UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~August 1,~~October 31, 2020

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

For the transition period from to .

Commission File Number: 1-6140

DILLARD’S, INC.

(Exact name of registrant as specified in its charter)


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

1600 CANTRELL ROAD, LITTLE ROCK, ARKANSAS 72201

(Address of principal executive offices)

(Zip Code)

(501) 376-5200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

ý Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

ý Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ý No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

CLASS A COMMON STOCK as of ~~August 29,~~November 28, 2020 ~~18,366,790~~17,987,659

CLASS B COMMON STOCK as of ~~August 29,~~November 28, 2020 ~~4,010,401~~4,010,233

Table of Contents

Index

DILLARD’S, INC.


		Page
		Number
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited):

	Condensed Consolidated Balance Sheets as of ~~August 1,~~October 31, 2020, February 1, 2020 and ~~August 3,~~November 2, 2019	4

	Condensed Consolidated Statements of Operations for the Three and Nine ~~and Six~~ Months Ended ~~August 1~~October 31 , 2020 and ~~August 3~~November 2 , 2019	5

	Condensed Consolidated Statements of Comprehensive Income (Loss) ~~Income~~ for the Three and ~~Six~~ Nine Months Ended ~~August 1~~,October 31, 2020 and ~~August 3~~,November 2, 2019	6

	Condensed Consolidated Statements of Stockholders' Equity for the Three and ~~and Six~~Nine Months Ended ~~August~~ 1October 31 , 2020 and ~~August 3~~November 2 , 2019	7

	Condensed Consolidated Statements of Cash Flows for the ~~Six~~ Nine M ~~onths~~ Months Ended ~~Aug~~October 31,~~ust 1~~, 2020 and ~~August 3~~November 2 , 2019	9

	Notes to Condensed Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	31

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	3233

Item 1A.	Risk Factors	3233

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3435

Item 6.	Exhibits	3536

SIGNATURES			3637

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Table of Contents

DILLARD’S, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In Thousands)


		August 1, 2020		February 1, 2020		August 3, 2019			October 31, 2020		February 1, 2020		November 2, 2019

Assets	Assets							Assets
Current assets:	Current assets:							Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	82,868	$	277,077	$	118,108	Cash and cash equivalents	$	61,124	$	277,077	$	79,065
Restricted cash	Restricted cash	0		0		17,150		Restricted cash	0		0		8,467
Accounts receivable	Accounts receivable	28,631		46,160		51,946		Accounts receivable	28,406		46,160		48,241
Merchandise inventories	Merchandise inventories	1,283,141		1,465,007		1,603,031		Merchandise inventories	1,545,264		1,465,007		1,969,980
Federal and state income taxes	Federal and state income taxes	85,658		0		0		Federal and state income taxes	126,973		0		0
Other current assets	Other current assets	65,758		59,838		77,646		Other current assets	65,631		59,838		74,231

Total current assets	Total current assets	1,546,056		1,848,082		1,867,881		Total current assets	1,827,398		1,848,082		2,179,984

Property and equipment (net of accumulated depreciation and amortization of $2,434,355, $2,336,728 and $2,305,588 respectively)		1,394,237		1,458,176		1,512,256
Property and equipment (net of accumulated depreciation and amortization of $2,471,565, $2,336,728 and $2,358,469, respectively)								Property and equipment (net of accumulated depreciation and amortization of $2,471,565, $2,336,728 and $2,358,469, respectively)	1,348,799		1,458,176		1,494,454
Operating lease assets	Operating lease assets	44,091		47,924		52,608		Operating lease assets	40,471		47,924		48,600
Deferred income taxes	Deferred income taxes	23,289		0		0		Deferred income taxes	14,740		0		0
Other assets	Other assets	75,563		76,075		79,334		Other assets	74,581		76,075		77,025

Total assets	Total assets	$	3,083,236	$	3,430,257	$	3,512,079	Total assets	$	3,305,989	$	3,430,257	$	3,800,063

Liabilities and stockholders’ equity	Liabilities and stockholders’ equity							Liabilities and stockholders’ equity
Current liabilities:	Current liabilities:							Current liabilities:
Trade accounts payable and accrued expenses	Trade accounts payable and accrued expenses	$	586,865	$	892,789	$	867,534	Trade accounts payable and accrued expenses	$	1,031,806	$	892,789	$	1,211,446

Current portion of finance lease liabilities	Current portion of finance lease liabilities	986		1,219		1,082		Current portion of finance lease liabilities	849		1,219		1,148
Current portion of operating lease liabilities	Current portion of operating lease liabilities	13,758		14,654		15,701		Current portion of operating lease liabilities	12,775		14,654		15,250
Other short-term borrowings	Other short-term borrowings	229,600		0		117,900		Other short-term borrowings	15,000		0		98,600
Federal and state income taxes	Federal and state income taxes	0		22,158		4,015		Federal and state income taxes	0		22,158		4,505

Total current liabilities	Total current liabilities	831,209		930,820		1,006,232		Total current liabilities	1,060,430		930,820		1,330,949

Long-term debt	Long-term debt	365,779		365,709		365,639		Long-term debt	365,814		365,709		365,674
Finance lease liabilities	Finance lease liabilities	356		695		1,342		Finance lease liabilities	180		695		1,029
Operating lease liabilities	Operating lease liabilities	30,051		32,683		36,407		Operating lease liabilities	27,412		32,683		32,958
Other liabilities	Other liabilities	284,527		273,601		242,281		Other liabilities	271,324		273,601		243,258
Deferred income taxes	Deferred income taxes	0		3,490		14,334		Deferred income taxes	0		3,490		13,812
Subordinated debentures	Subordinated debentures	200,000		200,000		200,000		Subordinated debentures	200,000		200,000		200,000
Commitments and contingencies	Commitments and contingencies							Commitments and contingencies
Stockholders’ equity:	Stockholders’ equity:							Stockholders’ equity:
Common stock	Common stock	1,240		1,239		1,239		Common stock	1,240		1,239		1,239
Additional paid-in capital	Additional paid-in capital	952,522		951,726		949,846		Additional paid-in capital	952,522		951,726		949,846
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(30,198)		(31,059)		(12,809)		Accumulated other comprehensive loss	(29,768)		(31,059)		(12,809)
Retained earnings	Retained earnings	4,378,988		4,556,494		4,490,759		Retained earnings	4,407,532		4,556,494		4,492,511
Less treasury stock, at cost	Less treasury stock, at cost	(3,931,238)		(3,855,141)		(3,783,191)		Less treasury stock, at cost	(3,950,697)		(3,855,141)		(3,818,404)

Total stockholders’ equity	Total stockholders’ equity	1,371,314		1,623,259		1,645,844		Total stockholders’ equity	1,380,829		1,623,259		1,612,383

Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	3,083,236	$	3,430,257	$	3,512,079	Total liabilities and stockholders’ equity	$	3,305,989	$	3,430,257	$	3,800,063

See notes to condensed consolidated financial statements.

Table of Contents

DILLARD’S, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In Thousands, Except Per Share Data)


		Three Months Ended						Six Months Ended							Three Months Ended				Nine Months Ended
		August 1, 2020		August 3, 2019		August 1, 2020		August 3, 2019			October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019

Net sales	Net sales	$	919,044	$	1,426,863	$	1,705,699	$	2,892,304	Net sales	$	1,024,899	$	1,388,310	$	2,730,598	$	4,280,614
Service charges and other income	Service charges and other income	26,139		31,982		61,060		64,476		Service charges and other income	27,213		35,349		88,273		99,825

		945,183		1,458,845		1,766,759		2,956,780			1,052,112		1,423,659		2,818,871		4,380,439

Cost of sales	Cost of sales	639,847		1,032,014		1,328,316		1,959,781		Cost of sales	658,684		926,782		1,987,000		2,886,563
Selling, general and administrative expenses	Selling, general and administrative expenses	267,062		409,125		557,508		814,285		Selling, general and administrative expenses	318,218		418,149		875,726		1,232,434
Depreciation and amortization	Depreciation and amortization	50,951		54,383		101,852		106,747		Depreciation and amortization	53,377		56,143		155,229		162,890
Rentals	Rentals	5,639		6,209		11,189		12,327		Rentals	5,115		5,927		16,304		18,254
Interest and debt expense, net	Interest and debt expense, net	12,873		12,248		25,143		23,485		Interest and debt expense, net	12,162		11,536		37,305		35,021
Other expense	Other expense	2,104		1,917		4,208		3,834		Other expense	2,105		1,916		6,313		5,750
Loss (gain) on disposal of assets	Loss (gain) on disposal of assets	33		(4,900)		14		(12,300)		Loss (gain) on disposal of assets	2,221		304		2,235		(11,996)

(Loss) income before income taxes		(33,326)		(52,151)		(261,471)		48,621
Income (loss) before income taxes										Income (loss) before income taxes	230		2,902		(261,241)		51,523
Income taxes (benefit)	Income taxes (benefit)	(24,760)		(11,480)		(90,930)		10,690		Income taxes (benefit)	(31,620)		(2,560)		(122,550)		8,130

Net (loss) income		$	(8,566)	$	(40,671)	$	(170,541)	$	37,931
Net income (loss)										Net income (loss)	$	31,850	$	5,462	$	(138,691)	$	43,393

(Loss) earnings per share:
Earnings (loss) per share:										Earnings (loss) per share:
Basic and diluted	Basic and diluted	$	(0.37)	$	(1.59)	$	(7.33)	$	1.46	Basic and diluted	$	1.43	$	0.22	$	(6.05)	$	1.69

See notes to condensed consolidated financial statements.

Table of Contents

DILLARD’S, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) ~~INCOME~~

(Unaudited)

(In Thousands)

Three Months Ended Six Months Ended
August 1,
2020 August 3,
2019 August 1,
2020 August 3,
2019
Net (loss) income $ (8,566) $ (40,671) $ (170,541) $ 37,931
Other comprehensive income:
Amortization of retirement plan and other retiree benefit adjustments (net of tax of $138, $0, $276, and $0, respectively) 430 0 861 0
Comprehensive (loss) income $ (8,136) $ (40,671) $ (169,680) $ 37,931


	Three Months Ended				Nine Months Ended
	October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019
Net income (loss)	$	31,850	$	5,462	$	(138,691)	$	43,393
Other comprehensive income:
Amortization of retirement plan and other retiree benefit adjustments (net of tax of $138, $0, $414, and $0, respectively)	430		0		1,291		0

Comprehensive income (loss)	$	32,280	$	5,462	$	(137,400)	$	43,393

See notes to condensed consolidated financial statements.

Table of Contents

DILLARD’S, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

(In Thousands, Except Share and Per Share Data)


		Three Months Ended August 1, 2020																																				Three Months Ended October 31, 2020
								Accumulated Other Comprehensive Loss																				Accumulated Other Comprehensive Loss
		Common Stock				Additional Paid-in Capital											Retained Earnings				Treasury Stock						Common Stock						Accumulated Other Comprehensive Loss			Retained Earnings				Treasury Stock
														Accumulated Other Comprehensive Loss																												Accumulated Other Comprehensive Loss	Retained Earnings	Treasury Stock
Balance, May 2, 2020		$	1,239			$	(30,628)			$	4,391,039						$	1,396,406
Net loss		—				—				(8,566)							(8,566)
Balance, August 1, 2020																					Balance, August 1, 2020	$	1,240		$	952,522		$	(30,198)		$	4,378,988				$	(3,931,238)			$	1,371,314
Net income																					Net income	—			—			—			31,850			—				31,850
Other comprehensive income	Other comprehensive income	—				—				430				—			—				430		Other comprehensive income	—			—			430			—			—				430
Issuance of 32,000 shares under equity plans		1				796				—				—			—				797
Purchase of 586,851 shares of treasury stock		—		—				—				—			(14,268)				(14,268)

Purchase of 645,284 shares of treasury stock																					Purchase of 645,284 shares of treasury stock	—			—			—			—			(19,459)				(19,459)
Cash dividends declared:	Cash dividends declared:																				Cash dividends declared:
Common stock, $0.15 per share	Common stock, $0.15 per share	—		—				—				(3,485)			—				(3,485)		Common stock, $0.15 per share	—			—			—			(3,306)			—				(3,306)
Balance, August 1, 2020		$	1,240	$	952,522			$	(30,198)			$	4,378,988		$	(3,931,238)			$	1,371,314
Balance, October 31, 2020																					Balance, October 31, 2020	$	1,240		$	952,522		$	(29,768)		$	4,407,532		$	(3,950,697)			$	1,380,829

Three Months Ended August 3, 2019
Accumulated
Other
Comprehensive
Loss
Common Stock Additional
Paid-in
Capital Retained
Earnings Treasury
Stock
Total
Balance, May 4, 2019 $ 1,239 $ 948,835 $ (12,809) $ 4,533,973 $ (3,734,330) $ 1,736,908
Net loss — — — (40,671) — (40,671)
Issuance of 17,600 shares under equity plans — 1,011 — — — 1,011
Purchase of 818,585 shares of treasury stock — — — — (48,861) (48,861)
Cash dividends declared:
Common stock, $0.10 per share — — — (2,543) — (2,543)
Balance, August 3, 2019 $ 1,239 $ 949,846 $ (12,809) $ 4,490,759 $ (3,783,191) $ 1,645,844


