenses consist of payroll, employee benefits and travel for design, buying and merchandising personnel.

Depreciation and amortization.Depreciation and amortization expenses include depreciation and amortization on property and equipment.

Rentals.Rentals includes expenses for store leases, including contingent rent, ~~and~~ data processing and other equipment ~~rentals.~~

rentals and office space leases.

Interest and debt expense, net.Interest and debt expense includes interest, net of interest income from demand deposits and short-term investments and capitalized interest, relating to the Company’s unsecured notes, subordinated debentures and commitment fees and borrowings, if any, under the Company’s credit ~~facility.~~

agreement. Interest and debt expense also includes ~~gains and losses on note repurchases, if any,~~the amortization of financing costs and interest on ~~capital~~finance lease obligations.

~~Loss on early extinguishment~~

Other expense. Other expense includes the interest cost and net actuarial loss components of ~~debt.~~ ~~Loss on early extinguishment of debt includes~~net periodic benefit costs related to the Company’s unfunded, nonqualified defined benefit plan and charges related to the ~~write-off~~write off of certain deferred financing fees in connection with the amendment and extension of the Company's ~~senior unsecured~~secured revolving credit ~~facility.~~

facility, if any.

Gain on disposal of assets.Gain on disposal of assets includes the net gain or loss on the sale or disposal of property and equipment, as well as gains from insurance proceeds in excess of the cost basis of insured assets, if any.

LIBOR

On March 5, 2021, the ~~insured assets.~~

~~Income on and equity~~U.K. Financial Conduct Authority, which regulates LIBOR, announced that all LIBOR settings will either cease to be provided by any administrator or no longer be representative: (a) immediately after December 31, 2021, in ~~earnings of joint ventures.~~ ~~Income on and equity in earnings of joint ventures includes~~ the ~~Company's portion~~case of the ~~income or loss~~1-week and 2-month U.S. dollar settings; and (b) immediately after June 30, 2023, in the case of the ~~Company's unconsolidated joint ventures.~~

remaining U.S. dollar settings. The 2021 amendment to our credit agreement included an approach to replace LIBOR with a SOFR-based rate and we are currently in discussions to achieve the transition. We are also currently engaged with Wells Fargo to amend the Company’s private label card agreement to transition to a SOFR-based rate.

Seasonality

Our business, like many other retailers, is subject to seasonal influences, with a significant portion of sales and income typically realized during the last quarter of our fiscal year due to the holiday season. Because of the seasonality of our business, results from any quarter are not necessarily indicative of the results that may be achieved for a full fiscal year.

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RESULTS OF OPERATIONS

The following table sets forth the results of operations as a percentage of net sales for the periods indicated (percentages may not foot due to rounding):

Three Months Ended Nine Months Ended
October 28,
2017 October 29,
2016 October 28,
2017 October 29,
2016
Net sales 100.0 % 100.0 % 100.0 % 100.0 %
Service charges and other income 3.1
3.0
2.7
2.6

103.1
103.0
102.7
102.6

Cost of sales 65.7
64.4
65.9
65.0
Selling, general and administrative expenses 30.3
30.1
28.8
27.9
Depreciation and amortization 4.2
4.4
4.2
4.2
Rentals 0.5
0.4
0.5
0.4
Interest and debt expense, net 1.1
1.1
1.1
1.1
Loss on early extinguishment of debt 0.1
—
—
—
Gain on disposal of assets (0.4 ) —
(0.1 ) —

Income before income taxes and income on and equity in earnings of joint ventures 1.6
2.6
2.3
4.0
Income taxes 0.5
0.9
0.8
1.4
Income on and equity in earnings of joint ventures —
—
—
—

Net income 1.1 % 1.7 % 1.5 % 2.6 %


	Three Months Ended
	April 29,		April 30,
	2023		2022
Net sales	100.0	%	100.0	%
Service charges and other income	1.9		1.9

	101.9		101.9

Cost of sales	56.3		53.5
Selling, general and administrative expenses	25.7		24.9
Depreciation and amortization	2.9		2.9
Rentals	0.3		0.3
Interest and debt expense, net	0.0		0.7
Other expense	0.3		0.1
Gain on disposal of assets	(0.1)		(0.4)

Income before income taxes	16.6		20.1
Income taxes	3.9		4.5

Net income	12.7	%	15.6	%

Net Sales

Three Months Ended
(in thousands of dollars) October 28,
2017 October 29,
2016 $ Change
Net sales:

Retail operations segment $ 1,313,150
$ 1,322,641
$ (9,491 )
Construction segment 41,770
42,968
(1,198 )
Total net sales $ 1,354,920
$ 1,365,609
$ (10,689 )


	Three Months Ended
	April 29,		April 30,
(in thousands of dollars)	2023		2022		$ Change
Net sales:
Retail operations segment	$	1,514,933	$	1,580,799	$	(65,866)
Construction segment		69,015		30,869		38,146
Total net sales	$	1,583,948	$	1,611,668	$	(27,720)

The percent change ~~in the Company’s sales~~ by segment and product category in the Company’s sales for the three months ended ~~October 28, 2017~~April 29, 2023 compared to the three months ended ~~October 29, 2016~~April 30, 2022 as well as the sales percentage by segment and product category to total net sales for the three months ended ~~October 28, 2017~~April 29, 2023 are as follows:

% Change
2017-2016

% of
Net Sales
Retail operations segment

Cosmetics (6.9 )% 14 %
Ladies’ apparel 2.6
24
Ladies’ accessories and lingerie 1.0
13
Juniors’ and children’s apparel 0.8
10
Men’s apparel and accessories (0.3 ) 17
Shoes (2.4 ) 16
Home and furniture (1.2 ) 3

97
Construction segment (2.8 ) 3
Total
100 %


	% Change		% of
	2023 - 2022		Net Sales
Retail operations segment
Cosmetics	5.7	%	15	%
Ladies’ apparel	(2.6)		23
Ladies’ accessories and lingerie	(10.2)		12
Juniors’ and children’s apparel	(9.7)		10
Men’s apparel and accessories	(7.3)		18
Shoes	(1.8)		15
Home and furniture	(5.3)		3
			96
Construction segment	123.6		4
Total			100	%

Net sales from the retail operations segment decreased ~~$9.5~~$65.9 million, or approximately 4%, and sales in comparable stores decreased approximately 4% during the three months ended ~~October 28, 2017~~April 29, 2023 compared to the three months ended

17

Table of Contents

April 30, 2022. Sales in ladies’ accessories and lingerie, juniors’ and children’s apparel, men’s apparel and accessories and home and furniture decreased significantly, while sales in ladies’ apparel and shoes decreased moderately. Sales in cosmetics increased significantly.

The number of sales transactions decreased by 9% for the three months ended April 29, 2023 compared to the three months ended October 29, 2016, decreasing 1% in both total and comparable stores. Sales of cosmetics decreased significantly over the third quarter last year. Sales of shoes decreased moderately, while sales of home and furniture decreased slightly. Sales of ladies' apparel increased moderately, while sales of ladies' accessories and lingerie and juniors' and children's apparel increased slightly. Sales of men's apparel and accessories remained essentially flat.

