(Mark one) | ||
ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended February 2, 2019 | ||
or | ||
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to . |
DELAWARE State or other jurisdiction of incorporation or organization | 71-0388071 (IRS Employer Identification No.) | |
1600 CANTRELL ROAD, LITTLE ROCK, ARKANSAS (Address of principal executive offices) | 72201 (Zip Code) |
Title of each class | Name of each exchange on which registered | |
Class A Common Stock | New York Stock Exchange |
Large Accelerated Filer ý | Accelerated Filer o | Smaller Reporting Company o | ||||
Non-Accelerated Filer o | Emerging Growth Company o |
CLASS A COMMON STOCK, $0.01 par value | 22,338,129 | |
CLASS B COMMON STOCK, $0.01 par value | 4,010,401 |
Item No. | Page No. | |
16. |
Percentage of Net Sales | ||||||||
Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | ||||||
Retail operations segment: | ||||||||
Cosmetics | 14 | % | 14 | % | 14 | % | ||
Ladies' apparel | 22 | 23 | 22 | |||||
Ladies' accessories and lingerie | 15 | 16 | 16 | |||||
Juniors' and children's apparel | 9 | 8 | 8 | |||||
Men's apparel and accessories | 17 | 17 | 17 | |||||
Shoes | 15 | 16 | 16 | |||||
Home and furniture | 4 | 4 | 4 | |||||
96 | 98 | 97 | ||||||
Construction segment | 4 | 2 | 3 | |||||
Total | 100 | % | 100 | % | 100 | % |
Location | Number of stores | Owned Stores | Leased Stores | Owned Building on Leased Land | Partially Owned and Partially Leased | |||||||||
Alabama | 9 | 9 | — | — | — | |||||||||
Arkansas | 8 | 8 | — | — | — | |||||||||
Arizona | 17 | 16 | — | 1 | — | |||||||||
California | 3 | 3 | — | — | — | |||||||||
Colorado | 7 | 7 | — | — | — | |||||||||
Florida | 42 | 39 | 1 | 2 | — | |||||||||
Georgia | 12 | 8 | 3 | 1 | — | |||||||||
Iowa | 5 | 5 | — | — | — | |||||||||
Idaho | 2 | 2 | — | — | — | |||||||||
Illinois | 3 | 3 | — | — | — | |||||||||
Indiana | 3 | 3 | — | — | — | |||||||||
Kansas | 5 | 3 | — | 2 | — | |||||||||
Kentucky | 6 | 5 | 1 | — | — | |||||||||
Louisiana | 15 | 14 | 1 | — | — | |||||||||
Missouri | 9 | 6 | 1 | 2 | — | |||||||||
Mississippi | 6 | 4 | 1 | 1 | — | |||||||||
Montana | 2 | 2 | — | — | — | |||||||||
North Carolina | 14 | 14 | — | — | — | |||||||||
Nebraska | 3 | 2 | 1 | — | — | |||||||||
New Mexico | 6 | 3 | 3 | — | — | |||||||||
Nevada | 5 | 5 | — | — | — | |||||||||
Ohio | 13 | 11 | 2 | — | — | |||||||||
Oklahoma | 10 | 6 | 4 | — | — | |||||||||
South Carolina | 7 | 7 | — | — | — | |||||||||
Tennessee | 10 | 8 | 1 | — | 1 | |||||||||
Texas | 57 | 44 | 7 | 1 | 5 | |||||||||
Utah | 5 | 5 | — | — | — | |||||||||
Virginia | 6 | 5 | — | 1 | — | |||||||||
Wyoming | 1 | 1 | — | — | — | |||||||||
Total | 291 | 248 | 26 | 11 | 6 |
Facility | Location | Square Feet | Owned / Leased | |||
Distribution Centers: | Mabelvale, Arkansas | 400,000 | Owned | |||
Gilbert, Arizona | 295,000 | Owned | ||||
Valdosta, Georgia | 370,000 | Owned | ||||
Olathe, Kansas | 500,000 | Owned | ||||
Salisbury, North Carolina | 355,000 | Owned | ||||
Ft. Worth, Texas | 700,000 | Owned | ||||
Internet Fulfillment Center | Maumelle, Arkansas | 850,000 | Owned | |||
Dillard's Executive Offices | Little Rock, Arkansas | 333,000 | Owned | |||
CDI Contractors, LLC Executive Office | Little Rock, Arkansas | 25,000 | Owned | |||
CDI Storage Facilities | Maumelle, Arkansas | 66,000 | Owned | |||
Total | 3,894,000 |
Name | Age | Position & Office | Held Present Office Since | Family Relationship to CEO | |||||
William Dillard, II | 74 | Director; Chief Executive Officer | 1998 | Not applicable | |||||
Alex Dillard | 69 | Director; President | 1998 | Brother of William Dillard, II | |||||
Mike Dillard | 67 | Director; Executive Vice President | 1984 | Brother of William Dillard, II | |||||
Drue Matheny | 72 | Director; Executive Vice President | 1998 | Sister of William Dillard, II | |||||
Chris B. Johnson (1) | 47 | Senior Vice President; Co-Principal Financial Officer | 2015 | None | |||||
Phillip R. Watts (2) | 56 | Senior Vice President; Co-Principal Financial Officer and Principal Accounting Officer | 2015 | None | |||||
William Dillard, III (3) | 48 | Senior Vice President | 2015 | Son of William Dillard, II | |||||
Denise Mahaffy (4) | 61 | Senior Vice President | 2015 | Sister of William Dillard, II | |||||