	Three Months Ended November 2, 2019
					Accumulated Other Comprehensive Loss
	Common Stock		Additional Paid-in Capital				Retained Earnings		Treasury Stock
											Total
Balance, August 3, 2019	$	1,239	$	949,846	$	(12,809)	$	4,490,759	$	(3,783,191)	$	1,645,844
Net income	—		—		—		5,462��		—		5,462


Purchase of 600,479 shares of treasury stock	—		—		—		—		(35,213)		(35,213)
Cash dividends declared:
Common stock, $0.15 per share	—		—		—		(3,710)		—		(3,710)
Balance, November 2, 2019	$	1,239	$	949,846	$	(12,809)	$	4,492,511	$	(3,818,404)	$	1,612,383


		Six Months Ended August 1, 2020																																								Nine Months Ended October 31, 2020
								Accumulated Other Comprehensive Loss																							Accumulated Other Comprehensive Loss
		Common Stock				Additional Paid-in Capital											Retained Earnings					Treasury Stock							Common Stock								Accumulated Other Comprehensive Loss			Retained Earnings				Treasury Stock
														Accumulated Other Comprehensive Loss																															Accumulated Other Comprehensive Loss	Retained Earnings	Treasury Stock
Balance, February 1, 2020	Balance, February 1, 2020	$	1,239			$	(31,059)			$	4,556,494						$	1,623,259	Balance, February 1, 2020		$	1,239			$	951,726			$	(31,059)			$	4,556,494						$	1,623,259
Net loss	Net loss	—				—				(170,541)							(170,541)		Net loss		—				—				—				(138,691)				—			(138,691)
Other comprehensive income	Other comprehensive income	—				—				861				—			—					861		Other comprehensive income	—				—				1,291				—			—				1,291
Issuance of 32,000 shares under equity plans	Issuance of 32,000 shares under equity plans	1				796				—				—			—					797		Issuance of 32,000 shares under equity plans	1				796				—				—			—				797
Purchase of 1,585,593 shares of treasury stock		—		—				—				—			(76,097)				(76,097)
Purchase of 2,230,877 shares of treasury stock																						Purchase of 2,230,877 shares of treasury stock	—				—				—				—			(95,556)				(95,556)
Cash dividends declared:	Cash dividends declared:																					Cash dividends declared:
Common stock, $0.30 per share		—		—				—				(6,965)			—				(6,965)
Balance, August 1, 2020		$	1,240	$	952,522			$	(30,198)			$	4,378,988		$	(3,931,238)			$	1,371,314
Common stock, $0.45 per share																						Common stock, $0.45 per share	—				—				—				(10,271)			—				(10,271)
Balance, October 31, 2020																						Balance, October 31, 2020	$	1,240			$	952,522			$	(29,768)			$	4,407,532		$	(3,950,697)			$	1,380,829

Table of Contents


		Six Months Ended August 3, 2019																																								Nine Months Ended November 2, 2019
								Accumulated Other Comprehensive Loss																							Accumulated Other Comprehensive Loss
		Common Stock				Additional Paid-in Capital											Retained Earnings					Treasury Stock							Common Stock								Accumulated Other Comprehensive Loss			Retained Earnings				Treasury Stock
														Accumulated Other Comprehensive Loss																															Accumulated Other Comprehensive Loss	Retained Earnings	Treasury Stock
Balance, February 2, 2019	Balance, February 2, 2019	$	1,239			$	(12,809)			$	4,458,006						$	1,678,381	Balance, February 2, 2019		$	1,239			$	948,835			$	(12,809)			$	4,458,006						$	1,678,381
Net income	Net income	—				—				37,931							37,931		Net income		—				—				—				43,393				—			43,393

Issuance of 17,600 shares under equity plans	Issuance of 17,600 shares under equity plans	—				1,011				—				—			—					1,011		Issuance of 17,600 shares under equity plans	—				1,011				—				—			—				1,011
Purchase of 1,064,743 shares of treasury stock		—				—				—				—			(66,301)					(66,301)
Purchase of 1,665,222 shares of treasury stock																						Purchase of 1,665,222 shares of treasury stock	—				—				—				—			(101,514)				(101,514)
Cash dividends declared:	Cash dividends declared:																					Cash dividends declared:
Common stock, $0.20 per share		—		—				—				(5,178)			—				(5,178)
Balance, August 3, 2019		$	1,239	$	949,846			$	(12,809)			$	4,490,759		$	(3,783,191)			$	1,645,844
Common stock, $0.35 per share																						Common stock, $0.35 per share	—				—				—				(8,888)			—				(8,888)
Balance, November 2, 2019																						Balance, November 2, 2019	$	1,239			$	949,846			$	(12,809)			$	4,492,511		$	(3,818,404)			$	1,612,383

See notes to condensed consolidated financial statements.

Table of Contents

DILLARD’S, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In Thousands)


		Six Months Ended							Nine Months Ended
		August 1, 2020		August 3, 2019			October 31, 2020		November 2, 2019

Operating activities:	Operating activities:					Operating activities:
Net (loss) income	Net (loss) income	$	(170,541)	$	37,931	Net (loss) income	$	(138,691)	$	43,393
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:						Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization of property and other deferred cost	Depreciation and amortization of property and other deferred cost	103,140		107,740		Depreciation and amortization of property and other deferred cost	157,335		164,373
Loss (gain) on disposal of assets	Loss (gain) on disposal of assets	14		(12,300)		Loss (gain) on disposal of assets	2,235		(11,996)

Proceeds from insurance						Proceeds from insurance	8,659		397

Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable		17,529		(2,093)
Decrease (increase) in merchandise inventories		181,866		(74,614)
Decrease in accounts receivable						Decrease in accounts receivable	17,754		1,612
Increase in merchandise inventories						Increase in merchandise inventories	(80,257)		(441,563)
Increase in other current assets	Increase in other current assets	(5,148)		(7,882)		Increase in other current assets	(13,680)		(2,015)
Increase in other assets		(124)		(8,362)
Decrease in trade accounts payable and accrued expenses and other liabilities		(290,268)		(52,746)
Decrease (increase) in other assets						Decrease (increase) in other assets	456		(8,404)
Increase in trade accounts payable and accrued expenses and other liabilities						Increase in trade accounts payable and accrued expenses and other liabilities	145,745		286,322
Decrease in income taxes	Decrease in income taxes	(130,977)		(6,254)		Decrease in income taxes	(162,494)		(9,135)

Net cash used in operating activities		(294,509)		(18,580)
Net cash (used in) provided by operating activities						Net cash (used in) provided by operating activities	(62,938)		22,984

Investing activities:	Investing activities:					Investing activities:
Purchases of property and equipment and capitalized software	Purchases of property and equipment and capitalized software	(38,607)		(38,049)		Purchases of property and equipment and capitalized software	(52,100)		(70,915)
Proceeds from disposal of assets	Proceeds from disposal of assets	308		21,997		Proceeds from disposal of assets	1,533		22,031

Distribution from joint venture	Distribution from joint venture	215		505		Distribution from joint venture	215		1,350

Net cash used in investing activities	Net cash used in investing activities	(38,084)		(15,547)		Net cash used in investing activities	(50,352)		(47,534)

Financing activities:	Financing activities:					Financing activities:
Principal payments on long-term debt and finance lease liabilities	Principal payments on long-term debt and finance lease liabilities	(572)		(456)		Principal payments on long-term debt and finance lease liabilities	(885)		(703)
Issuance cost of line of credit	Issuance cost of line of credit	(3,001)		0		Issuance cost of line of credit	(3,230)		0
Increase in short-term borrowings	Increase in short-term borrowings	229,600		117,900		Increase in short-term borrowings	15,000		98,600
Cash dividends paid	Cash dividends paid	(7,185)		(5,267)		Cash dividends paid	(10,669)		(7,810)
Purchase of treasury stock	Purchase of treasury stock	(80,458)		(66,301)		Purchase of treasury stock	(102,879)		(101,514)

Net cash provided by financing activities		138,384		45,876
Net cash used in financing activities						Net cash used in financing activities	(102,663)		(11,427)

(Decrease) increase in cash, cash equivalents and restricted cash		(194,209)		11,749
Decrease in cash, cash equivalents and restricted cash						Decrease in cash, cash equivalents and restricted cash	(215,953)		(35,977)
Cash, cash equivalents and restricted cash, beginning of period	Cash, cash equivalents and restricted cash, beginning of period	277,077		123,509		Cash, cash equivalents and restricted cash, beginning of period	277,077		123,509

Cash, cash equivalents and restricted cash, end of period	Cash, cash equivalents and restricted cash, end of period	$	82,868	$	135,258	Cash, cash equivalents and restricted cash, end of period	$	61,124	$	87,532

Non-cash transactions:	Non-cash transactions:					Non-cash transactions:
Accrued capital expenditures	Accrued capital expenditures	$	7,994	$	4,811	Accrued capital expenditures	$	6,038	$	9,573
Accrued purchases of treasury stock		2,962		0

Stock awards	Stock awards	797		1,011		Stock awards	797		1,011

Lease assets obtained in exchange for new operating lease liabilities	Lease assets obtained in exchange for new operating lease liabilities	4,084		4,601		Lease assets obtained in exchange for new operating lease liabilities	4,084		4,601

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 ~~six~~nine months ended ~~August 1,~~October 31, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending January 30, 2021 due to, among other factors, the seasonal nature of the business and the COVID-19 pandemic.

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 February 1, 2020 filed with the SEC on March 31, 2020.

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.


(in thousands)	(in thousands)	August 1, 2020		August 3, 2019		(in thousands)	October 31, 2020		November 2, 2019
Cash and cash equivalents	Cash and cash equivalents	$	82,868	$	118,108	Cash and cash equivalents	$	61,124	$	79,065
Restricted cash	Restricted cash	0		17,150		Restricted cash	0		8,467
Total cash, cash equivalents and restricted cash	Total cash, cash equivalents and restricted cash	$	82,868	$	135,258	Total cash, cash equivalents and restricted cash	$	61,124	$	87,532

COVID-19

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic, which continues to spread throughout the United States and the world. The effects of the COVID-19 pandemic have had and continue to have a significant impact on the Company's business, results of operations and financial position. At present, the COVID-19 pandemic has had a significant negative effect on the Company's liquidity and net sales. Due to heightened uncertainty relating to the impacts of COVID-19 on the Company’s business operations, including the duration and impact on overall customer demand, our liquidity, net sales and profitability may be further impacted if we are unable to appropriately manage our inventory levels and expenses.

The Company began closing stores on March 19, 2020 as mandated by state and local governments, and by April 9, 2020, all ~~285~~brick-and-mortar store locations were temporarily ~~closed.~~closed to the public. The Company began re-opening stores on May 5, 2020, and by June 2, 2020, all stores had been re-opened using the Centers for Disease Control and Prevention ("CDC") guidelines to promote a safe environment for our customers and employees. All stores ~~remain~~are currently open and operating at reduced ~~hours~~hours. A very small number of our locations were temporarily closed to in-store shopping due to government mandate. Other local mandates throughout the country require occupancy limits with ~~the exception of one location.~~which we are required to comply. We continue to monitor additional local government orders that may affect our operations.

As part of the Company's liquidity strategy during the COVID-19 pandemic, in March 2020, the Company borrowed $779 million under ~~the~~its revolving credit agreement, which was repaid concurrent with the execution of the amended credit agreement. At ~~August 1,~~October 31, 2020, borrowings of ~~$229.6~~$15.0 million were outstanding, and letters of credit totaling $~~21.0~~21.1 million were issued under the amended credit agreement leaving unutilized availability under the facility of $~~447.0~~763.9 million. See Note 7, Revolving Credit Agreement, for additional information.

We assess the impairment of long-lived assets, primarily fixed assets and operating lease assets, whenever events or changes in circumstances indicate that the carrying value may not be recoverable. We evaluated the effects of the COVID-19 pandemic on our business and determined that as of ~~August 1,~~October 31, 2020, the carrying values of our property and equipment and operating

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lease assets were recoverable. Accordingly, no impairment charge was recorded for the ~~six~~nine months ended ~~August 1,~~October 31, 2020. We

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will continue to monitor these factors and the impact of the COVID-19 pandemic on future periods and continue to assess these assets for impairment as needed.

Note 2. Accounting Standards

Recently Issued Accounting Pronouncements

Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued Accounting Standards Update ("ASU") No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, as part of its initiative to reduce complexity in accounting standards. The amendments in this update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The amendments within ASU No. 2019-12 are effective for financial statements issued for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, and early adoption is permitted. The Company ~~is currently assessing the impact of~~does not expect this update to have a material impact on its consolidated financial statements.

Note 3. Business Segments

The Company operates in 2 reportable segments: the operation of retail department stores (“retail operations”) and a general contracting construction company (“construction”).

For the Company’s retail operations, the Company determined its operating segments on a store by store basis. Each store’s operating performance has been aggregated into 1 reportable segment. The Company’s operating segments are aggregated for financial reporting purposes because they 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 1 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 would not provide meaningful additional information.