~~The number of sales transactions decreased 3% for the three months ended October 28, 2017 compared to the three months ended October 29, 2016~~April 30, 2022, while the average dollars per sales transaction increased 2%by 5%.

We recorded a return asset of $13.9 million and $14.7 million and an allowance for sales returns of ~~$5.8~~$27.8 million and ~~$5.7~~$30.3 million as of ~~October 28, 2017~~April 29, 2023 and ~~October 29, 2016,~~April 30, 2022, respectively.

During the three months ended ~~October 28, 2017,~~April 29, 2023, net sales from the construction segment ~~decreased $1.2~~increased $38.1 million, or ~~2.8%~~approximately 124%, compared to the three months ended ~~October 29, 2016~~April 30, 2022, due to ~~a decrease~~an increase in construction ~~projects.~~activity. The ~~backlog of awarded~~remaining performance obligations related to executed construction contracts ~~at October 28, 2017~~ totaled ~~$196.3~~$201.8 million ~~decreasing~~as of April 29, 2023, increasing approximately ~~17%~~7% from January 28, ~~2017~~2023 and ~~decreasing~~increasing approximately ~~30%~~110% from ~~October 29, 2016.~~April 30, 2022, respectively. We expect ~~the backlog~~these remaining performance obligations to be earned over the next nine to ~~twenty-four~~eighteen months.

Nine Months Ended
(in thousands of dollars) October 28,
2017 October 29,
2016 $ Change
Net sales:

Retail operations segment $ 4,083,223
$ 4,175,439
$ (92,216 )
Construction segment 117,018
145,857
(28,839 )
Total net sales $ 4,200,241
$ 4,321,296
$ (121,055 )

The percent change in the Company’s sales by segment and product category for the nine months ended October 28, 2017 compared to the nine months ended October 29, 2016 as well as the sales percentage by segment and product category to total net sales for the nine months ended October 28, 2017 are as follows:

% Change
2017-2016

% of
Net Sales
Retail operations segment

Cosmetics (7.4 )% 14 %
Ladies’ apparel 1.2
24
Ladies’ accessories and lingerie (2.6 ) 14
Juniors’ and children’s apparel (0.6 ) 9
Men’s apparel and accessories (2.0 ) 17
Shoes (2.8 ) 16
Home and furniture (5.2 ) 3

97
Construction segment (19.8 ) 3
Total
100 %

Net sales from the retail operations segment decreased $92.2 million during the nine months ended October 28, 2017 compared to the nine months ended October 29, 2016, decreasing 2% in both total and comparable stores. Sales of cosmetics and home and furniture decreased significantly over the prior year period. Sales of shoes, ladies' accessories and lingerie and men's apparel and accessories decreased moderately over the prior year period, while sales of juniors' and children's apparel decreased slightly. Sales of ladies' apparel increased slightly.

The number of sales transactions decreased 4% for the nine months ended October 28, 2017 compared to the nine months ended October 29, 2016 while the average dollars per sales transaction increased 2%.

During the nine months ended October 28, 2017, net sales from the construction segment decreased $28.8 million or 19.8% compared to the nine months ended October 29, 2016 due to a decrease in construction activity.

Service Charges and Other Income

Three Months Ended Nine Months Ended
Three
Months

Nine
Months
(in thousands of dollars) October 28, 2017 October 29, 2016 October 28,
2017 October 29,
2016 $ Change 2017-2016 $ Change 2017-2016
Service charges and other income:

Retail operations segment

Income from Wells Fargo Alliance and former Synchrony Alliance $ 28,181
$ 27,711
$ 73,901
$ 75,603
$ 470
$ (1,702 )
Shipping and handling income 7,268
6,309
21,919
19,366
959
2,553
Leased department income 1,307
1,659
4,280
5,111
(352 ) (831 )
Other 4,583
4,987
11,720
12,091
(404 ) (371 )
41,339
40,666
111,820
112,171
673
(351 )
Construction segment 560
220
1,442
575
340
867
Total service charges and other income $ 41,899
$ 40,886
$ 113,262
$ 112,746
$ 1,013
$ 516

~~Service charges and other income is composed primarily~~


					Three
	Three Months Ended				Months
	April 29,		April 30,		$ Change
(in thousands of dollars)	2023		2022		2023-2022
Service charges and other income:
Retail operations segment
Income from Wells Fargo Alliance	$	16,859	$	17,174	$	(315)
Shipping and handling income		9,971		10,222		(251)
Other		3,053		3,654		(601)
		29,883		31,050		(1,167)
Construction segment		76		64		12
Total service charges and other income	$	29,959	$	31,114	$	(1,155)

Gross Margin


	April 29,		April 30,
(in thousands of dollars)	2023		2022		$ Change		% Change
Gross margin:
Three months ended
Retail operations segment	$	690,389	$	748,444	$	(58,055)	(7.8)	%
Construction segment		2,298		1,787		511	28.6
Total gross margin	$	692,687	$	750,231	$	(57,544)	(7.7)	%


	Three Months Ended
	April 29,		April 30,
	2023		2022
Gross margin as a percentage of segment net sales:
Retail operations segment	45.6	%	47.3	%
Construction segment	3.3		5.8
Total gross margin as a percentage of net sales	43.7		46.5

Gross margin, as a percentage of ~~income~~sales, decreased to 43.7% from ~~the Wells Fargo Alliance. Income from the alliance increased~~46.5% during the three months ended ~~October 28, 2017 primarily due to a sales tax settlement from the former Synchrony Alliance.~~

~~During the nine months ended October 28, 2017, income from the Wells Fargo Alliance decreased compared to the nine months ended October~~April 29, ~~2016 primarily due to a decrease in finance charge income and an increase in funding costs, partially offset by the sales tax settlement from the former Synchrony Alliance.~~

~~Gross Profit~~

(in thousands of dollars) October 28, 2017 October 29, 2016 $ Change % Change
Gross profit:

Three months ended

Retail operations segment $ 463,034
$ 484,441
$ (21,407 ) (4.4 )%
Construction segment 1,810
2,303
(493 ) (21.4 )
Total gross profit $ 464,844
$ 486,744
$ (21,900 ) (4.5 )%

Nine months ended

Retail operations segment $ 1,428,025
$ 1,503,895
$ (75,870 ) (5.0 )%
Construction segment 5,001
6,598
(1,597 ) (24.2 )
Total gross profit $ 1,433,026
$ 1,510,493
$ (77,467 ) (5.1 )%

Three Months Ended Nine Months Ended
October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016
Gross profit as a percentage of segment net sales:

Retail operations segment 35.3 % 36.6 % 35.0 % 36.0 %
Construction segment 4.3
5.4
4.3
4.5
Total gross profit as a percentage of net sales 34.3
35.6
34.1
35.0

Gross profit decreased by 133 basis points of net sales and 83 basis points of net sales during the three and nine months ended October 28, 2017 compared to the three and nine months ended October 29, 2016, respectively.

