Dillard'S, Inc. (NYSE: DDS)

Sector: Consumer Cyclical Industry: Department Stores CIK: 0000028917
Market Cap 48.00 Bn
P/B 21.35
P/E 437.54
P/S 7.74
ROIC (Qtr) 21.42
Div Yield % 0.07
Rev 1y % (Qtr) 2.74
Total Debt (Qtr) 548.57 Mn
Debt/Equity (Qtr) 0.27
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About

Dillard's, Inc., a well-known retail company in the United States, operates under the stock symbol DDS and is a prominent player in the fashion apparel, cosmetics, and home furnishing industry. Established in 1938 by William T. Dillard, the company is headquartered in Little Rock, Arkansas, and manages over 273 stores across the country. The company's extensive range of products and services extends to fashion apparel for women, men, and children, accessories, cosmetics, and home furnishings. Dillard's has made a name for itself by offering exclusive...

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Investment thesis

Bull case

  • Strong operating cash flow of 870.55M provides robust 1.59x coverage of total debt 548.57M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 1.15B provide 10.84x coverage of short-term debt 106.04M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 4.30B provides 7.84x coverage of total debt 548.57M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 789.04M exceeds capital expenditure of 81.50M by 9.68x, indicating strong organic growth funding capability.
  • Short-term investments of 185.24M provide solid 1.48x coverage of other current liabilities 125.44M, indicating strong liquidity.

Bear case

  • Operating cash flow of 870.55M barely covers its investment activities of (161.18M), with a coverage ratio of -5.40, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 870.55M provides thin coverage of dividend payments of (413.43M) with a -2.11 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 1.15B provide limited coverage of acquisition spending of (34.30M), which is -33.50x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 870.55M is outpaced by equity issuance of (123.80M) (-7.03 ratio), indicating concerning reliance on equity markets for funding operations.
  • Retained earnings of 6.58B provide limited buffer against comprehensive income items of (47.43M), which is -138.78x, indicating elevated exposure to market risks.

Peer comparison

Companies in the Department Stores
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 DDS Dillard'S, Inc. 48.00 Bn 437.54 7.74 0.55 Bn
2 M Macy's, Inc. 7.70 Bn 5.42 0.28 5.24 Bn
3 KSS KOHLS Corp 4.95 Bn 4.67 0.26 6.80 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 11.31 4.23
EV to Cash from Ops. EV/CFO 82.16 30.77
EV to Debt EV to Debt 88.65 30.81
EV to EBIT EV/EBIT 221.58 76.95
EV to EBITDA EV/EBITDA 100.08 35.56
EV to Free Cash Flow [EV/FCF] EV/FCF 92.74 36.97
EV to Market Cap EV to Market Cap 1.01 1.47
EV to Revenue EV/Rev 7.84 2.92
Price to Book Value [P/B] P/B 21.35 7.91
Price to Earnings [P/E] P/E 437.54 149.21
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.40 1.94
Dividend Payout Ratio % Div Payout % (Qtr) 70.90 54.10
Dividend per Basic Share Div per Share (Qtr) 26.05 9.22
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 51.55 29.26
Interest Coverage Int. cover (Qtr) -99.25 -30.04
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 30.20 18.22
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 17.22 13.96
Dividend Growth (1y) % Div 1y % (Qtr) 24.05 -4.22
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -6.87 49.20
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -6.65 9.48
EBIT Growth (1y) % EBIT 1y % (Qtr) -7.44 49.91
EBT Growth (1y) % EBT 1y % (Qtr) -8.31 99.18
EPS Growth (1y) % EPS 1y % (Qtr) -5.16 106.37
FCF Growth (1y) % FCF 1y % (Qtr) 17.92 127.55
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -2.87 -3.79
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.54 1.33
Cash Payout Ratio Cash Payout (Qtr) 0.43 0.19
Cash Ratio Cash Ratio (Qtr) 0.80 0.30
Current Ratio Curr Ratio (Qtr) 2.19 1.58
Debt to Equity Ratio Debt/Equity (Qtr) 0.27 1.07
Interest Cover Ratio Int Coverage (Qtr) -99.25 -30.04
Times Interest Earned Times Interest Earned (Qtr) -99.25 -30.04
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 13.30 9.63
EBIT Margin % EBIT Margin % (Qtr) 10.64 5.75
EBT Margin % EBT Margin % (Qtr) 10.75 5.00
Gross Margin % Gross Margin % (Qtr) 40.20 40.37
Net Profit Margin % Net Margin % (Qtr) 8.80 4.03