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


		Three Months Ended						Six Months Ended							Three Months Ended				Nine Months Ended
		August 1, 2020		August 3, 2019		August 1, 2020		August 3, 2019			October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019
Retail operations segment	Retail operations segment									Retail operations segment
Cosmetics	Cosmetics	14	%	13	%	14	%	13	%	Cosmetics	14	%	14	%	14	%	13	%
Ladies’ apparel	Ladies’ apparel	21		24		21		24		Ladies’ apparel	20		23		21		24
Ladies’ accessories and lingerie	Ladies’ accessories and lingerie	16		16		16		15		Ladies’ accessories and lingerie	15		14		15		15
Juniors’ and children’s apparel	Juniors’ and children’s apparel	9		8		9		10		Juniors’ and children’s apparel	10		10		10		10
Men’s apparel and accessories	Men’s apparel and accessories	20		19		18		17		Men’s apparel and accessories	18		17		18		17
Shoes	Shoes	13		14		14		15		Shoes	16		15		15		15
Home and furniture	Home and furniture	4		3		4		3		Home and furniture	4		3		4		3
		97		97		96		97			97		96		97		97
Construction segment	Construction segment	3		3		4		3		Construction segment	3		4		3		3
Total	Total	100	%	100	%	100	%	100	%	Total	100	%	100	%	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)	(in thousands of dollars)	Retail Operations		Construction		Consolidated		(in thousands of dollars)	Retail Operations		Construction		Consolidated
Three Months Ended August 1, 2020:
Three Months Ended October 31, 2020								Three Months Ended October 31, 2020
Net sales from external customers	Net sales from external customers	$	893,216	$	25,828	$	919,044	Net sales from external customers	$	994,588	$	30,311	$	1,024,899
Gross profit	Gross profit	277,407		1,790		279,197		Gross profit	364,232		1,983		366,215
Depreciation and amortization	Depreciation and amortization	50,784		167		50,951		Depreciation and amortization	53,290		87		53,377
Interest and debt expense (income), net	Interest and debt expense (income), net	12,885		(12)		12,873		Interest and debt expense (income), net	12,167		(5)		12,162
(Loss) income before income taxes	(Loss) income before income taxes	(33,699)		373		(33,326)		(Loss) income before income taxes	(232)		462		230

Total assets	Total assets	3,056,320		26,916		3,083,236		Total assets	3,279,241		26,748		3,305,989

Three Months Ended August 3, 2019:
Three Months Ended November 2, 2019								Three Months Ended November 2, 2019
Net sales from external customers	Net sales from external customers	$	1,378,163	$	48,700	$	1,426,863	Net sales from external customers	$	1,334,205	$	54,105	$	1,388,310
Gross profit	Gross profit	395,137		(288)		394,849		Gross profit	460,549		979		461,528
Depreciation and amortization	Depreciation and amortization	54,207		176		54,383		Depreciation and amortization	55,963		180		56,143
Interest and debt expense (income), net	Interest and debt expense (income), net	12,278		(30)		12,248		Interest and debt expense (income), net	11,562		(26)		11,536
Loss before income taxes		(50,929)		(1,222)		(52,151)
Income before income taxes								Income before income taxes	2,223		679		2,902

Total assets	Total assets	3,463,087		48,992		3,512,079		Total assets	3,753,211		46,852		3,800,063

Six Months Ended August 1, 2020:
Nine Months Ended October 31, 2020								Nine Months Ended October 31, 2020
Net sales from external customers	Net sales from external customers	$	1,644,243	$	61,456	$	1,705,699	Net sales from external customers	$	2,638,831	$	91,767	$	2,730,598
Gross profit	Gross profit	373,441		3,942		377,383		Gross profit	737,673		5,925		743,598
Depreciation and amortization	Depreciation and amortization	101,516		336		101,852		Depreciation and amortization	154,806		423		155,229
Interest and debt expense (income), net	Interest and debt expense (income), net	25,176		(33)		25,143		Interest and debt expense (income), net	37,343		(38)		37,305
(Loss) income before income taxes	(Loss) income before income taxes	(262,366)		895		(261,471)		(Loss) income before income taxes	(262,598)		1,357		(261,241)

Total assets	Total assets	3,056,320		26,916		3,083,236		Total assets	3,279,241		26,748		3,305,989

Six Months Ended August 3, 2019
Nine Months Ended November 2, 2019								Nine Months Ended November 2, 2019
Net sales from external customers	Net sales from external customers	$	2,798,685	$	93,619	$	2,892,304	Net sales from external customers	$	4,132,890	$	147,724	$	4,280,614
Gross profit	Gross profit	931,508		1,015		932,523		Gross profit	1,392,057		1,994		1,394,051
Depreciation and amortization	Depreciation and amortization	106,401		346		106,747		Depreciation and amortization	162,364		526		162,890
Interest and debt expense (income), net	Interest and debt expense (income), net	23,542		(57)		23,485		Interest and debt expense (income), net	35,104		(83)		35,021
Income (loss) before income taxes	Income (loss) before income taxes	49,799		(1,178)		48,621		Income (loss) before income taxes	52,023		(500)		51,523

Total assets	Total assets	3,463,087		48,992		3,512,079		Total assets	3,753,211		46,852		3,800,063

Intersegment construction revenues of ~~$6.9~~$4.1 million and ~~$6.2~~$8.2 million for the three months ended ~~August 1,~~October 31, 2020 and ~~August 3,~~November 2, 2019, respectively, and ~~$18.3~~$22.3 million and ~~$14.6~~$22.8 million for the ~~six~~nine months ended ~~August 1,~~October 31, 2020 and ~~August 3,~~November 2, 2019, 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 loyalty program and through the issuances of gift cards. The loyalty program liability and a portion of the gift card liability is 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	Retail															Retail
(in thousands of dollars)	(in thousands of dollars)	August 1, 2020		February 1, 2020		August 3, 2019		February 2, 2019		(in thousands of dollars)	October 31, 2020		February 1, 2020		November 2, 2019		February 2, 2019
Contract liabilities	Contract liabilities	$	58,186	$	75,229	$	63,041	$	72,852	Contract liabilities	$	54,684	$	75,229	$	60,742	$	72,852

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During the ~~six~~nine months ended ~~August 1,~~October 31, 2020 and ~~August 3,~~November 2, 2019, the Company recorded ~~$29.8~~$39.7 million and ~~$37.6~~$45.2 million, respectively, in revenue that was previously included in the retail operations contract liability balances of $75.2 million and $72.9 million, at February 1, 2020 and February 2, 2019, 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 in the condensed consolidated balance sheets, respectively. The amounts included in the condensed consolidated balance sheets are as follows:


Construction	Construction													Construction
(in thousands of dollars)	(in thousands of dollars)	August 1, 2020		February 1, 2020		August 3, 2019		February 2, 2019		(in thousands of dollars)	October 31, 2020		February 1, 2020		November 2, 2019		February 2, 2019
Accounts receivable	Accounts receivable	$	19,222	$	28,522	$	36,276	$	31,867	Accounts receivable	$	18,689	$	28,522	$	33,154	$	31,867
Costs and estimated earnings in excess of billings on uncompleted contracts	Costs and estimated earnings in excess of billings on uncompleted contracts	722		2,179		2,927		1,165		Costs and estimated earnings in excess of billings on uncompleted contracts	781		2,179		2,479		1,165
Billings in excess of costs and estimated earnings on uncompleted contracts	Billings in excess of costs and estimated earnings on uncompleted contracts	7,212		5,737		10,358		7,414		Billings in excess of costs and estimated earnings on uncompleted contracts	5,808		5,737		6,800		7,414

During the ~~six~~nine months ended ~~August 1,~~October 31, 2020 and ~~August 3,~~November 2, 2019, the Company recorded ~~$4.7~~$4.9 million and ~~$6.8~~$7.1 million, respectively, in revenue that was previously included in billings in excess of costs and estimated earnings on uncompleted contracts of $5.7 million and $7.4 million at February 1, 2020 and February 2, 2019, respectively.

The remaining performance obligations related to executed construction contracts totaled ~~$127.0~~$97.2 million, $156.5 million and ~~$108.4~~$71.9 million at ~~August 1,~~October 31, 2020, February 1, 2020 and ~~August 3,~~November 2, 2019, respectively.

Note 4. Earnings (Loss) ~~Earnings~~ Per Share Data

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

Three Months Ended Six Months Ended
August 1,
2020 August 3,
2019 August 1,
2020 August 3,
2019
Net (loss) income $ (8,566) $ (40,671) $ (170,541) $ 37,931
Weighted average shares of common stock outstanding 23,174 25,584 23,264 25,949
Basic and diluted (loss) earnings per share $ (0.37) $ (1.59) $ (7.33) $ 1.46


	Three Months Ended				Nine Months Ended
	October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019
Net income (loss)	$	31,850	$	5,462	$	(138,691)	$	43,393

Weighted average shares of common stock outstanding	22,264		24,913		22,930		25,604

Basic and diluted earnings (loss) per share	$	1.43	$	0.22	$	(6.05)	$	1.69

The Company maintains a capital structure in which common stock is the only equity security issued and outstanding, and there were 0 shares of preferred stock, stock options, other dilutive securities or potentially dilutive securities issued or outstanding during the three and ~~six~~nine months ended ~~August 1,~~October 31, 2020 and ~~August 3,~~November 2, 2019.

Note 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 the Company’s financial position, cash flows or results of operations.

At ~~August 1,~~October 31, 2020, letters of credit totaling ~~$21.0~~$21.1 million were issued under the Company’s revolving credit facility. See Note 7, Revolving Credit Agreement, for additional information.

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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 expense 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. The Company contributed $1.4 million and ~~$2.8~~$4.2 million to the Pension Plan during the three and ~~six~~nine months ended ~~August 1,~~October 31, 2020, respectively, and expects to make additional contributions to the Pension Plan of approximately ~~$2.7~~$1.5 million during the remainder of fiscal 2020.

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


		Three Months Ended						Six Months Ended							Three Months Ended				Nine Months Ended
		August 1, 2020		August 3, 2019		August 1, 2020		August 3, 2019			October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019
Components of net periodic benefit costs:	Components of net periodic benefit costs:									Components of net periodic benefit costs:
Service cost	Service cost	$	1,090	$	905	$	2,180	$	1,810	Service cost	$	1,090	$	906	$	3,270	$	2,716
Interest cost	Interest cost	1,536		1,917		3,072		3,834		Interest cost	1,536		1,916		4,608		5,750
Net actuarial loss	Net actuarial loss	568		0		1,137		0		Net actuarial loss	568		0		1,705		0
Net periodic benefit costs	Net periodic benefit costs	$	3,194	$	2,822	$	6,389	$	5,644	Net periodic benefit costs	$	3,194	$	2,822	$	9,583	$	8,466

The service cost component of net periodic benefit costs is included in selling, general and administrative expenses, and the interest cost and net actuarial loss components are included in other expense.

Note 7. Revolving Credit Agreement

In April 2020, the Company amended its credit agreement (the "amended credit agreement"). After giving effect to the amendment, the amended credit agreement became secured by certain deposit accounts of the Company and certain inventory of certain subsidiaries. The amended credit agreement provides a borrowing capacity of $800 million, subject to certain limitations as outlined in the amended credit agreement, with a $200 million expansion option and matures on August 9, 2022. The amended 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 Company pays a variable rate of interest on borrowings under the amended credit agreement and a commitment fee to the participating banks. The rate of interest on borrowings is the greater of LIBOR or 1.0% plus 1.750%, and the commitment fee for unused borrowings is 0.30% per annum. As long as availability exceeds $100 million and no event of default occurs and is continuing, there are no financial covenant requirements under the amended credit agreement.

Concurrent with the signing of the amended credit facility, the Company repaid the $779 million borrowed on March 25, 2020 under the previous agreement. Additionally, the Company paid ~~$3.0~~$3.2 million in issuance costs related to the amended credit agreement, which were recorded in other assets on the condensed consolidated balance sheets.

At ~~August 1,~~October 31, 2020, ~~$229.6~~$15.0 million of borrowings were outstanding, and letters of credit totaling ~~$21.0~~$21.1 million were issued under the amended credit agreement leaving unutilized availability under the credit facility of ~~$447.0~~$763.9 million. The weighted average interest rate under the credit agreement for the borrowings outstanding at ~~August 1,~~October 31, 2020 was 2.75%.

Note 8. Stock Repurchase Program

In March 2018, the Company's Board of Directors authorized the Company to repurchase up to $500 million of the Company’s Class A Common Stock pursuant to an open-ended stock repurchase plan (the "March 2018 Plan"). The March 2018 Plan authorization 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 or through privately negotiated transactions. The March 2018 Plan has no expiration date.

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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						Six Months Ended							Three Months Ended				Nine Months Ended
		August 1, 2020		August 3, 2019		August 1, 2020		August 3, 2019			October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019
Cost of shares repurchased	Cost of shares repurchased	$	14,268	$	48,861	$	76,097	$	66,301	Cost of shares repurchased	$	19,459	$	35,213	$	95,556	$	101,514
Number of shares repurchased	Number of shares repurchased	587		819		1,586		1,065		Number of shares repurchased	645		600		2,231		1,665
Average price per share	Average price per share	$	24.31	$	59.69	$	47.99	$	62.27	Average price per share	$	30.16	$	58.64	$	42.83	$	60.96

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 ~~August 1,~~October 31, 2020, ~~$192.6~~$173.1 million of authorization remained under the March 2018 Plan.