~~Gross profit from retail operations decreased 137 basis points of net sales during the three months ended October 28, 2017~~2023 compared to the three months ended ~~October 29, 2016 primarily due to higher markdowns.~~ April 30, 2022, respectively.

Gross margin ~~declined~~from retail operations, as a percentage of sales, decreased to 45.6% from 47.3% during the three months ended April 29, 2023 compared to the three months ended April 30, 2022, respectively, as a result of increased markdowns and decreased markups. Gross margin decreased moderately in ~~ladies'~~men’s apparel ~~ladies'~~and accessories,

18

Table of Contents

juniors’ and children’s apparel, home and furniture and ladies’ accessories and lingerie, ~~and juniors' and children's apparel,~~ while ~~declining~~decreasing slightly in ~~home~~shoes and ~~furniture.~~ladies’ apparel. Gross margin increased slightly in ~~men's apparel and accessories, while remaining essentially flat in cosmetics and shoes.~~

~~Gross profit from retail operations declined 105 basis points~~cosmetics.

Total inventory increased 3% as of ~~net sales during the nine months ended October 28, 2017~~April 29, 2023 compared to the nine months ended October 29, 2016 primarily due to higher markdowns. Gross margin declined moderately in ladies' apparel and ladies' accessories and lingerie. Gross margin declined slightly in juniors' and children's apparel, while remaining essentially flat in cosmetics, shoes, men's apparel and accessories and home and furniture.

~~Gross profit from the construction segment decreased 103 basis points and 25 basis points of construction sales for the three and nine months ended October 28, 2017, respectively.~~

~~Inventory increased 3% in total as of October 28, 2017 compared to October 29, 2016.~~April 30, 2022. A 1% change in the dollar amount of markdowns would have impacted net income by approximately ~~$2 million and $7~~$1 million for the three ~~and nine~~ months ended ~~October 28, 2017, respectively.~~

April 29, 2023.

We source a significant portion of our private label and exclusive brand merchandise from countries that have been impacted by the COVID-19 virus. Additionally, many of our branded merchandise vendors also source a significant portion of their merchandise from these same countries. This issue negatively impacted our supply chain during fiscal 2022 and prior, resulting in shipping delays as well as increased shipping costs. Additionally, disruptions in the global transportation network, including slowdowns in our U.S. ports, caused delays in processing imported merchandise, thereby resulting in untimely deliveries of merchandise. These issues have improved and the negative impact on the Company’s operations and financial results has diminished. Management continues to monitor these issues closely.

Inflation and rising interest costs continue to be a concern for management. The extent to which our business will be affected by inflation and rising interest costs depends on our customers’ continuing ability and willingness to accept price increases.

Gross margin from construction decreased 250 basis points of segment net sales.

Selling, General and Administrative Expenses (“SG&A”)

(in thousands of dollars) October 28, 2017 October 29, 2016 $ Change % Change
SG&A:

Three months ended

Retail operations segment $ 409,211
$ 408,943
$ 268
0.1 %
Construction segment 1,953
1,620
333
20.6
Total SG&A $ 411,164
$ 410,563
$ 601
0.1 %

Nine months ended

Retail operations segment $ 1,206,354
$ 1,199,597
$ 6,757
0.6 %
Construction segment 4,960
4,454
506
11.4
Total SG&A $ 1,211,314
$ 1,204,051
$ 7,263
0.6 %

Three Months Ended Nine Months Ended
October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016
SG&A as a percentage of segment net sales:

Retail operations segment 31.2 % 30.9 % 29.5 % 28.7 %
Construction segment 4.7
3.8
4.2
3.1
Total SG&A as a percentage of net sales 30.3
30.1
28.8
27.9


	April 29,		April 30,
(in thousands of dollars)	2023		2022		$ Change		% Change
SG&A:
Three months ended
Retail operations segment	$	404,303	$	398,869	$	5,434	1.4	%
Construction segment		2,072		1,904		168	8.8
Total SG&A	$	406,375	$	400,773	$	5,602	1.4	%


	Three Months Ended
	April 29,		April 30,
	2023		2022
SG&A as a percentage of segment net sales:
Retail operations segment	26.7	%	25.2	%
Construction segment	3.0		6.2
Total SG&A as a percentage of net sales	25.7		24.9

SG&A increased ~~98 basis points~~to 25.7% of ~~net~~ sales during the ~~nine~~three months ended ~~October 28, 2017 compared to~~April 29, 2023 from 24.9% of sales during the ~~nine~~three months ended ~~October 29, 2016.~~April 30, 2022, an increase of $5.6 million. SG&A from retail operations increased ~~81 basis points~~to 26.7% of ~~net~~ sales during the nine months ended October 28, 2017 compared to the nine months ended October 29, 2016 primarily due to increases in services purchased ($6.7 million) and selling payroll ($6.6 million) partially offset by decreases in communications expense ($3.0 million) and advertising ($2.9 million).

~~Depreciation and Amortization~~

(in thousands of dollars) October 28, 2017 October 29, 2016 $ Change % Change
Depreciation and amortization:

Three months ended

Retail operations segment $ 56,878
$ 60,513
$ (3,635 ) (6.0 )%
Construction segment 162
168
(6 ) (3.6 )
Total depreciation and amortization $ 57,040
$ 60,681
$ (3,641 ) (6.0 )%

Nine months ended

Retail operations segment $ 176,422
$ 181,421
$ (4,999 ) (2.8 )%
Construction segment 497
512
(15 ) (2.9 )
Total depreciation and amortization $ 176,919
$ 181,933
$ (5,014 ) (2.8 )%

~~Depreciation and amortization expense~~ for the three ~~and nine~~ months ended ~~October 28, 2017~~April 29, 2023 from 25.2% of sales for the three months ended April 30, 2022, an increase of $5.4 million attributable to several expense categories.

19

Table of Contents

Interest and Debt Expense, Net


	April 29,		April 30,
(in thousands of dollars)	2023		2022		$ Change		% Change
Interest and debt expense (income), net:
Three months ended
Retail operations segment	$	228	$	10,569	$	(10,341)	(97.8)	%
Construction segment		(105)		(7)		(98)	1,400.0
Total interest and debt expense, net	$	123	$	10,562	$	(10,439)	(98.8)	%

Net interest and debt expense decreased $10.4 million during the three months ended April 29, 2023 compared to the three months ended ~~October 29, 2016 decreased $3.6 million and $5.0 million, respectively, due to the timing and composition of capital expenditures.~~

~~Interest and Debt Expense, Net~~

(in thousands of dollars) October 28, 2017 October 29, 2016 $ Change % Change
Interest and debt expense (income), net:

Three months ended

Retail operations segment $ 14,988
$ 15,637
$ (649 ) (4.2 )%
Construction segment (8 ) (18 ) 10
55.6
Total interest and debt expense, net $ 14,980
$ 15,619
$ (639 ) (4.1 )%

Nine months ended

Retail operations segment $ 46,508
$ 47,360
$ (852 ) (1.8 )%
Construction segment (48 ) (48 ) —
—
Total interest and debt expense, net $ 46,460
$ 47,312
$ (852 ) (1.8 )%

~~The decrease in net interest and debt expense for the three and nine months ended October 28, 2017 compared to the three and nine months ended October 29, 2016 is~~April 30, 2022, primarily due to an increase in ~~capitalized~~ interest income from increased rates on cash and ~~a decrease~~cash equivalent balances and the purchases of short-term investments in ~~credit facility expense.~~the current year that did not occur in the prior period. Total weighted average debt outstanding decreased ~~by $1.3 million and $13.3~~$44.8 million during the three ~~and nine~~ months ended ~~October 28, 2017~~April 29, 2023 compared to the three months ended April 30, 2022 primarily due to a note maturity at the end of fiscal 2022.

