Dillard's reported higher first-quarter (Q1) net income and sales for the period ended 2 May 2026, supported by growth in comparable store sales and a gain linked to a litigation settlement.

The US department store chain said net income for the period rose to $250.6m, up from $163.8m in the same quarter last year.

The quarter included a pre-tax litigation settlement gain of $104.1m, net of legal fees, tied to a payment card interchange fee lawsuit. After tax, the settlement added $79.6m to net income.

Net sales rose to $1.56bn from $1.52bn a year earlier.

Total retail sales, excluding construction subsidiary CDI Contractors, advanced 3% to $1.51bn, while comparable store sales also climbed 3%.

Operating expenses increased to $444m, representing 28.3% of sales, from $421.7m, or 27.6% of sales, in the prior-year period.

The company attributed the rise mainly to higher payroll and related costs.

Sales increased across all merchandise categories during the quarter.

Home and furniture, ladies’ accessories and lingerie, and shoes recorded the strongest gains.

Men’s apparel and accessories, juniors’ and children’s apparel, and ladies’ apparel posted moderate growth.

During the quarter, the retailer opened a 160,000ft² store at The Mall at Fairfield Commons in Beavercreek, Ohio.

Dillard’s currently operates 272 stores, including 28 clearance centres, across 30 US states, in addition to its online business.

Dillard’s CEO William T Dillard, II said: “We are pleased to report a good start to 2026 with a profitable 3% sales growth supported by an increased 45.8% retail gross margin. We continue to focus on motivating our customers with newness in our merchandise assortment.”

For the fiscal year ending 30 January 2027, the company expects depreciation and amortisation expenses of around $175m, rental expenses of $18m, net interest and debt income of $5m, and capital expenditure of $130m.