Note 9. Income Taxes

The Company expects to be in a net operating loss position for the fiscal ~~year.~~year ending January 30, 2021. The Coronavirus Aid, Relief and Economic Security (“CARES”) Act, signed into law on March 27, 2020, allows for net operating loss carryback to years in which the statutory federal tax rate was 35% rather than the current 21%. During the three and ~~six~~nine months ended ~~August 1,~~October 31, 2020, income tax benefit differed from what would be computed using the current statutory federal tax rate of 21% primarily due to the recognition of a net tax benefit of ~~$17.4~~$32.4 million and ~~$32.1~~$64.6 million, respectively, related to the rate differential in the carryback year including its impact on changes in estimates of temporary differences for the current and prior year. Income tax benefit for the three and ~~six~~nine months also included the effects of federal tax credits and state and local income taxes.

During the three and ~~six~~nine months ended ~~August 3,~~November 2, 2019, income taxes differed from what would be computed using the statutory federal tax rate primarily due to the effects of federal tax credits and state and local income taxes which included tax benefits recognized of approximately$2.8 millionfor amended state income tax return filings and related decreases to accrued state income taxes.

Note 10. Reclassifications from Accumulated Other Comprehensive Loss (“AOCL”)

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


		Amount Reclassified from AOCL																					Amount Reclassified from AOCL
		Three Months Ended						Six Months Ended								Affected Line Item in the Statement Where Net Income Is Presented				Three Months Ended						Nine Months Ended		Affected Line Item in the Statement Where Net Income Is Presented
Details about AOCL Components	Details about AOCL Components	August 1, 2020		August 3, 2019		August 1, 2020		August 3, 2019			Affected Line Item in the Statement Where Net Income Is Presented	Details about AOCL Components			October 31, 2020				November 2, 2019			October 31, 2020			November 2, 2019		Affected Line Item in the Statement Where Net Income Is Presented
Defined benefit pension plan items	Defined benefit pension plan items

Amortization of actuarial losses	Amortization of actuarial losses	$	568	$	0	$	1,137	$	0	Total before tax (1)	Amortization of actuarial losses		$	568			$	0		$	1,705		$	0		Total before tax (1)
		138		0		276		0		Income tax expense			138				0			414			0			Income tax expense
		$	430	$	0	$	861	$	0	Total net of tax			$	430			$	0		$	1,291		$	0		Total net of tax

For fiscal year 2019, there was 0 amortization of the net loss in AOCL as the net loss did not exceed 10% of the projected benefit obligation.

(1) This item is included in the computation of net periodic pension cost. See Note 6, Benefit Plans, for additional information.

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Note 11. 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 Six Months Ended
August 1, 2020 August 3, 2019 August 1,
2020 August 3,
2019
Beginning balance $ 30,628 $ 12,809 $ 31,059 $ 12,809
Amounts reclassified from AOCL (430) 0 (861) 0
Ending balance $ 30,198 $ 12,809 $ 30,198 $ 12,809

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	Defined Benefit Pension Plan Items
	Three Months Ended				Nine Months Ended
	October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019
Beginning balance	$	30,198	$	12,809	$	31,059	$	12,809


Amounts reclassified from AOCL	(430)		0		(1,291)		0


Ending balance	$	29,768	$	12,809	$	29,768	$	12,809

Note 12. Leases

The Company leases retail stores, office space and equipment under operating leases. As of ~~August 1,~~October 31, 2020, February 1, 2020 and ~~August 3,~~November 2, 2019, right-of-use operating lease assets, which are recorded in operating lease assets in the condensed consolidated balance sheets, totaled ~~$44.1~~$40.5 million, $47.9 million and ~~$52.6~~$48.6 million, respectively, and operating lease liabilities, which are recorded in current portion of operating lease liabilities and operating lease liabilities, totaled ~~$43.8~~$40.2 million, $47.3 million and ~~$52.1~~$48.2 million, respectively.

In determining our operating lease assets and operating lease liabilities, we apply an incremental borrowing rate to the minimum lease payments within each lease agreement. ASU No. 2016-02 requires the use of the rate implicit in the lease whenever that rate is readily determinable; furthermore, if the implicit rate is not readily determinable, a lessee may use its incremental borrowing rate. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. To estimate our specific incremental borrowing rates that align with applicable lease terms, we utilize a model consistent with the credit quality of our outstanding debt instruments.

Renewal options from two to 20 years exist on the majority of leased properties. The Company has sole discretion in exercising the lease renewal options. We do not recognize operating lease assets or operating lease liabilities for renewal periods unless we are reasonably certain of renewing the lease at inception. The depreciable life of operating lease assets and related leasehold improvements is limited by the expected lease term.

Contingent rentals on certain leases are based on a percentage of annual sales in excess of specified amounts. Other contingent rentals are based entirely on a percentage of sales. The Company's operating lease agreements do not contain any material residual value guarantees or material restrictive covenants.

~~The following table summarizes the Company's operating and finance leases:~~

(in thousands of dollars) Classification - Condensed Consolidated Balance Sheets August 1, 2020 February 1, 2020 August 3, 2019
Assets
Finance lease assets
Property and equipment, net ^(a)
$ 459 $ 670 $ 881
Operating lease assets Operating lease assets 44,091 47,924 52,608
Total leased assets $ 44,550 $ 48,594 $ 53,489
Liabilities
Current
     Finance Current portion of finance lease liabilities $ 986 $ 1,219 $ 1,082
     Operating Current portion of operating lease liabilities 13,758 14,654 15,701
Noncurrent
     Finance Finance lease liabilities 356 695 1,342
     Operating Operating lease liabilities 30,051 32,683 36,407
Total lease liabilities $ 45,151 $ 49,251 $ 54,532

^(a) ~~Finance lease assets are recorded net of accumulated amortization of $14.1 million, $13.9 million and $13.7 million as of August 1, 2020, February 1, 2020 and August 3, 2019, respectively.~~

Lease Cost Three Months Ended Six Months Ended
(in thousands of dollars) Classification - Condensed Consolidated Statements of Operations August 1, 2020 August 3, 2019 August 1, 2020 August 3, 2019
Operating lease cost ^(a)
Rentals $ 5,639 $ 6,209 $ 11,189 $ 12,327
Finance lease cost
Amortization of leased assets Depreciation and amortization 105 106 211 211
Interest on lease liabilities Interest and debt expense, net 62 123 142 258
Net lease cost $ 5,806 $ 6,438 $ 11,542 $ 12,796

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The following table summarizes the Company's operating and finance leases:


(in thousands of dollars)	Classification - Condensed Consolidated Balance Sheets	October 31, 2020		February 1, 2020		November 2, 2019
Assets
Finance lease assets	Property and equipment, net (a)	$	353	$	670	$	776
Operating lease assets	Operating lease assets	40,471		47,924		48,600
Total leased assets		$	40,824	$	48,594	$	49,376

Liabilities
Current
Finance	Current portion of finance lease liabilities	$	849	$	1,219	$	1,148
Operating	Current portion of operating lease liabilities	12,775		14,654		15,250
Noncurrent
Finance	Finance lease liabilities	180		695		1,029
Operating	Operating lease liabilities	27,412		32,683		32,958
Total lease liabilities		$	41,216	$	49,251	$	50,385

(a) Finance lease assets are recorded net of accumulated amortization of $14.2 million, $13.9 million and $13.8 million as of October 31, 2020, February 1, 2020 and November 2, 2019, respectively.


Lease Cost		Three Months Ended				Nine Months Ended
(in thousands of dollars)	Classification - Condensed Consolidated Statements of Operations	October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019
Operating lease cost (a)	Rentals	$	5,115	$	5,927	$	16,304	$	18,254
Finance lease cost
Amortization of leased assets	Depreciation and amortization	106		106		317		317
Interest on lease liabilities	Interest and debt expense, net	44		109		186		367
Net lease cost		$	5,265	$	6,142	$	16,807	$	18,938

^(a)Includes short term lease costs of $0.5 million and ~~$1.0~~$0.8 million for the three months ended and ~~$1.0~~$1.5 million and ~~$1.7~~$2.5 million for the ~~six~~nine months ended ~~August 1,~~October 31, 2020 and ~~August 3,~~November 2, 2019, respectively, and variable lease costs of $0.4 million and ~~$0.4~~$0.3 million for the three months ended and ~~$0.7~~$1.1 million and ~~$0.8~~$1.0 million for the ~~six~~nine months ended ~~August 1,~~October 31, 2020 and ~~August 3,~~November 2, 2019, respectively.

Maturities of Lease Liabilities


(in thousands of dollars) Fiscal Year	(in thousands of dollars) Fiscal Year	Operating Leases		Finance Leases		Total		(in thousands of dollars) Fiscal Year	Operating Leases		Finance Leases		Total
2020 (excluding the six months ended August 1, 2020)		$	7,819	$	714	$	8,533
2020 (excluding the nine months ended October 31, 2020)								2020 (excluding the nine months ended October 31, 2020)	$	3,550	$	357	$	3,907
2021	2021	14,153		726		14,879		2021	14,154		726		14,880
2022	2022	7,811		0		7,811		2022	7,811		0		7,811
2023	2023	4,496		0		4,496		2023	4,496		0		4,496
2024	2024	3,714		0		3,714		2024	3,714		0		3,714
After 2024	After 2024	15,916		0		15,916		After 2024	15,916		0		15,916
Total minimum lease payments	Total minimum lease payments	53,909		1,440		55,349		Total minimum lease payments	49,641		1,083		50,724
Less amount representing interest	Less amount representing interest	(10,100)		(98)		(10,198)		Less amount representing interest	(9,454)		(54)		(9,508)
Present value of lease liabilities	Present value of lease liabilities	$	43,809	$	1,342	$	45,151	Present value of lease liabilities	$	40,187	$	1,029	$	41,216

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Lease Term and Discount Rate


	~~August 1,~~October 31, 2020
Weighted-average remaining lease term
Operating leases	~~6.2~~6.3 years
Finance leases	~~1.3~~1.1 years
Weighted-average discount rate
Operating leases	6.6	%
Finance leases	~~12.3~~10.4	%

Other Information


		Six Months Ended							Nine Months Ended
(in thousands of dollars)	(in thousands of dollars)	August 1, 2020		August 3, 2019		(in thousands of dollars)	October 31, 2020		November 2, 2019
Cash paid for amounts included in the measurement of lease liabilities	Cash paid for amounts included in the measurement of lease liabilities					Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	Operating cash flows from operating leases	$	9,387	$	10,388	Operating cash flows from operating leases	$	14,490	$	15,060
Operating cash flows from finance leases	Operating cash flows from finance leases	142		258		Operating cash flows from finance leases	186		367
Financing cash flows from finance leases	Financing cash flows from finance leases	572		456		Financing cash flows from finance leases	885		703

Lease assets obtained in exchange for new operating lease liabilities	Lease assets obtained in exchange for new operating lease liabilities	$	4,084	$	4,601	Lease assets obtained in exchange for new operating lease liabilities	$	4,084	$	4,601

Note 13. Loss (Gain) on Disposal of Assets

During the three months ended ~~August 3, 2019,~~October 31, 2020, the Company recorded proceeds of ~~$8.6~~$1.5 million primarily from the sale of one store property, resulting in a ~~gain~~loss of ~~$4.9~~$2.2 million that was recorded in loss (gain) on disposal of assets.

During the ~~six~~three months ended ~~August 3,~~November 2, 2019, the Company recorded a loss of $0.3 million primarily from the sale of one store property that was recorded in loss (gain) on disposal of assets.

During the nine months ended November 2, 2019, the Company recorded proceeds of $22.0 million primarily from the sale of three store properties, resulting in a gain of ~~$12.3~~$12.0 million that was recorded in loss (gain) on disposal of assets.

Note 14. 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

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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 is based on market prices and is categorized as Level 1 in the fair value hierarchy.

The fair value of the Company’s cash, cash equivalents, accounts receivable and short-term borrowings approximates their carrying values at ~~August 1,~~October 31, 2020 due to the short-term maturities of these instruments. The fair value of the Company’s long-term debt at ~~August 1,~~October 31, 2020 was approximately ~~$391~~$384 million. The carrying value of the Company’s long-term debt at ~~August 1,~~October 31, 2020 was $365.8 million. The fair value of the Company’s subordinated debentures at ~~August 1,~~October 31, 2020 was approximately ~~$158~~$183 million. The carrying value of the Company’s subordinated debentures at ~~August 1,~~October 31, 2020 was $200.0 million.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of 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 February 1, 2020.

EXECUTIVE OVERVIEW

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic, which continues to spread throughout the United States and the world. The COVID-19 pandemic has had and continues to have a significant impact on the Company's business, results of operations and financial position. The Company began closing stores on March 19, 2020 as mandated by state and local governments, and by April 9, 2020, all ~~285~~brick-and-mortar store locations were temporarily ~~closed.~~closed to the public.