Interest income was $10.0 million and ~~nine~~$0.5 million for the three months ~~ending October~~ended April 29, ~~2016,~~2023 and April 30, 2022, respectively.

~~Loss~~

Other Expense


	April 29,		April 30,
(in thousands of dollars)	2023		2022		$ Change		% Change
Other expense:
Three months ended
Retail operations segment	$	4,698	$	1,936	$	2,762	142.7	%
Construction segment		—		—		—	—
Total other expense	$	4,698	$	1,936	$	2,762	142.7	%

Other expense increased $2.8 million during the three months ended April 29, 2023 compared to the three months ended April 30, 2022 due to an increase in pension expense.

Gain on ~~Early Extinguishment~~Disposal of ~~Debt~~

(in thousands of dollars) October 28, 2017 October 29, 2016 $ Change % Change
Loss on early extinguishment of debt:

Three months ended

Retail operations segment $ 797
$ —
$ 797
— %
Construction segment —
—
—
—
Total loss on early extinguishment of debt $ 797
$ —
$ 797
— %

Nine months ended

Retail operations segment $ 797
$ —
$ 797
— %
Construction segment —
—
—
—
Total loss on early extinguishment of debt $ 797
$ —
$ 797
— %

Assets


	April 29,		April 30,
(in thousands of dollars)	2023		2022			$ Change
(Gain) loss on disposal of assets:
Three months ended
Retail operations segment	$	(1,793)	$	(7,240)	$	5,447
Construction segment		—		3		(3)
Total gain on disposal of assets	$	(1,793)	$	(7,237)	$	5,444

During the three months ended October 28, 2017, we recorded charges totaling $0.8 million due to the write-off of certain deferred financing fees in connection with the amendment and extension of the Company's senior unsecured revolving credit facility.

~~Gain (Loss) on Disposal of Assets~~

(in thousands of dollars) October 28, 2017 October 29, 2016 $ Change % Change
(Gain) loss on disposal of assets:

Three months ended

Retail operations segment $ (4,813 ) $ 28
$ (4,841 ) (17,289.3 )%
Construction segment —
(5 ) 5
100.0
Total (gain) loss on disposal of assets $ (4,813 ) $ 23
$ (4,836 ) (21,026.1 )%

Nine months ended

Retail operations segment $ (4,850 ) $ (838 ) $ (4,012 ) (478.8 )%
Construction segment (5 ) (15 ) 10
66.7
Total gain on disposal of assets $ (4,855 ) $ (853 ) $ (4,002 ) (469.2 )%

~~During the three months ended October 28, 2017,~~April 29, 2023, the Company recorded ~~a gain~~proceeds of ~~$4.8~~$1.9 million primarily from the sale of aone store property, ~~and insurance recovery~~resulting in a gain of $1.8 million that was recorded in gain on ~~a previously damaged full-line store location partially offset by a loss on~~disposal of assets.

During the three months ended April 30, 2022, the Company recorded proceeds of $8.1 million primarily from the sale of ~~equipment.~~

one store property, resulting in a gain of $7.2 million that was recorded in gain on disposal of assets.

Income Taxes

The Company’s estimated federal and state effective income tax rate ~~inclusive of income on and equity in earnings of joint ventures,~~ was approximately ~~31.8%~~23.4% and ~~35.0%~~22.5% for the three months ended ~~October 28, 2017~~April 29, 2023 and ~~October 29, 2016,~~April 30, 2022, respectively. During the three months ended ~~October 28, 2017,~~April 29, 2023 and April 30, 2022, income tax expense differed from what would be computed using the statutory federal income tax rate primarily due to the ~~effect~~effects of state and local income taxes offset by tax benefits recognized for federal tax credits. During the three months ended October 29, 2016, income tax expense differed from what would be computed using the statutory federal tax rate primarily due to the effecttaxes.

20

Table of ~~state and local income taxes partially offset by tax benefits recognized for federal tax credits.~~Contents

The Company’s estimated federal and state effective income tax rate, inclusive of income on and equity in earnings of joint ventures, was approximately 34.1% and 35.2% for the nine months ended October 28, 2017 and October 29, 2016, respectively. During the nine months ended October 28, 2017, income tax expense differed from what would be computed using the statutory federal tax rate primarily due to the effect of state and local income taxes offset by tax benefits recognized for federal tax credits. During the nine months ended October 29, 2016, income tax expense differed from what would be computed using

~~the statutory federal tax rate primarily due to the effect of state and local income taxes partially offset by tax benefits recognized for federal tax credits.~~

During the three and nine months ended October 28, 2017, tax benefits recognized for federal tax credits includes tax benefits related to legislation enacted on September 29, 2017 providing an employee retention credit to employers impacted by the recent hurricanes.

The Company expects the fiscal ~~2017~~2023 federal and state effective income tax rate to approximate ~~34%~~23%. This rate may change if results of operations for fiscal ~~2017~~2023 differ from management’s current ~~expectations or if additional tax legislation is passed.~~expectations. Changes in the Company’s assumptions and judgments can materially affect amounts recognized in the condensed consolidated ~~balance sheets and statements of income.~~

financial statements.

FINANCIAL CONDITION

A summary of net cash flows for the ~~nine~~three months ended ~~October 28, 2017~~April 29, 2023 and ~~October 29, 2016~~April 30, 2022 follows:

Nine Months Ended
(in thousands of dollars) October 28, 2017 October 29, 2016 $ Change
Operating Activities $ 55,502
$ 125,905
$ (70,403 )
Investing Activities (87,602 ) (92,325 ) 4,723
Financing Activities (200,027 ) (155,967 ) (44,060 )
Total Cash Used $ (232,127 ) $ (122,387 ) $ (109,740 )


	Three Months Ended
	April 29,		April 30,
(in thousands of dollars)	2023		2022		$ Change
Operating Activities	$	280,948	$	365,182	$	(84,234)
Investing Activities		21,958		(14,784)		36,742
Financing Activities		(106,503)		(204,984)		98,481
Total Increase in Cash and Cash Equivalents and Restricted Cash	$	196,403	$	145,414	$	50,989

Net cash flows from operations decreased ~~$70.4~~$84.2 million during the ~~nine~~three months ended ~~October 28, 2017~~April 29, 2023 compared to the ~~nine~~three months ended ~~October 29, 2016.~~April 30, 2022. This ~~decrease~~reduction was primarily ~~attributable to~~due a decrease in ~~gross profit~~net income and changes in working capital items, ~~primarily increases~~notably changes in ~~inventory.~~

trade accounts payable and accrued expenses and other liabilities.