During the month ended May 30, 2020 (fiscal May), we re-opened most of our full-line stores: 45 stores on May 5th, 80 stores on May 12th, 115 stores on May 19th and 20th and 8 stores on May 26th. All Dillard’s store locations had been re-opened by June 2, 2020 using the Centers for Disease Control and Prevention ("CDC") guidelines to promote a safe environment for our customers and employees. All stores ~~remain~~are currently open and operating at reduced ~~hours~~hours. A very small number of our locations were temporarily closed to in-store shopping due to government mandate. Other local mandates throughout the country require occupancy limits with ~~the exception of one location. Sales performance in these stores since re-opening through August 1, 2020 was approximately 72% of prior year sales on corresponding days.~~ which we are required to comply. We continue to monitor additional local government orders that may affect our operations.

During the three months ended ~~August 1,~~October 31, 2020, total retail sales decreased ~~35%~~approximately 25% and comparable store sales decreased approximately 24% compared to the three months ended ~~August 3,~~November 2, 2019. Due to the temporary closure of the Company's brick-and-mortar stores as well as the interdependence between in-store and online sales, the Company reported no comparable store sales data for the three months ended August 1, 2020. Retail gross margin increased ~~239~~210 basis points of sales to ~~31.1%~~36.6% during the three months ended ~~August 1,~~October 31, 2020 compared to ~~28.7%~~34.5% during the three months ended ~~August 3,~~November 2, 2019, primarily due to lower markdowns. The Company was able to reduce inventory by ~~20%~~approximately 22% compared to the prior year ~~second~~third quarter by reducing purchases ~~62% through the cancellation, delay and suspension of merchandise orders.~~approximately 31%. Selling, general and administrative expenses decreased to ~~$267.1~~$318.2 million compared to ~~$409.1~~$418.1 million from the prior year ~~second~~third quarter primarily due to decreases in payroll expense ~~associated with~~partially as a result of the ~~furlough of store associates, support facility functions and corporate employees and~~Company's reduced ~~store~~operating hours. The Company reported a net ~~loss~~income of ~~$8.6~~$31.9 million ($~~0.37~~1.43 per share) compared to a net ~~loss~~income of ~~$40.7~~$5.5 million ($~~1.59~~0.22 per share) for the prior year ~~second~~third quarter.

The Company expects to be in a net operating loss position for fiscal year 2020. The Coronavirus Aid, Relief and Economic Security (“CARES”) Act, signed into law on March 27, 2020, allows for net operating loss carryback to years in which the tax rate was 35%. Included in net ~~loss~~income for the quarter ended ~~August 1,~~October 31, 2020 is a net tax benefit of ~~$17.4~~$32.4 million ($~~0.75~~1.46 per share) related to this provision.

~~Included~~Also included in net ~~loss~~income for the quarter ~~ended August 3, 2019 was~~is a pretax ~~gain on disposal~~loss of ~~assets of $4.9~~$2.2 million ($~~3.8~~1.4 million after tax or ~~$0.15~~$0.06 per share) primarily related to the sale of ~~one store.~~a store property.

Included in net income for the quarter ended November 2, 2019 is a pretax loss on disposal of assets of $0.3 million ($0.2 million after tax or $0.01 per share) related to the sale of a store property. Also included in net income for the quarter is $2.8 million ($0.11 per share) in tax benefits related to amended state tax return filings.

During the three months ended ~~August 1,~~October 31, 2020, the Company purchased ~~$14.3~~$19.5 million of its outstanding Class A Common Stock under its stock repurchase plan authorized by the Company's Board of Directors in March 2018 (the "March 2018 Plan"). As of ~~May 2,~~October 31, 2020, authorization of ~~$192.6~~$173.1 million remained under the March 2018 Plan.

As of ~~August 1,~~October 31, 2020, the Company had working capital of ~~$714.8~~$767.0 million (including cash and cash equivalents of ~~$82.9~~$61.1 million) and ~~$795.4~~$580.8 million of total debt outstanding, excluding finance lease liabilities and operating lease liabilities. Cash flows used in operating activities were ~~$294.5~~$62.9 million for the ~~six~~nine months ended ~~August 1,~~October 31, 2020.

The Company maintained 282 Dillard's stores, including 3132 clearance centers, and an internet store at ~~August 1,~~October 31, 2020.

On February 25, 2020, the Company provided estimates for certain financial statement items, including depreciation and amortization, rentals, interest and debt expense, net and capital expenditures, for the fiscal year ending January 30, 2021 based upon current conditions at that time, which did not include the impact of COVID-19. Due to heightened uncertainty relating to the impacts of COVID-19 on the Company’s business operations, including the duration and impact on overall customer demand, the Company previously withdrew its 2020 guidance.

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The Company believes that Dillard's is uniquely positioned, among U.S. department store retailers, to weather the COVID-19 pandemic for the following reasons:

▪The Company owns approximately 90% of its retail store square footage and 100% of its corporate headquarters, distribution and fulfillment facilities;

▪Store rent obligations are small compared to the industry;

▪Low long-term debt position with next payment due January 2023 ($45 million);

▪Amended $800 million revolving credit facility with no financial covenants as long as availability exceeds $100 million and no event of default occurs and is continuing; and

▪Strong eCommerce platform at dillards.com which includes ship-from-store capability.

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										Three Months Ended
		August 1, 2020			August 3, 2019				October 31, 2020			November 2, 2019
Net sales (in millions)	Net sales (in millions)	$	919.0		$	1,426.9		Net sales (in millions)	$	1,024.9		$	1,388.3
Retail stores sales trend	Retail stores sales trend	(35)		%	(2)		%	Retail stores sales trend	(25)		%	(1)		%

Comparable retail stores sales trend								Comparable retail stores sales trend	(24)		%	—		%
Gross profit (in millions)	Gross profit (in millions)	$	279.2		$	394.8		Gross profit (in millions)	$	366.2		$	461.5
Gross profit as a percentage of net sales	Gross profit as a percentage of net sales	30.4		%	27.7		%	Gross profit as a percentage of net sales	35.7		%	33.2		%
Retail gross profit as a percentage of net sales	Retail gross profit as a percentage of net sales	31.1		%	28.7		%	Retail gross profit as a percentage of net sales	36.6		%	34.5		%
Selling, general and administrative expenses as a percentage of net sales	Selling, general and administrative expenses as a percentage of net sales	29.1		%	28.7		%	Selling, general and administrative expenses as a percentage of net sales	31.0		%	30.1		%
Cash flow used in operations (in millions)		$	(294.5)		$	(18.6)
Cash flow (used in) provided by operations (in millions)*								Cash flow (used in) provided by operations (in millions)*	$	(62.9)		$	23.0
Total retail store count at end of period	Total retail store count at end of period	282			289			Total retail store count at end of period	282			289
Retail sales per square foot	Retail sales per square foot	$	19		$	29		Retail sales per square foot	$	21		$	28
Retail store inventory trend	Retail store inventory trend	(20)		%	—		%	Retail store inventory trend	(22)		%	(4)		%
Annualized retail merchandise inventory turnover	Annualized retail merchandise inventory turnover	1.7			2.3			Annualized retail merchandise inventory turnover	1.8			2.0

*Cash flow from operations data is for the nine months ended October 31, 2020 and November 2, 2019.

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 quarter and the corresponding quarter for the prior 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 alliance with Wells Fargo Bank, N.A. (“Wells Fargo Alliance”). Other income includes rental income, shipping and handling fees, gift card breakage and lease income on leased departments.

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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

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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), 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, office space and data processing and other equipment rentals.

Interest and debt expense, net. Interest and debt expense includes interest, net of interest income and capitalized interest, relating to the Company’s unsecured notes, subordinated debentures and borrowings under the Company’s credit facility. Interest and debt expense also includes gains and losses on note repurchases, if any, amortization of financing costs and interest on finance lease liabilities.

Other expense. Other expense includes the interest cost and net actuarial loss components of net periodic benefit costs related to the Company's unfunded, nonqualified defined benefit plan and charges related to the write-off of deferred financing fees, if any.

Loss (gain) on disposal of assets. Loss (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

The use of LIBOR is expected to be phased out by the end of 2021. At this time, there is no definitive information regarding the future utilization of LIBOR beyond 2021 or of any particular replacement rate. Going forward, we intend to work with our lenders to use a suitable alternative reference rate for the amended credit agreement, the Wells Fargo Alliance and any other applicable agreements. We will continue to monitor, assess and plan for the phase out of LIBOR.

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						Six Months Ended							Three Months Ended				Nine Months Ended
		August 1, 2020		August 3, 2019		August 1, 2020		August 3, 2019			October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019
Net sales	Net sales	100.0	%	100.0	%	100.0	%	100.0	%	Net sales	100.0	%	100.0	%	100.0	%	100.0	%
Service charges and other income	Service charges and other income	2.8		2.2		3.6		2.2		Service charges and other income	2.7		2.5		3.2		2.3

		102.8		102.2		103.6		102.2			102.7		102.5		103.2		102.3

Cost of sales	Cost of sales	69.6		72.3		77.9		67.8		Cost of sales	64.3		66.8		72.8		67.4
Selling, general and administrative expenses	Selling, general and administrative expenses	29.1		28.7		32.7		28.2		Selling, general and administrative expenses	31.0		30.1		32.1		28.8
Depreciation and amortization	Depreciation and amortization	5.5		3.8		6.0		3.7		Depreciation and amortization	5.2		4.0		5.7		3.8
Rentals	Rentals	0.6		0.4		0.7		0.4		Rentals	0.5		0.4		0.6		0.4
Interest and debt expense, net	Interest and debt expense, net	1.4		0.9		1.5		0.8		Interest and debt expense, net	1.2		0.8		1.4		0.8
Other expense	Other expense	0.2		0.1		0.2		0.1		Other expense	0.2		0.1		0.2		0.1
Gain on disposal of assets		—		(0.3)		—		(0.4)
Loss (gain) on disposal of assets										Loss (gain) on disposal of assets	0.2		—		0.1		(0.3)

(Loss) income before income taxes		(3.6)		(3.7)		(15.3)		1.7
Income (loss) before income taxes										Income (loss) before income taxes	—		0.2		(9.6)		1.2
Income taxes (benefit)	Income taxes (benefit)	(2.7)		(0.8)		(5.3)		0.4		Income taxes (benefit)	(3.1)		(0.2)		(4.5)		0.2

Net (loss) income		(0.9)	%	(2.9)	%	(10.0)	%	1.3	%
Net income (loss)										Net income (loss)	3.1	%	0.4	%	(5.1)	%	1.0	%

Net Sales


		Three Months Ended									Three Months Ended
(in thousands of dollars)	(in thousands of dollars)	August 1, 2020		August 3, 2019		$ Change		(in thousands of dollars)	October 31, 2020		November 2, 2019		$ Change
Net sales:	Net sales:							Net sales:
Retail operations segment	Retail operations segment	$	893,216	$	1,378,163	$	(484,947)	Retail operations segment	$	994,588	$	1,334,205	$	(339,617)
Construction segment	Construction segment	25,828		48,700		(22,872)		Construction segment	30,311		54,105		(23,794)
Total net sales	Total net sales	$	919,044	$	1,426,863	$	(507,819)	Total net sales	$	1,024,899	$	1,388,310	$	(363,411)

The percent change in the Company’s sales by segment and product category for the three months ended ~~August 1,~~October 31, 2020 compared to the three months ended ~~August 3,~~November 2, 2019 as well as the sales percentage by segment and product category to total net sales for the three months ended ~~August 1,~~October 31, 2020 are as follows:


		% Change 2020 - 2019		%��of Net Sales			% Change 2020 - 2019		% of Net Sales
Retail operations segment	Retail operations segment					Retail operations segment
Cosmetics	Cosmetics	(29.1)	%	14	%	Cosmetics	(20.4)	%	14	%
Ladies’ apparel	Ladies’ apparel	(45.1)		21		Ladies’ apparel	(38.3)		20
Ladies’ accessories and lingerie	Ladies’ accessories and lingerie	(31.1)		16		Ladies’ accessories and lingerie	(15.9)		15
Juniors’ and children’s apparel	Juniors’ and children’s apparel	(29.4)		9		Juniors’ and children’s apparel	(24.4)		10
Men’s apparel and accessories	Men’s apparel and accessories	(31.7)		20		Men’s apparel and accessories	(24.7)		18
Shoes	Shoes	(40.5)		13		Shoes	(25.2)		16
Home and furniture	Home and furniture	(16.4)		4		Home and furniture	(3.5)		4
				97					97
Construction segment	Construction segment	(47.0)		3		Construction segment	(44.0)		3
Total	Total			100	%	Total			100	%

Table of Contents

Net sales from the retail operations segment decreased ~~35.2%~~$339.6 million during the three months ended ~~August 1,~~October 31, 2020 compared to the three months ended ~~August 3,~~November 2, 2019, decreasing approximately 25% in total and approximately 24% in comparable stores, primarily due to the impact of the COVID-19 pandemic. ~~The Company reported no comparable store sales data for the quarter due to the temporary closure of its brick-and-mortar stores as well as the interdependence between in-store and online sales.~~ Sales in all product categories decreased significantly over the ~~second~~third quarter last ~~year.~~year with the exception of home and furniture, which decreased moderately.

We recorded a return asset of ~~$8.4~~$7.5 million and ~~$13.0~~$11.1 million and an allowance for sales returns of ~~$10.8~~$12.5 million and ~~$19.0~~$17.8 million as of ~~August 1,~~October 31, 2020 and ~~August 3,~~November 2, 2019, respectively.