Wells Fargo ~~Bank, N.A. ("Wells Fargo")~~ owns and manages the Dillard’s private label ~~credit~~ cards under the Wells Fargo Alliance. Under the Wells Fargo Alliance, Wells Fargo establishes and owns private label card accounts for our customers, retains the benefits and risks associated with the ownership of the accounts, provides key customer service functions, including new account openings, transaction authorization, billing adjustments and customer inquiries, receives the finance charge income and incurs the bad debts associated with those accounts.

Pursuant to the Wells Fargo Alliance, we receive on-going cash compensation from Wells Fargo based upon the portfolio's earnings. The compensation earned on the portfolio is determined monthly and has no recourse provisions. The amount the Company receives is dependent on the level of sales on Wells Fargo accounts, the level of balances carried on Wells Fargo accounts by Wells Fargo customers, payment rates on Wells Fargo accounts, finance charge rates and other fees on Wells Fargo accounts, the level of credit losses for the Wells Fargo accounts as well as Wells Fargo's ability to extend credit to our customers. We participate in the marketing of the private label cards, which includes the cost of customer reward programs. We accept payments on the private label cards in our stores as a convenience to customers who prefer to pay in person rather than by paying online or mailing their payments to Wells Fargo. The Wells Fargo Alliance expires in fiscal 2024.

The Company ~~received~~recognized income of ~~approximately $71~~$16.9 million and ~~$75~~$17.2 million from the Wells Fargo Alliance during the ~~nine~~three months ended ~~October 28, 2017~~April 29, 2023 and ~~October~~April 30, 2022, respectively.

Capital expenditures were $32.3 million and $27.3 million for the three months ended April 29, ~~2016,~~2023 and April 30, 2022, respectively.

The capital expenditures were primarily related to equipment purchases, the continued construction of new stores and the remodeling of existing stores. During the ~~nine~~three months ended ~~October 28, 2017,~~April 29, 2023, the Company opened a 100,000 square foot expansion at Gateway Mall in Lincoln, Nebraska. During the three months ended April 30, 2022, the Company opened a new store at University Place in Orem, Utah (160,000 square feet).

During the three months ended April 29, 2023, the Company received cash proceeds of ~~$11.7~~$1.9 million ~~for~~and recorded a related gain of $1.8 million, primarily from the sale of an 85,000 square foot location at Sunland Park Mall in El Paso, Texas. The Company also closed (1) an owned ~~locations~~location at Santa Rosa Mall in ~~Ohio~~Mary Esther, Florida (115,000 square feet) ~~and Texas (70,000~~, (2) a leased location at Conestoga Mall in Grand Island, Nebraska (80,000 square feet) and the sale of equipment resulting in a net loss of $1.0 million. Additionally, the Company received insurance proceeds of $4.9 million from the recovery of a previously damaged full-line store location. The Company recorded a gain of $5.9 million as a result of the final insurance settlement for the damaged store.

Capital expenditures were $106.3 million and $73.4 million for the nine months ended October 28, 2017 and October 29, 2016, respectively. Capital expenditures for fiscal 2017 are expected to be approximately $125 million compared to actual expenditures of $105 million during fiscal 2016. During the nine months ended October 28, 2017, the Company: (a) opened a store in The Mall at Greenhills in Nashville, Tennessee (180,000 square feet), replacing(3) an owned ~~location (180,000~~clearance center at Metrocenter in Phoenix, Arizona (90,000 square feet) ~~at that center, (b) purchased and opened a~~. There were no material costs associated or expected with any of these store ~~at Temple Mall in Temple, Texas (109,000 square feet), replacing a leased location (91,000 square feet) at that center, and (c) purchased a store at Layton Hills Mall in Layton, Utah (160,000 square~~

~~feet), which opened in November.~~closures. We remain committed to closing under-performing stores where appropriate and may incur future closing costs related to such stores when they close.

During the three months ended April 30, 2022, the Company received cash proceeds of $8.1 million and recorded a related gain of $7.2 million, primarily from the sale of one store property.

During the three months ended April 30, 2022, the Company received life insurance proceeds of $4.4 million related to one policy.

During the three months ended April 29, 2023, the Company purchased certain treasury bills for $97.5 million that are classified as short-term investments and received proceeds of $150.0 million related to short-term investment maturities.

The Company had cash ~~on hand~~and cash equivalents and restricted cash of ~~$114.9~~$856.7 million as of ~~October 28, 2017. In August 2017, the~~April 29, 2023. The Company ~~amended and extended its senior unsecured revolving~~maintains a credit facility ~~(the "new~~ (“credit ~~agreement"~~agreement”) replacing the Company's previous credit agreement. The new credit agreement provides borrowing capacity of $800 million with a $200 million expansion option and matures on August 9, 2022. As part of our overall liquidity management strategy, the credit facility is available for general corporate purposes including, among other uses, working capital financing, the issuance of letters of credit, capital expenditures and, subject to certain restrictions, the repayment of existing indebtedness and share repurchases. The ~~rate~~credit agreement is secured by certain deposit accounts of ~~interest on borrowings is LIBOR plus 1.375%,~~the Company and ~~the commitment fee for unused borrowings is 0.20% per annum. To be~~certain inventory of certain subsidiaries and provides a borrowing capacity of $800 million, subject

21

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to certain limitations as outlined in ~~compliance with the financial covenants of~~ the credit agreement, ~~the Company's total leverage ratio cannot exceed 3.5 to 1.0, and the Company's coverage ratio cannot be less than 2.5 to 1.0, as defined~~with a $200 million expansion option. See Note 7, Revolving Credit Agreement, in the ~~credit agreement.~~“Notes to Condensed Consolidated Financial Statements,” in Part I, Item 1 hereof for additional information. At ~~October 28, 2017, the Company was in compliance with all financial covenants related to the credit agreement.~~

~~At October 28, 2017,~~April 29, 2023, no borrowings were outstanding, and letters of credit totaling ~~$26.6~~$19.3 million were issued under the credit agreement leaving unutilized availability ~~under the facility~~ of ~~approximately $773~~$780.7 million.

During the ~~nine~~three months ended ~~October 28, 2017,~~April 29, 2023, the Company repurchased ~~3.5~~0.4 million shares of Class A Common Stock at an average price of ~~$52.48~~$318.66 per share for ~~$184.4 million. Additionally,~~$113.8 million (including the accrual of $10.7 million of share repurchases that had not settled as of April 29, 2023) under its stock repurchase plans. During the three months ended April 30, 2022, the Company repurchased 0.7 million shares of Class A Common Stock at an average price of $253.72 per share for $186.5 million (including the accrual of $1.6 million of share repurchases that had not settled as of April 30, 2022) under its stock repurchase plans, and the Company paid ~~$6.0~~$16.2 million for share repurchases that had not yet settled but were accrued at January ~~28, 2017. During the nine months ended October~~ 29, ~~2016, the Company repurchased 2.5 million shares~~2022. As of ~~Class A Common Stock at an average price of $67.13 per share for $165.6 million. At October 28, 2017, $69.5~~April 29, 2023, $61.6 million of authorization remained under the ~~Company's~~Company’s open stock repurchase plan. The ultimate disposition of the repurchased stock has not been determined.

~~During fiscal 2017,~~ See Note 8, Stock Repurchase Programs, in the “Notes to Condensed Consolidated Financial Statements,” in Part I, Item 1 hereof for additional information.

Subsequent to the end of the quarter ended April 29, 2023, the Company completed the remaining authorized purchases under its previous stock repurchase program, and in May 2023, the Company’s Board of Directors approved a new stock repurchase program authorizing the Company to repurchase up to $500 million of its Class A Common Stock under an open-ended plan.

On August 16, 2022, the Inflation Reduction Act of 2022 ("the Act") was signed into law. Under the Act, the Company’s share repurchases after December 31, 2022 are subject to a 1% excise tax. At April 29, 2023, the Company had accrued $1.1 million of excise tax related to its share repurchase program as an additional cost of treasury shares.

The Company expects to finance its ~~capital expenditures, working capital requirements and stock repurchases~~operations during fiscal 2023 from cash on hand, cash flows generated from operations and, if necessary, utilization of the credit facility. Depending ~~on conditions in the capital markets~~upon our actual and ~~other factors,~~anticipated sources and uses of liquidity, the Company ~~may~~will from time to time consider other possible financing transactions, the proceeds of which could be used to ~~refinance current indebtedness~~fund working capital or for other corporate purposes.

There have been no material changes in the information set forth under caption ~~“Contractual Obligations and Commercial~~“Commercial Commitments” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, ~~2017.~~

2023.

OFF-BALANCE-SHEET ARRANGEMENTS

The Company has not created, and is not party to, any special-purpose entities or off-balance-sheet arrangements for the purpose of raising capital, incurring debt or operating the Company’s business. The Company does not have any off-balance-sheet arrangements or relationships that are reasonably likely to materially affect the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or the availability of capital resources.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about future events that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company evaluates its estimates and judgments on an ongoing basis and predicates those estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. Since future events and their effects cannot be determined with absolute certainty, actual results could differ from those estimates. For further information on our critical accounting policies and estimates, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the notes to our audited financial statements included in our Annual Report on Form 10-K for the year ended January 28, 2023. As of April 29, 2023, there have been no material changes to these critical accounting policies and estimates.

22

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NEW ACCOUNTING STANDARDS

For information with respect to new accounting pronouncements and the impact of these pronouncements on our condensed consolidated financial statements, see Note ~~13,~~ ~~Recently Issued~~ 2, Accounting Standards, in the ~~"Notes~~“Notes to Condensed Consolidated Financial Statements,"” in Part I, Item I1 hereof.

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FORWARD-LOOKING INFORMATION

This report contains certain forward-looking statements. The following are or may constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995: (a) statements including words such as “may,” “will,” “could,” ~~"hope,"~~ “should,” “believe,” “expect,” “future,” “potential,” “anticipate,” “intend,” “plan,” “estimate,” “continue,” or the negative or other variations thereof; (b) statements regarding matters that are not historical facts; and (c) statements about the Company’s future occurrences, plans and objectives, including statements regarding management’s expectations and forecasts for the remainder of fiscal ~~2017~~2023 and beyond, statements concerning the opening of new stores or the closing of existing stores, statements concerning capital expenditures and sources of liquidity, statements regarding the expected impact of the COVID-19 pandemic and related government responses, statements concerning share repurchases, statements concerning pension contributions, statements regarding the expected phase out of LIBOR, statements regarding the impacts of inflation and rising interest rates in fiscal 2023 and statements concerning estimated taxes. The Company cautions that forward-looking statements contained in this report are based on estimates, projections, beliefs and assumptions of management and information available to management at the time of such statements and are not guarantees of future performance. The Company disclaims any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information or otherwise. Forward-looking statements of the Company involve risks and uncertainties and are subject to change based on various important factors. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements made by the Company and its management as a result of a number of risks, uncertainties and assumptions. Representative examples of those factors include (without limitation) general retail industry conditions and macro-economic ~~conditions;~~conditions including inflation, rising interest rates, bank failures, failure of the U.S. government to timely raise the debt ceiling, economic recession and changes in traffic at malls and shopping centers; economic and weather conditions for regions in which the ~~Company's~~Company’s stores are located and the effect of these factors on the buying patterns of the ~~Company's~~Company’s customers, including the effect of changes in prices and availability of oil and natural gas; the availability of and interest rates on consumer credit; the impact of competitive pressures in the department store industry and other retail channels including specialty, off-price, discount and Internet retailers; changes in the Company’s ability to meet labor needs amid nationwide labor shortages and an intense competition for talent; changes in consumer ~~confidence,~~ spending patterns, debt levels and their ability to meet credit obligations; high levels of unemployment; changes in tax ~~legislation;~~legislation (including the Inflation Reduction Act of 2022); changes in legislation and governmental regulations affecting such matters as the cost of employee benefits or credit card ~~income;~~income, such as the Consumer Financial Protection Bureau’s recent proposal to amend Regulation Z to limit the dollar amounts credit card companies can charge for late fees, adequate and stable availability and pricing of materials, production facilities and labor from which the Company sources its ~~merchandise at acceptable pricing;~~merchandise; changes in operating expenses, including employee wages, commission structures and related benefits; system failures or data security breaches; possible future acquisitions of store properties from other department store operators; the continued availability of financing in amounts and at the terms necessary to support the ~~Company's~~Company’s future business; fluctuations in LIBOR and other base borrowing rates; the elimination of LIBOR; potential disruption from terrorist activity and the effect on ongoing consumer confidence; COVID-19 and other epidemic, pandemic or ~~other~~ public health ~~issues;~~issues and their effects on public health, our supply chain, the health and well-being of our employees and customers and the retail industry in general; potential disruption of international trade and supply chain efficiencies; ~~world~~global conflicts (including the recent conflict in Ukraine) and the possible impact on consumer spending patterns and other economic and demographic changes of similar or dissimilar ~~nature. The Company's filings~~nature, and other risks and uncertainties, including those detailed from time to time in our periodic reports filed with the ~~Securities and Exchange Commission, including its~~SEC, particularly those set forth under the caption “Item 1A, Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, ~~2017, contain other information on factors that may affect financial results or cause actual results to differ materially from forward-looking statements.~~

2023.

Item 3. Quantitative and Qualitative Disclosures About Market ~~Risk~~

Risk.

There have been no material changes in the information set forth under caption “Item 7A-Quantitative and Qualitative Disclosures ~~About~~about Market Risk” in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, ~~2017.~~2023.

24

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Item 4. Controls and ~~Procedures~~

Procedures.