During the three months ended ~~August 1,~~October 31, 2020, net sales from the construction segment decreased ~~$22.9~~$23.8 million or ~~47%~~44.0% compared to the three months ended ~~August 3,~~November 2, 2019 due to a decrease in construction activity. The remaining performance obligations related to executed construction contracts totaled ~~$127.0~~$97.2 million as of ~~August 1,~~October 31, 2020 decreasing approximately ~~19%~~38% from February 1, 2020 and increasing approximately ~~17%~~35% from ~~August 3,~~November 2, 2019, respectively. We expect these remaining performance obligations to be earned over the next nine to eighteen months.


		Six Months Ended									Nine Months Ended
(in thousands of dollars)	(in thousands of dollars)	August 1, 2020		August 3, 2019		$ Change		(in thousands of dollars)	October 31, 2020		November 2, 2019		$ Change
Net sales:	Net sales:							Net sales:
Retail operations segment	Retail operations segment	$	1,644,243	$	2,798,685	$	(1,154,442)	Retail operations segment	$	2,638,831	$	4,132,890	$	(1,494,059)
Construction segment	Construction segment	61,456		93,619		(32,163)		Construction segment	91,767		147,724		(55,957)
Total net sales	Total net sales	$	1,705,699	$	2,892,304	$	(1,186,605)	Total net sales	$	2,730,598	$	4,280,614	$	(1,550,016)

The percent change in the Company’s sales by segment and product category for the ~~six~~nine months ended ~~August 1,~~October 31, 2020 compared to the ~~six~~nine months ended ~~August 3,~~November 2, 2019 as well as the sales percentage by segment and product category to total net sales for the ~~six~~nine months ended ~~August 1,~~October 31, 2020 are as follows:


		% Change 2020 - 2019		% of Net Sales			% Change 2020 - 2019		% of Net Sales
Retail operations segment	Retail operations segment					Retail operations segment
Cosmetics	Cosmetics	(35.0)	%	14	%	Cosmetics	(30.2)	%	14	%
Ladies’ apparel	Ladies’ apparel	(48.7)		21		Ladies’ apparel	(45.4)		21
Ladies’ accessories and lingerie	Ladies’ accessories and lingerie	(38.1)		16		Ladies’ accessories and lingerie	(31.3)		15
Juniors’ and children’s apparel	Juniors’ and children’s apparel	(41.3)		9		Juniors’ and children’s apparel	(35.7)		10
Men’s apparel and accessories	Men’s apparel and accessories	(38.7)		18		Men’s apparel and accessories	(34.2)		18
Shoes	Shoes	(43.4)		14		Shoes	(37.4)		15
Home and furniture	Home and furniture	(28.0)		4		Home and furniture	(19.7)		4
				96					97
Construction segment	Construction segment	(34.4)		4		Construction segment	(37.9)		3
Total	Total			100	%	Total			100	%

Net sales from the retail operations segment decreased ~~41.2%~~$1.5 billion, or approximately 36% during the ~~six~~nine months ended ~~August 1,~~October 31, 2020 compared to the ~~six~~nine months ended ~~August 3,~~November 2, 2019 primarily due to the impact of the COVID-19 pandemic. The Company reported no comparable store sales data for the period due to the temporary closure of its brick-and-mortar stores as well as the interdependence between in-store and online sales. Sales in all product categories decreased significantly during the ~~six~~nine months ended ~~August 1,~~October 31, 2020 compared to the ~~six~~nine months ended ~~August 3,~~November 2, 2019.

~~Storewide sales penetration of exclusive brand merchandise for~~During the ~~six~~nine months ended ~~August 1,~~October 31, 2020, ~~and August 3,~~net sales from the construction segment decreased $56.0 million or approximately 38% compared to the nine months ended November 2, 2019 ~~was 20.8% and 21.2%, respectively.~~

due to a decrease in construction activity.

Table of Contents

During the six months ended August 1, 2020, net sales from the construction segment decreased $32.2 million or 34.4% compared to the six months ended August 3, 2019 due to a decrease in construction activity.

Service Charges and Other Income


		Three Months Ended						Six Months Ended							Three Months			Six Months			Three Months Ended				Nine Months Ended				Three Months	Nine Months
(in thousands of dollars)	(in thousands of dollars)	August 1, 2020		August 3, 2019		August 1, 2020		August 3, 2019		$ Change 2020-2019		$ Change 2020-2019		(in thousands of dollars)		October 31, 2020			November 2, 2019		October 31, 2020		November 2, 2019		$ Change 2020-2019		$ Change 2020-2019
Service charges and other income:	Service charges and other income:													Service charges and other income:
Retail operations segment	Retail operations segment													Retail operations segment
Income from Wells Fargo Alliance	Income from Wells Fargo Alliance	$	14,685	$	21,194	$	35,486	$	42,340	$	(6,509)	$	(6,854)	Income from Wells Fargo Alliance		$	16,472		$	23,879	$	51,958	$	66,219	$	(7,407)	$	(14,261)
Shipping and handling income	Shipping and handling income	8,657		6,160		20,224		12,237		2,497		7,987		Shipping and handling income		7,917			6,670		28,140		18,908		1,247		9,232
Leased department income	Leased department income	491		1,087		862		2,209		(596)		(1,347)		Leased department income		212			993		1,075		3,202		(781)		(2,127)
Other	Other	2,291		2,772		4,039		6,122		(481)		(2,083)		Other		2,562			2,482		6,600		8,604		80		(2,004)
		26,124		31,213		60,611		62,908		(5,089)		(2,297)				27,163			34,024		87,773		96,933		(6,861)		(9,160)
Construction segment	Construction segment	15		769		449		1,568		(754)		(1,119)		Construction segment		50			1,325		500		2,892		(1,275)		(2,392)
Total service charges and other income	Total service charges and other income	$	26,139	$	31,982	$	61,060	$	64,476	$	(5,843)	$	(3,416)	Total service charges and other income		$	27,213		$	35,349	$	88,273	$	99,825	$	(8,136)	$	(11,552)

Service charges and other income is composed primarily of income from the Wells Fargo Alliance. Income from the alliance decreased during the three and ~~six~~nine months ended ~~August 1,~~October 31, 2020 compared to the three and ~~six~~nine months ended ~~August 3,~~November 2, 2019 primarily due to decreases in finance charges. Shipping and handling income increased during the three and ~~six~~nine months ended ~~August 1,~~October 31, 2020 compared to the three and ~~six~~nine months ended ~~August 3,~~November 2, 2019 primarily due to the increase in online orders and ship-from-store capabilities.

Leased department income consisted primarily of commissions from a principal licensed department of an upscale women's apparel vendor located in certain stores. By ~~August 1,~~the end of July 2020, our agreement with this principal licensed department had been terminated. We expect future leased department income to be minimal.

Gross Profit


(in thousands of dollars)	(in thousands of dollars)	August 1, 2020		August 3, 2019		$ Change		% Change		(in thousands of dollars)	October 31, 2020		November 2, 2019		$ Change		% Change
Gross profit:	Gross profit:									Gross profit:
Three months ended	Three months ended									Three months ended
Retail operations segment	Retail operations segment	$	277,407	$	395,137	$	(117,730)	(29.8)	%	Retail operations segment	$	364,232	$	460,549	$	(96,317)	(20.9)	%
Construction segment	Construction segment	1,790		(288)		2,078		721.5		Construction segment	1,983		979		1,004		102.6
Total gross profit	Total gross profit	$	279,197	$	394,849	$	(115,652)	(29.3)	%	Total gross profit	$	366,215	$	461,528	$	(95,313)	(20.7)	%

Six months ended
Nine months ended										Nine months ended
Retail operations segment	Retail operations segment	$	373,441	$	931,508	$	(558,067)	(59.9)	%	Retail operations segment	$	737,673	$	1,392,057	$	(654,384)	(47.0)	%
Construction segment	Construction segment	3,942		1,015		2,927		288.4		Construction segment	5,925		1,994		3,931		197.1
Total gross profit	Total gross profit	$	377,383	$	932,523	$	(555,140)	(59.5)	%	Total gross profit	$	743,598	$	1,394,051	$	(650,453)	(46.7)	%


		Three Months Ended						Six Months Ended							Three Months Ended				Nine Months Ended
		August 1, 2020		August 3, 2019		August 1, 2020		August 3, 2019			October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019
Gross profit as a percentage of segment net sales:	Gross profit as a percentage of segment net sales:									Gross profit as a percentage of segment net sales:
Retail operations segment	Retail operations segment	31.1	%	28.7	%	22.7	%	33.3	%	Retail operations segment	36.6	%	34.5	%	28.0	%	33.7	%
Construction segment	Construction segment	6.9		(0.6)		6.4		1.1		Construction segment	6.5		1.8		6.5		1.3
Total gross profit as a percentage of net sales	Total gross profit as a percentage of net sales	30.4		27.7		22.1		32.2		Total gross profit as a percentage of net sales	35.7		33.2		27.2		32.6

Gross profit, as a percentage of sales, increased to ~~30.4%~~35.7% from ~~27.7%~~33.2% during the three months ended ~~August 1,~~October 31, 2020 compared to the three months ended ~~August 3,~~November 2, 2019, respectively.

Table of Contents

Gross profit from retail operations, as a percentage of sales, increased to ~~31.1%~~36.6% from ~~28.7%~~34.5% during the three months ended ~~August 1,~~October 31, 2020 compared to the three months ended ~~August 3,~~November 2, 2019 primarily due to decreased markdowns. Gross margin increased significantly in ladies' accessories and lingerie and home and furniture. Gross margin increased moderately in ladies' apparel, men's apparel and accessories, junior's and children's apparel and ~~home and furniture.~~shoes. Gross margin ~~decreased slightly~~was essentially flat in ~~cosmetics, decreased moderately in shoes and decreased significantly in ladies' apparel.~~cosmetics.

Gross profit from the construction segment increased ~~752~~473 basis points of construction sales for the three months ended ~~August 1,~~October 31, 2020 compared to the three months ended ~~August 3,~~November 2, 2019, respectively.

Gross profit, as a percentage of sales, decreased to ~~22.1%~~27.2% from ~~32.2%~~32.6% during the ~~six~~nine months ended ~~August 1,~~October 31, 2020 compared to the ~~six~~nine months ended ~~August 3,~~November 2, 2019.

Gross profit from retail operations, as a percentage of sales, decreased to ~~22.7%~~28.0% from ~~33.3%~~33.7% during the ~~six~~nine months ended ~~August 1,~~October 31, 2020 compared to the ~~six~~nine months ended ~~August 3,~~November 2, 2019 primarily due to increased markdowns taken as a result of the impact of the COVID-19 pandemic. Gross margin decreased significantly in ladies' apparel ~~shoes,~~and shoes. Gross margin decreased moderately in men's apparel and accessories and junior's and children's ~~apparel.~~apparel, while decreasing slightly in cosmetics. Gross margin ~~decreased~~increased moderately ~~in cosmetics while remaining essentially flat~~ in ladies' accessories and ~~lingerie. Gross margin increased~~lingerie, while increasing significantly in home and furniture.

Gross profit from the construction segment increased ~~533~~511 basis points of construction sales for the ~~six~~nine months ended ~~August 1,~~October 31, 2020 compared to the ~~six~~nine months ended ~~August 3,~~November 2, 2019, respectively.

Inventory decreased ~~20%~~22% in total as of ~~August 1,~~October 31, 2020 compared to ~~August 3,~~November 2, 2019. A 1% change in the dollar amount of markdowns would have impacted the net loss by approximately $2$1 million and $4$5 million for the three and ~~six~~nine months ended ~~August 1,~~October 31, 2020, respectively.