The Company has established and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). The Company’s management, with the participation of our Principal Executive Officer and Co-Principal Financial Officers, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the fiscal quarter covered by this quarterly report, and based on that evaluation, the Company’s Principal Executive Officer and Co-Principal Financial Officers have concluded that these disclosure controls and procedures were effective.

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended ~~October 28, 2017~~April 29, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

25

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PART II. OTHER INFORMATION

Item 1. Legal ~~Proceedings~~

Proceedings.

From time to time, the Company is involved in litigation relating to claims arising out of the Company’s operations in the normal course of business. This may include litigation with customers, employment related lawsuits, class action lawsuits, purported class action lawsuits and actions brought by governmental authorities. As of ~~November 30, 2017,~~June 2, 2023, the Company is not a party to any legal proceedings that, individually or in the aggregate, are reasonably expected to have a material adverse effect on the Company’s business, results of operations, financial condition or cash flows.

Item 1A. Risk ~~Factors~~

Factors.

There have been no material changes in the information set forth under caption “Item 1A-Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, ~~2017.~~

I~~tem~~ 2023.

Item 2. Unregistered Sales of Equity Securities and Use of ~~Proceeds~~Proceeds.

(c)	Purchases of Equity Securities

~~(c)~~

Issuer Purchases of Equity Securities

Issuer Purchases of Equity Securities
Period (a) Total Number of Shares Purchased
(b) Average Price Paid per Share
(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
July 30, 2017 through August 26, 2017 70,905
$ 56.42
70,905
$ 89,185,315
August 27, 2017 through September 30, 2017 168,293
57.79
168,293
79,459,124
October 1, 2017 through October 28, 2017 189,482
52.77
189,482
69,459,732
Total 428,680
$ 55.35
428,680
$ 69,459,732



				(c) Total Number of Shares	(d) Approximate Dollar Value of
				Purchased as Part	Shares that May
	(a) Total Number			of Publicly	Yet Be Purchased
	of Shares	(b) Average Price		Announced Plans	Under the Plans
Period	Purchased	Paid per Share		or Programs	or Programs
January 29, 2023 through February 25, 2023	75,001	$	346.77	75,001	$	149,394,213
February 26, 2023 through April 1, 2023	106,486		331.82	106,486		114,059,786
April 2, 2023 through April 29, 2023	175,667		298.68	175,667		61,592,000
Total	357,154	$	318.66	357,154	$	61,592,000

In February ~~2016,~~2022, the Company’s Board of Directors ~~authorized~~approved a stock repurchase program authorizing the Company to repurchase of up to $500 million of its Class A Common Stock (“February 2022 Stock Plan”). During the three months ended April 29, 2023, the Company repurchased 0.4 million shares totaling $113.8 million under its stock repurchase plan. As of April 29, 2023, $61.6 million of authorization remained under the February 2022 Stock Plan.

Subsequent to the end of the quarter ended April 29, 2023, the Company completed the remaining authorized purchases under the February 2022 Stock Plan, and in May 2023, the Company’s Board of Directors approved a new stock repurchase program authorizing the Company to repurchase up to $500 million of its Class A Common Stock under an open-ended ~~stock repurchase plan. This repurchase~~ plan (“May 2023 Stock Plan”). The May 2023 Stock Plan permits the Company to repurchase its Class A Common Stock in the open market, pursuant to preset trading plans meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, or through privately negotiated transactions. ~~The repurchase plan has no expiration date.~~

~~During the three months ended October 28, 2017, the Company repurchased 0.4 million shares totaling $23.7 million.~~

Reference is made to the discussion in Note 7, 8, Stock Repurchase ~~Program~~Programs, in the “Notes to Condensed Consolidated Financial Statements” in Part I, Item 1 of this Quarterly Report on Form 10-Q, which information is incorporated by reference herein.

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Item 6. ~~Exhibits~~

Exhibits.

Number		Description

~~Number~~ 31.1		~~Description~~

10*		Amendment No. 1 to Five-Year Credit Agreement between Dillard's, Inc., Dillard Store Services, Inc. and JPMorgan Chase Bank, N.A. as agent for a syndicate of lenders (Exhibit 10.1 to Form 8-K dated as of August 10, 2017, File No. 1-6140).

~~31.1~~		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Co-Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.3		Certification of Co-Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

32.2		Certification of Co-Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

32.3		Certification of Co-Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

101.INS		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

27

* Incorporated by reference as indicated.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the ~~Registrant~~registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		DILLARD’S, INC.
		(Registrant)
		~~DILLARD’S, INC.~~
		~~(Registrant)~~
Date:	June 2, 2023

~~Date:~~	~~November 30, 2017~~	/s/ Phillip R. Watts
		Phillip R. Watts
		Senior Vice President, Co-Principal Financial Officer and Principal Accounting Officer

		/s/ Chris B. Johnson
		Chris B. Johnson
		Senior Vice President and Co-Principal Financial Officer

28



DELAWARE		71-0388071
(State or other jurisdiction		~~(I.R.S. Employer~~
of incorporation or organization)		(I.R.S. Employer Identification No.)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock	DDS	New York Stock Exchange



Large accelerated filerx	☒	Accelerated filer¨	☐
Non-accelerated filer ¨ ~~(Do not check if a smaller reporting company)~~	☐
Smaller reporting company¨	☐	Emerging growth company¨	☐


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		Page
		Number
			~~Page~~
		~~Number~~
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited):

	Condensed Consolidated Balance Sheets as of ~~October 28, 2017,~~April 29, 2023, January 28, ~~2017~~2023 and ~~October 29, 2016~~ April 30, 2022	3

	Condensed Consolidated Statements of Income ~~and Retained Earnings~~ for the Three ~~and Nine~~ Months Ended ~~October 28, 2017~~April 29, 2023 and ~~October 29, 2016~~April 30, 2022	4

	Condensed Consolidated Statements of Comprehensive Income for the Three ~~and Nine~~ Months Ended ~~October 28, 2017~~April 29, 2023 and ~~October 29, 2016~~April 30, 2022	5

	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended April 29, 2023 and April 30, 2022	6

	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~October 28, 2017~~April 29, 2023 and ~~October 29, 2016~~April 30, 2022	6 7

	Notes to Condensed Consolidated Financial Statements	7 8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13 14

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24

Item 4.	Controls and Procedures	24 25

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	25 26

Item 1A.	Risk Factors	25 26

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26

Item 6.	Exhibits	27

SIGNATURES		28



	October 28, 2017			January 28, 2017			October 29, 2016
Assets
Current assets:
Cash and cash equivalents	$	114,858		$	346,985		$	80,482
Accounts receivable	34,951			48,230			42,467
Merchandise inventories	1,957,258			1,406,403			1,901,991
Federal and state income taxes	10,777			—			4,284
Other current assets	52,926			36,303			61,243

Total current assets	2,170,770			1,837,921			2,090,467

Property and equipment (net of accumulated depreciation and amortization of $2,624,883, $2,478,490 and $2,553,315, respectively)	1,711,863			1,790,267			1,825,225
Other assets	252,701			259,948			268,536

Total assets	$	4,135,334		$	3,888,136		$	4,184,228

Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable and accrued expenses	$	1,277,658		$	839,305		$	1,123,087
Current portion of long-term debt	248,097			87,201			—
Current portion of capital lease obligations	1,082			3,281			3,258
Other short-term borrowings	—			—			17,000
Federal and state income taxes	—			46,730			—

Total current liabilities	1,526,837			976,517			1,143,345

Long-term debt	365,394			526,106			613,245
Capital lease obligations	3,167			3,988			4,249
Other liabilities	238,943			238,424			243,296
Deferred income taxes	210,346			225,684			243,888
Subordinated debentures	200,000			200,000			200,000
Commitments and contingencies
Stockholders’ equity:
Common stock	1,238			1,238			1,238
Additional paid-in capital	944,401			943,467			941,709
Accumulated other comprehensive loss	(11,137		)	(11,137		)	(16,559		)
Retained earnings	4,210,507			4,153,844			4,099,256
Less treasury stock, at cost	(3,554,362		)	(3,369,995		)	(3,289,439		)

Total stockholders’ equity	1,590,647			1,717,417			1,736,205


Total liabilities and stockholders’ equity	$	4,135,334		$	3,888,136		$	4,184,228



	Three Months Ended						Nine Months Ended
	October 28, 2017			October 29, 2016			October 28, 2017			October 29, 2016
Net sales	$	1,354,920		$	1,365,609		$	4,200,241		$	4,321,296
Service charges and other income	41,899			40,886			113,262			112,746

	1,396,819			1,406,495			4,313,503			4,434,042

Cost of sales	890,076			878,865			2,767,215			2,810,803
Selling, general and administrative expenses	411,164			410,563			1,211,314			1,204,051
Depreciation and amortization	57,040			60,681			176,919			181,933
Rentals	6,263			5,668			18,921			17,538
Interest and debt expense, net	14,980			15,619			46,460			47,312
Loss on early extinguishment of debt	797			—			797			—
(Gain) loss on disposal of assets	(4,813		)	23			(4,855		)	(853		)

Income before income taxes and income on and equity in earnings of joint ventures	21,312			35,076			96,732			173,258
Income taxes	6,785			12,290			33,005			60,980
Income on and equity in earnings of joint ventures	12			12			34			34

Net income	14,539			22,798			63,761			112,312

Retained earnings at beginning of period	4,198,855			4,078,824			4,153,844			3,994,211
Cash dividends declared	(2,887		)	(2,366		)	(7,098		)	(7,267		)

Retained earnings at end of period	$	4,210,507		$	4,099,256		$	4,210,507		$	4,099,256

Earnings per share:
Basic and diluted	$	0.50		$	0.67		$	2.14		$	3.24

Cash dividends declared per common share	$	0.10		$	0.07		$	0.24		$	0.21



(in thousands of dollars)	Retail Operations		Construction			Consolidated
Three Months Ended October 28, 2017:
Net sales from external customers	$	1,313,150	$	41,770		$	1,354,920
Gross profit	463,034		1,810			464,844
Depreciation and amortization	56,878		162			57,040
Interest and debt expense (income), net	14,988		(8		)	14,980
Income before income taxes and income on and equity in earnings of joint ventures	21,073		239			21,312
Income on and equity in earnings of joint ventures	12		—			12
Total assets	4,097,385		37,949			4,135,334

Three Months Ended October 29, 2016:
Net sales from external customers	$	1,322,641	$	42,968		$	1,365,609
Gross profit	484,441		2,303			486,744
Depreciation and amortization	60,513		168			60,681
Interest and debt expense (income), net	15,637		(18		)	15,619
Income before income taxes and income on and equity in earnings of joint ventures	34,333		743			35,076
Income on and equity in earnings of joint ventures	12		—			12
Total assets	4,130,023		54,205			4,184,228

Nine Months Ended October 28, 2017:
Net sales from external customers	$	4,083,223	$	117,018		$	4,200,241
Gross profit	1,428,025		5,001			1,433,026
Depreciation and amortization	176,422		497			176,919
Interest and debt expense (income), net	46,508		(48		)	46,460
Income before income taxes and income on and equity in earnings of joint ventures	95,750		982			96,732
Income on and equity in earnings of joint ventures	34		—			34
Total assets	4,097,385		37,949			4,135,334

Nine Months Ended October 29, 2016:
Net sales from external customers	$	4,175,439	$	145,857		$	4,321,296
Gross profit	1,503,895		6,598			1,510,493
Depreciation and amortization	181,421		512			181,933
Interest and debt expense (income), net	47,360		(48		)	47,312
Income before income taxes and income on and equity in earnings of joint ventures	171,032		2,226			173,258
Income on and equity in earnings of joint ventures	34		—			34
Total assets	4,130,023		54,205			4,184,228



	Amount Reclassified from AOCL
	Three Months Ended				Nine Months Ended				Affected Line Item in the Statement Where Net Income Is Presented
Details about AOCL Components	October 28, 2017		October 29, 2016		October 28, 2017		October 29, 2016
Defined benefit pension plan items
Amortization of actuarial losses	$	—	$	301	$	—	$	903	Total before tax (1)
	—		114		—		344		Income tax expense
	$	—	$	187	$	—	$	559	Total net of tax



	% Change 2017-2016		% of Net Sales
Retail operations segment
Cosmetics	(6.9	)%	14	%
Ladies’ apparel	2.6		24
Ladies’ accessories and lingerie	1.0		13
Juniors’ and children’s apparel	0.8		10
Men’s apparel and accessories	(0.3	)	17
Shoes	(2.4	)	16
Home and furniture	(1.2	)	3
			97
Construction segment	(2.8	)	3
Total			100	%



	Three Months Ended				Nine Months Ended				Three Months			Nine Months
(in thousands of dollars)	October 28, 2017		October 29, 2016		October 28, 2017		October 29, 2016		$ Change 2017-2016			$ Change 2017-2016
Service charges and other income:
Retail operations segment
Income from Wells Fargo Alliance and former Synchrony Alliance	$	28,181	$	27,711	$	73,901	$	75,603	$	470		$	(1,702	)
Shipping and handling income	7,268		6,309		21,919		19,366		959			2,553
Leased department income	1,307		1,659		4,280		5,111		(352		)	(831		)
Other	4,583		4,987		11,720		12,091		(404		)	(371		)
	41,339		40,666		111,820		112,171		673			(351		)
Construction segment	560		220		1,442		575		340			867
Total service charges and other income	$	41,899	$	40,886	$	113,262	$	112,746	$	1,013		$	516



Issuer Purchases of Equity Securities
Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
July 30, 2017 through August 26, 2017	70,905	$	56.42	70,905	$	89,185,315
August 27, 2017 through September 30, 2017	168,293	57.79		168,293	79,459,124
October 1, 2017 through October 28, 2017	189,482	52.77		189,482	69,459,732
Total	428,680	$	55.35	428,680	$	69,459,732