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


(in thousands of dollars)	(in thousands of dollars)	August 1, 2020		August 3, 2019		$ Change		% Change		(in thousands of dollars)	October 31, 2020		November 2, 2019		$ Change		% Change
SG&A:	SG&A:									SG&A:
Three months ended	Three months ended									Three months ended
Retail operations segment	Retail operations segment	$	265,801	$	407,589	$	(141,788)	(34.8)	%	Retail operations segment	$	316,738	$	416,707	$	(99,969)	(24.0)	%
Construction segment	Construction segment	1,261		1,536		(275)		(17.9)		Construction segment	1,480		1,442		38		2.6
Total SG&A	Total SG&A	$	267,062	$	409,125	$	(142,063)	(34.7)	%	Total SG&A	$	318,218	$	418,149	$	(99,931)	(23.9)	%

Six months ended
Nine months ended										Nine months ended
Retail operations segment	Retail operations segment	$	554,358	$	810,881	$	(256,523)	(31.6)	%	Retail operations segment	$	871,096	$	1,227,588	$	(356,492)	(29.0)	%
Construction segment	Construction segment	3,150		3,404		(254)		(7.5)		Construction segment	4,630		4,846		(216)		(4.5)
Total SG&A	Total SG&A	$	557,508	$	814,285	$	(256,777)	(31.5)	%	Total SG&A	$	875,726	$	1,232,434	$	(356,708)	(28.9)	%


		Three Months Ended						Six Months Ended							Three Months Ended				Nine Months Ended
		August 1, 2020		August 3, 2019		August 1, 2020		August 3, 2019			October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019
SG&A as a percentage of segment net sales:	SG&A as a percentage of segment net sales:									SG&A as a percentage of segment net sales:
Retail operations segment	Retail operations segment	29.8	%	29.6	%	33.7	%	29.0	%	Retail operations segment	31.8	%	31.2	%	33.0	%	29.7	%
Construction segment	Construction segment	4.9		3.2		5.1		3.6		Construction segment	4.9		2.7		5.0		3.3
Total SG&A as a percentage of net sales	Total SG&A as a percentage of net sales	29.1		28.7		32.7		28.2		Total SG&A as a percentage of net sales	31.0		30.1		32.1		28.8

SG&A decreased by ~~$142.1~~$99.9 million and increased 3993 basis points of net sales during the three months ended ~~August 1,~~October 31, 2020 compared to the three months ended ~~August 3,~~November 2, 2019. SG&A from retail operations decreased by ~~$141.8~~$100.0 million and increased 1962 basis points of net sales during the three months ended ~~August 1,~~October 31, 2020 compared to the three months ended ~~August 3,~~November 2, 2019. The decrease in SG&A dollars was realized across all SG&A categories; however, it was primarily due to decreases in payroll expense. Payroll expense and related payroll taxes for the three months ended ~~August 1,~~October 31, 2020 was ~~$155.9~~$207.5 million compared to ~~$262.7~~$288.6 million for the three months ended ~~August 3,~~November 2, 2019, a decline of ~~41%.~~

28.1%, which was driven by retail store locations operating at reduced hours, which required fewer sales associates.

Table of Contents

SG&A decreased by ~~$256.8~~$356.7 million and increased ~~454~~328 basis points of net sales during the ~~six~~nine months ended ~~August 1,~~October 31, 2020 compared to the ~~six~~nine months ended ~~August 3,~~November 2, 2019. SG&A from retail operations decreased by ~~$256.5~~$356.5 million and increased ~~475~~331 basis points of net sales during the ~~six~~nine months ended ~~August 1,~~October 31, 2020 compared to the ~~six~~nine months ended ~~August 3,~~November 2, 2019. The decrease in SG&A dollars was realized across all SG&A categories; however, the decrease was primarily due to decreases in payroll expense.

Payroll expense and related payroll taxes for the ~~six~~nine months ended ~~August 1,~~October 31, 2020 was ~~$324.4~~$560.1 million compared to ~~$520.2~~$854.0 million for the ~~six~~nine months ended ~~August 3,~~November 2, 2019, a decline of ~~38%~~34.4%. The Company furloughed store associates as stores closed due to the COVID-19 ~~pandemic. Additionally,~~pandemic, and furlough actions were also implemented in certain corporate and support facility functions. Stores then re-opened at reduced operating hours, requiring fewer sales associates. During the ~~six~~nine months ended ~~August 1,~~October 31, 2020, the Company was also able to reduce payroll expense and related benefits by $6.1 million through the employee retention credit available under the CARES Act.

Depreciation and Amortization


(in thousands of dollars)	(in thousands of dollars)	August 1, 2020		August 3, 2019		$ Change		% Change		(in thousands of dollars)	October 31, 2020		November 2, 2019		$ Change		% Change
Depreciation and amortization:	Depreciation and amortization:									Depreciation and amortization:
Three months ended	Three months ended									Three months ended
Retail operations segment	Retail operations segment	$	50,784	$	54,207	$	(3,423)	(6.3)	%	Retail operations segment	$	53,290	$	55,963	$	(2,673)	(4.8)	%
Construction segment	Construction segment	167		176		(9)		(5.1)		Construction segment	87		180		(93)		(51.7)
Total depreciation and amortization	Total depreciation and amortization	$	50,951	$	54,383	$	(3,432)	(6.3)	%	Total depreciation and amortization	$	53,377	$	56,143	$	(2,766)	(4.9)	%

Six months ended
Nine months ended										Nine months ended
Retail operations segment	Retail operations segment	$	101,516	$	106,401	$	(4,885)	(4.6)	%	Retail operations segment	$	154,806	$	162,364	$	(7,558)	(4.7)	%
Construction segment	Construction segment	336		346		(10)		(2.9)		Construction segment	423		526		(103)		(19.6)
Total depreciation and amortization	Total depreciation and amortization	$	101,852	$	106,747	$	(4,895)	(4.6)	%	Total depreciation and amortization	$	155,229	$	162,890	$	(7,661)	(4.7)	%

Depreciation and amortization expense decreased ~~$3.4~~$2.8 million and ~~$4.9~~$7.7 million during the three and ~~six~~nine months ended ~~August 1,~~October 31, 2020 compared to the three and ~~six~~nine months ended ~~August 3,~~November 2, 2019, primarily due to the timing and composition of capital expenditures.

Interest and Debt Expense, Net


(in thousands of dollars)	(in thousands of dollars)	August 1, 2020		August 3, 2019		$ Change		% Change		(in thousands of dollars)	October 31, 2020		November 2, 2019		$ Change		% Change
Interest and debt expense (income), net:	Interest and debt expense (income), net:									Interest and debt expense (income), net:
Three months ended	Three months ended									Three months ended
Retail operations segment	Retail operations segment	$	12,885	$	12,278	$	607	4.9	%	Retail operations segment	$	12,167	$	11,562	$	605	5.2	%
Construction segment	Construction segment	(12)		(30)		18		60.0		Construction segment	(5)		(26)		21		80.8
Total interest and debt expense, net	Total interest and debt expense, net	$	12,873	$	12,248	$	625	5.1	%	Total interest and debt expense, net	$	12,162	$	11,536	$	626	5.4	%

Six months ended
Nine months ended										Nine months ended
Retail operations segment	Retail operations segment	$	25,176	$	23,542	$	1,634	6.9	%	Retail operations segment	$	37,343	$	35,104	$	2,239	6.4	%
Construction segment	Construction segment	(33)		(57)		24		42.1		Construction segment	(38)		(83)		45		54.2
Total interest and debt expense, net	Total interest and debt expense, net	$	25,143	$	23,485	$	1,658	7.1	%	Total interest and debt expense, net	$	37,305	$	35,021	$	2,284	6.5	%

Net interest and debt expense increased $0.6 million ~~and $1.7 million~~ during the three ~~and six~~ months ended ~~August 1,~~October 31, 2020 compared to the three ~~and six months~~ ended ~~August 3,~~November 2, 2019 ~~respectively,~~ primarily due to an increase in fees associated with the amendment of the credit facility. Net interest and debt expense increased $2.3 million during the nine ended October 31, 2020 compared to the nine months ended November 2, 2019 primarily due to an increase in short term borrowings under the credit facility. Total weighted average debt increased by ~~$87.3~~$10.3 million and ~~$162.6~~$111.8 million during the three and ~~six~~nine months ended ~~August 1,~~October 31, 2020, respectively, compared to the three and ~~six~~nine months ended ~~August 3,~~November 2, 2019 primarily due to the increase of short term borrowings.

Table of Contents

Loss (Gain) on Disposal of Assets


(in thousands of dollars)	(in thousands of dollars)	August 1, 2020		August 3, 2019		$ Change		(in thousands of dollars)	October 31, 2020		November 2, 2019		$ Change
Loss (gain) on disposal of assets:	Loss (gain) on disposal of assets:							Loss (gain) on disposal of assets:
Three months ended	Three months ended							Three months ended
Retail operations segment	Retail operations segment	$	45	$	(4,899)	$	4,944	Retail operations segment	$	2,234	$	303	$	1,931
Construction segment	Construction segment	(12)		(1)		(11)		Construction segment	(13)		1		(14)
Total loss (gain) on disposal of assets	Total loss (gain) on disposal of assets	$	33	$	(4,900)	$	4,933	Total loss (gain) on disposal of assets	$	2,221	$	304	$	1,917

Six months ended
Nine months ended								Nine months ended
Retail operations segment	Retail operations segment	$	27	$	(12,299)	$	12,326	Retail operations segment	$	2,261	$	(11,997)	$	14,258
Construction segment	Construction segment	(13)		(1)		(12)		Construction segment	(26)		1		(27)
Total loss (gain) on disposal of assets	Total loss (gain) on disposal of assets	$	14	$	(12,300)	$	12,314	Total loss (gain) on disposal of assets	$	2,235	$	(11,996)	$	14,231

During the three and nine months ended ~~August 3, 2019,~~October 31, 2020, the Company recorded proceeds of ~~$8.6~~$1.5 million primarily from the sale of one store ~~location in Cary, North Carolina,~~property, resulting in a ~~gain~~loss of ~~$4.9~~$2.2 million that was recorded in loss (gain) on disposal of assets.

During the ~~six~~three months ended ~~August 3,~~November 2, 2019, the Company recorded a loss of $0.3 million primarily from the sale of one store property. that was recorded in loss (gain) on disposal of assets.

During the nine months ended November 2, 2019, the Company recorded proceeds of $22.0 million primarily from the sale of three store ~~locations in Cary, North Carolina, Boardman, Ohio and Boynton Beach, Florida,~~properties, resulting in a gain of ~~$12.3~~$12.0 million that was recorded in loss (gain) on disposal of assets.

Income Taxes

The Company expects to be in a net operating loss position for the fiscal year. The CARES Act, signed into law on March 27, 2020, allows for net operating loss carryback to years in which the statutory federal tax rate was 35% rather than the current 21%. The Company’s estimated federal and state effective income tax rate was approximately ~~74.3% and 34.8%~~46.9% for the ~~three and six~~nine months ended ~~August 1, 2020, respectively.~~October 31, 2020. During the three and ~~six~~nine months ended ~~August 1,~~October 31, 2020, income tax benefit differed from what would be computed using the current statutory federal tax rate of 21% primarily due to the recognition of a net tax benefit of ~~$17.4~~$32.4 million and ~~$32.1~~$64.6 million, respectively, related to the rate differential in the carryback year including its impact on changes in estimates of temporary differences for the current and prior year. Income tax benefit for the three and ~~six~~nine months also included the effects of federal tax credits and state and local income taxes.

The Company’s estimated federal and state effective income tax rate was approximately ~~22.0%~~-88.2% and 15.8% for the three and ~~six~~nine months ended ~~August 3, 2019.~~November 2, 2019, respectively. During the three and ~~six~~nine months ended ~~August 3,~~November 2, 2019, income taxes differed from what would be computed using the statutory federal tax rate primarily due to the effects of federal tax credits and state and local income taxes which included tax benefits recognized of approximately $2.8 million for amended state income tax return filings and related decreases to accrued state income taxes.

Due to uncertainty relating to the impacts of COVID-19 on the Company’s business operations, the Company is not providing an expected fiscal 2020 federal and state effective income tax rate.

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FINANCIAL CONDITION

A summary of net cash flows for the ~~six~~nine months ended ~~August 1,~~October 31, 2020 and ~~August 3,~~November 2, 2019 follows:


		Six Months Ended									Nine Months Ended
(in thousands of dollars)	(in thousands of dollars)	August 1, 2020		August 3, 2019		$ Change		(in thousands of dollars)	October 31, 2020		November 2, 2019		$ Change
Operating Activities	Operating Activities	$	(294,509)	$	(18,580)	$	(275,929)	Operating Activities	$	(62,938)	$	22,984	$	(85,922)
Investing Activities	Investing Activities	(38,084)		(15,547)		(22,537)		Investing Activities	(50,352)		(47,534)		(2,818)
Financing Activities	Financing Activities	138,384		45,876		92,508		Financing Activities	(102,663)		(11,427)		(91,236)
Total (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash		$	(194,209)	$	11,749	$	(205,958)
Total Decrease in Cash, Cash Equivalents and Restricted Cash								Total Decrease in Cash, Cash Equivalents and Restricted Cash	$	(215,953)	$	(35,977)	$	(179,976)

Net cash flows from operations decreased ~~$275.9~~$85.9 million during the ~~six~~nine months ended ~~August 1,~~October 31, 2020 compared to the ~~six~~nine months ended ~~August 3,~~November 2, 2019 due to significant decreases in net income, primarily due to decreases in sales, and changes in working capital.

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The Company took a number of actions to enhance liquidity during the ~~six~~nine months ended ~~August 1,~~October 31, 2020 as the COVID-19 pandemic progressed, including the following:

▪Extended vendor payment terms during the first quarter but restored most vendors to standard payment terms by August 1, 2020

▪Canceled, suspended and significantly delayed merchandise shipments

▪Reduced merchandise purchases during the first, second and ~~second~~third quarters by 33%, 62% and ~~62%~~31%, respectively

▪Reviewed and reduced discretionary operating and capital expenditures

▪Reduced payroll expense

▪Executed aggressive promotional markdowns to clear inventory

Wells Fargo owns and manages the Dillard's private label 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 received from 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. The Wells Fargo Alliance expires in fiscal 2024.

The Company received income of ~~$35.5~~$52.0 million and ~~$42.3~~$66.2 million from the Wells Fargo Alliance during the ~~six~~nine months ended ~~August 1,~~October 31, 2020 and ~~August 3,~~November 2, 2019, respectively. The Company is unable to quantify the impact of the COVID-19 pandemic on the portfolio's earnings and the on-going cash compensation from the Wells Fargo Alliance.

During the nine months ended October 31, 2020, the Company received proceeds from insurance of $8.7 million for claims filed for merchandise losses related to storm damage incurred at two stores.

Capital expenditures were ~~$38.6~~$52.1 million and ~~$38.0~~$70.9 million for the ~~six~~nine months ended ~~August 1,~~October 31, 2020 and ~~August 3,~~November 2, 2019, respectively. The capital expenditures were primarily related to equipment purchases and the remodeling of existing stores during the current year.

During the ~~six~~nine months ended ~~August 3,~~October 31, 2020, the Company received cash proceeds of $1.5 million and recorded a related loss of $2.2 million, primarily for the sale of one store property in Slidell, Louisiana.

During the nine months ended November 2, 2019, the Company received cash proceeds of $22.0 million and recorded a related gain of ~~$12.3~~$12.0 million for the sale of three store locations in Boardman, Ohio, Boynton Beach, Florida and Cary, North Carolina. The proceeds from the ~~Boardman, Ohio store and~~ Cary, North Carolina store ~~sales~~sale were being held in escrow for the acquisition of replacement property under a like-kind exchange ~~agreements.~~agreement. The escrow ~~accounts were~~account was administered by an intermediary. Pursuant to the ~~like-kind~~like-

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kind exchange ~~agreements,~~agreement, the cash was restricted for a maximum of 180 days from the date of the property sale pending the acquisition of replacement property. As of ~~August 3,~~November 2, 2019, the acquisitions of a replacement ~~properties~~property had not yet occurred; therefore, the proceeds were classified as restricted cash on the condensed consolidated balance sheet. The proceeds from the Boardman, Ohio store sale were previously held in escrow prior to the acquisition of the replacement property at Columbia Mall in Columbia, Missouri during the third quarter of fiscal 2019.

During the ~~six~~nine months ended ~~August 1,~~October 31, 2020, the Company opened an 85,000 square foot expansion at Columbia Mall in Columbia, Missouri (dual-anchor location totaling 185,000 square feet). Additionally, the Company replaced a 100,000 square foot leased facility at Richland Fashion Mall in Waco, Texas with a 125,000 square foot owned facility (dual-anchor location totaling 190,000 square feet).

During the ~~six~~nine months ended ~~August 1,~~October 31, 2020, we permanently closed the locations at Central Mall in Lawton, Oklahoma (100,000 square feet); Crossroads Center in Waterloo, Iowa (150,000 square feet); and North Plains Mall in Clovis, New Mexico (62,000 square feet). We announced the upcoming closure of the Paradise Valley Mall location in Phoenix, Arizona (200,000 square feet). We remain committed to closing under-performing stores where appropriate and may incur future closing costs related to such stores when they close.

The Company had cash on hand of ~~$82.9~~$61.1 million as of ~~August 1,~~October 31, 2020. As part of our overall liquidity management strategy and for peak working capital requirements, the Company maintained an unsecured credit facility that provided a borrowing capacity of $800 million with a $200 million expansion option ("credit agreement") until the credit agreement was amended in April 2020 (the "amended credit agreement"). After giving effect to the amendment, the amended credit agreement became secured by certain deposit accounts of the Company and certain inventory of certain subsidiaries. The amended 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 rate of interest on borrowings under the amended credit agreement is the greater of LIBOR or 1.0%

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plus 1.750%, and the commitment fee for unused borrowings is 0.30% per annum. So long as availability exceeds $100 million and no event of default occurs and is continuing, there are no financial covenant requirements under the amended credit agreement. The Company paid ~~$3.0~~$3.2 million in issuance costs related to the amended credit agreement, which were recorded in other assets on the condensed consolidated balance sheet.

As part of the Company's liquidity strategy during the COVID-19 pandemic, in March 2020, the Company borrowed $779 million under the credit agreement, which was repaid concurrent with the execution of the amended credit agreement. At ~~August 1,~~October 31, 2020, borrowings of ~~$229.6~~$15.0 million were outstanding, and letters of credit totaling ~~$21.0~~$21.1 million were issued under the amended credit agreement leaving unutilized availability under the credit facility of ~~$447.0~~$763.9 million. The weighted average interest rate under the credit agreement for the borrowings outstanding at ~~August 1,~~October 31, 2020 was 2.75%.

During the ~~six~~nine months ended ~~August 1,~~October 31, 2020, the Company repurchased ~~1.6~~2.2 million shares of Class A Common Stock at an average price of ~~$47.99~~$42.83 per share for ~~$76.1~~$95.6 million ~~(including the accrual of $3.0 million of share repurchases that had not settled as of August 1, 2020)~~ under the Company's March 2018 Plan. Additionally, the Company paid $7.3 million for share repurchases that had not yet settled but were accrued at February 1, 2020. During the ~~six~~nine months ended ~~August 3,~~November 2, 2019, the Company repurchased ~~1.1~~1.7 million shares of Class A Common Stock at an average price of ~~$62.27~~$60.96 per share for ~~$66.3~~$101.5 million under the Company's March 2018 Plan. At ~~August 1,~~October 31, 2020, ~~$192.6~~$173.1 million of authorization remained under the March 2018 Plan. The ultimate disposition of the repurchased stock has not been determined.

The COVID-19 pandemic has had a significant negative effect on the Company's liquidity and net sales. Due to heightened uncertainty relating to the impacts of COVID-19 on the Company’s business operations, including the duration and impact on overall customer demand, our liquidity, net sales and profitability may be further impacted if we are unable to appropriately manage our inventory levels and expenses.

The Company expects to finance its operations during fiscal 2020 from cash on hand, cash flows generated from operations and utilization of the credit facility. Depending upon our actual and anticipated sources and uses of liquidity, the Company will from time to time consider other possible financing transactions, the proceeds of which could be used to 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 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 February 1, 2020.

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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.

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NEW ACCOUNTING STANDARDS

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

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,” “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 2020 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 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) the COVID-19 pandemic and its effects on public health, our supply chain, the health and well-being of our employees and customers, and the retail industry in general; other general retail industry conditions and macro-economic conditions; economic and weather conditions for regions in which the Company’s stores are located and the effect of these factors on the buying patterns of the Company’s customers, including the effect of changes in prices and availability of oil and natural gas; the availability of 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 consumer spending patterns, debt levels and their ability to meet credit obligations; changes in tax legislation; changes in legislation, affecting such matters as the cost of employee benefits or credit card income; adequate and stable availability and pricing of materials, production facilities and labor from which the Company sources its 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 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; other epidemic, pandemic or public health issues; potential disruption of international trade and supply chain efficiencies; any government-ordered restrictions on the movement of the general public or the mandated or voluntary closing of retail stores in response to the COVID-19 pandemic; world conflict and the possible impact on consumer spending patterns and other economic and demographic changes of similar or dissimilar nature. The Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended February 1, 2020, contain other information on factors that may affect financial results or cause actual results to differ materially from forward-looking statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in the information set forth under caption “Item 7A-Quantitative and Qualitative Disclosures About Market Risk” in the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2020.

Item 4. Controls and 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.

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There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended ~~August 1,~~October 31, 2020 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal 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 ~~September~~December 4, 2020, 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

"Item 1A, Risk Factors" in our Annual Report on Form 10-K for the year ended February 1, 2020, as filed with the Securities Exchange Commission on March 31, 2020 includes a discussion of our risk factors. The information presented below updates, and should be read in conjunction with, the risk factors disclosed in our Annual Report on Form 10-K. The effects of the events and circumstances described in the following risk factor may have the additional effect of heightening many of the risks noted in our Annual Report on Form 10-K. Otherwise, except as presented below, there have been no material changes to the risk factors disclosed in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended February 1, 2020, as filed with the Securities Exchange Commission on March 31, 2020.

The COVID-19 pandemic and its effects on public health, our supply chain, the health and well-being of our employees and customers, and the retail industry in general, has had, and could continue to have, a material adverse effect on our business, financial condition and results of operations.

In December 2019, a strain of coronavirus, now known as COVID-19, was reported to have surfaced in Wuhan, China. Since that time, the virus has rapidly spread to other countries around the world, including the United States. In response to the pandemic, national and local governments, including those in the regions in which we operate, have taken various measures to attempt to slow the spread of the virus, including travel bans; prohibitions on group events and large gatherings; extended shutdowns of schools, government offices and certain businesses; curfews and recommendations to practice “social distancing.” Accordingly, the Company began closing its stores on March 19, 2020, and all ~~285~~brick-and-mortar store locations were temporarily closed to the public by April 9, 2020.

The Company ~~has~~had reopened all stores as of June 2, 2020. Stores are operating at reduced hours and implementing certain safety measures to ensure the safety of our customers and associates, which may have the effect of discouraging shopping or limiting the occupancy of our stores. These measures, and any additional measures that have been and may continue to be taken in response to the COVID-19 pandemic, have substantially decreased and may continue to decrease, the number of customers that visit our stores and the shopping malls in which our stores are located, which has had, and will likely continue to have a material adverse effect on our business, financial condition and results of operations. All stores are currently open and operating at reduced hours. A very small number of our locations were temporarily closed to in-store shopping due to government mandate. Other local mandates throughout the country require occupancy limits with which we are required to comply. At this time, it is unclear how long these measures may remain in place, what additional measures may be imposed, or when our operations will be restored to the levels that existed prior to the COVID-19 pandemic. A recent surge in reported cases and hospitalizations in the U.S. could result in additional mandated business closures.

In addition, our business depends on consumer discretionary spending, and as such, our results are particularly sensitive to economic conditions and consumer confidence. COVID-19 has significantly impacted economic conditions, resulting in, among other things, unprecedented increases in the number of people seeking jobless benefits and a significant decline in global financial markets. As a result, even when all of our store locations are fully operational, there can be no guarantee that our revenue will return to its pre-COVID-19 levels.

The Company sources a significant portion of its private label and exclusive brand merchandise from countries that have experienced widespread transmission of the virus, including China. Additionally, many of the Company’s branded merchandise vendors may also source a significant portion of their merchandise from these same countries. Manufacturing capacity in those countries has been materially impacted by the pandemic, which has negatively impacted our supply chain. If this continues, we cannot guarantee that we will be able to locate alternative sources of supply for our merchandise on acceptable terms, or at all. If we are unable to adequately source our merchandise or purchase appropriate amounts of merchandise from branded vendors, our business and results of operations may be materially and adversely affected.

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Additionally, in the event that the Company were to experience widespread transmission of the virus at one or more of the Company’s stores or other facilities, the Company could suffer reputational harm or other potential liability. Further, the

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Company’s business operations may be materially and adversely affected if a significant number of the Company’s employees are impacted by the ~~virus~~virus.

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


Issuer Purchases of Equity Securities	Issuer Purchases of Equity Securities													Issuer Purchases of Equity Securities
Period	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		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

May 3, 2020 through May 30, 2020		—	$	—	—	$	206,852,235
May 31, 2020 through July 4, 2020		—	—		—	206,852,235
July 5, 2020 through August 1, 2020		586,851	24.31		586,851	192,584,114
August 2, 2020 through August 29, 2020								August 2, 2020 through August 29, 2020	265,985	$	26.94	265,985	$	185,419,113
August 30, 2020 through October 3, 2020								August 30, 2020 through October 3, 2020	379,299	32.41		379,299	173,124,594
October 4, 2020 through October 31, 2020								October 4, 2020 through October 31, 2020	—	—		—	173,124,594
Total	Total	586,851	$	24.31	586,851	$	192,584,114	Total	645,284	$	30.16	645,284	$	173,124,594

In March 2018, the Company's Board of Directors authorized the repurchase of up to $500 million of the Company's Class A Common Stock under an open-ended stock repurchase plan ("March 2018 Plan"). This repurchase 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 or through privately negotiated transactions. The March 2018 Plan has no expiration date.

During the three months ended ~~August 1,~~October 31, 2020, the Company repurchased 0.6 million shares totaling ~~$14.3~~$19.5 million. As of ~~August 1,~~October 31, 2020, ~~$192.6~~$173.1 million of authorization remained under the March 2018 Plan. Reference is made to the discussion in Note 8, Stock Repurchase Program, in the “Notes to Condensed Consolidated Financial Statements” in Part I of this Quarterly Report on Form 10-Q, which information is incorporated by reference herein.

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Item 6. Exhibits


Number						Description



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)

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SIGNATURES

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


		DILLARD’S, INC.
		(Registrant)


Date:	~~September~~December 4, 2020	/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

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	Three Months Ended August 3, 2019
						Accumulated Other Comprehensive Loss
	Common Stock				Additional Paid-in Capital							Retained Earnings			Treasury Stock
																Total
Balance, May 4, 2019	$	1,239	$	948,835		$	(12,809)	$	4,533,973	$	(3,734,330)		$	1,736,908
Net loss	—		—			—		(40,671)		—			(40,671)

Issuance of 17,600 shares under equity plans	—		1,011			—		—		—			1,011
Purchase of 818,585 shares of treasury stock	—		—			—		—		(48,861)			(48,861)
Cash dividends declared:
Common stock, $0.10 per share	—		—			—		(2,543)		—			(2,543)
Balance, August 3, 2019	$	1,239	$	949,846		$	(12,809)	$	4,490,759	$	(3,783,191)		$	1,645,844