Dean L. Worley | 53 | Vice President; General Counsel | 2012 | None | |||||
Mike McNiff | 66 | Vice President | 1995 | None | |||||
Brant Musgrave | 46 | Vice President | 2014 | None | |||||
Mike Litchford (5) | 53 | Vice President | 2016 | None | |||||
Tom Bolin (6) | 56 | Vice President | 2016 | None | |||||
Annemarie Jazic (7) | 35 | Vice President | 2017 | Niece of William Dillard, II | |||||
Alexandra Lucie (8) | 35 | Vice President | 2017 | Niece of William Dillard, II | |||||
Tony Bolte (9) | 60 | Vice President | 2017 | None | |||||
James D. Stockman (10) | 62 | Vice President | 2017 | None |
(1) | Mr. Johnson served as Vice President of Accounting from 2006 to 2012 and served as Vice President of Real Estate from 2012 to 2015. In 2015, he was promoted to Senior Vice President and Co-Principal Financial Officer. Since 2008, Mr. Johnson has also served as Chief Financial Officer of CDI, the Company's wholly-owned general contracting construction subsidiary. |
(2) | Mr. Watts served as Vice President of Tax from 2002 to 2015. In 2015, he was promoted to Senior Vice President, Co-Principal Financial Officer and Principal Accounting Officer. |
(3) | Mr. Dillard served as Vice President of Corporate Merchandising and Product Development from 2001 to 2015. In 2015, he was promoted to Senior Vice President. |
(4) | Mrs. Mahaffy served as Corporate Vice President of Advertising from 2000 to 2015. In 2015, she was promoted to Senior Vice President. |
(5) | Mr. Litchford served as a Regional Vice President of Stores from 2005 to 2016. In 2016, he was promoted to Corporate Vice President of Stores. |
(6) | Mr. Bolin served as a Regional Vice President of Stores from 2000 to 2016. In 2016, he was promoted to Corporate Vice President of Stores. |
(7) | Mrs. Jazic served as Director of Contemporary Sportswear from 2006 to 2013 and Director of Online Experience from 2013 to 2017. In 2017, she was promoted to Vice President of Online Experience. |
(8) | Mrs. Lucie served as a Divisional Merchandise Manager of Ladies', Juniors' and Children's Exclusive Brands from 2010 to 2014 and served as a General Merchandise Manager of Ladies', Juniors' and Children's Exclusive Brands from |
(9) | Mr. Bolte served as Vice President of Logistics from 2007 through 2017. In 2017, he was promoted to Vice President of Information Technology and Logistics. |
(10) | Mr. Stockman served as General Merchandise Manager of Exclusive Brands from 2004 through 2017. In 2017, he was promoted to Corporate Vice President of Ladies' Apparel. |
ITEM 5. | MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. |
Issuer Purchases of Equity Securities | ||||||||||||||
Period | (a) Total Number of Shares Purchased | (b) Average Price Paid per Share | (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | (d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||
November 4, 2018 through December 1, 2018 | 335,719 | $ | 65.56 | 335,719 | $ | 420,930,193 | ||||||||
December 2, 2018 through January 5, 2019 | 221,579 | 63.18 | 221,579 | 406,931,596 | ||||||||||
January 6, 2019 through February 2, 2019 | — | — | — | 406,931,596 | ||||||||||
Total | 557,298 | $ | 64.61 | 557,298 | $ | 406,931,596 |
2014 | 2015 | 2016 | 2017 | 2018 | |||||||||||||||
Dillard's, Inc. | $ | 130.41 | $ | 81.06 | $ | 63.19 | $ | 74.07 | $ | 76.71 | |||||||||
S&P 500 | 114.22 | 113.45 | 137.13 | 168.44 | 168.34 | ||||||||||||||
S&P 500 Department Stores | 124.77 | 89.97 | 72.57 | 89.22 | 94.46 |
(Dollars in thousands, except per share data) | 2018 | 2017(1) | 2016 | 2015 | 2014 | ||||||||||||||
As Adjusted(2) | As Adjusted(2) | ||||||||||||||||||
Net sales | $ | 6,356,109 | $ | 6,261,477 | $ | 6,257,137 | $ | 6,595,626 | $ | 6,621,054 | |||||||||
Percent change | 2 | % | — | % | (5 | )% | — | % | 1 | % | |||||||||
Cost of sales | 4,291,520 | 4,199,718 | 4,166,411 | 4,350,805 | 4,272,605 | ||||||||||||||
Percent of sales | 67.5 | % | 67.1 | % | 66.6 | % | 66.0 | % | 64.5 | % | |||||||||
Interest and debt expense, net | 52,518 | 62,580 | 63,059 | 60,923 | 61,306 | ||||||||||||||
Income before income taxes and income on and equity in earnings of joint ventures | 207,962 | 212,689 | 257,675 | 408,784 | 510,768 | ||||||||||||||
Income taxes (benefit) | 37,730 | (7,800 | ) | 88,500 | 140,770 | 179,480 | |||||||||||||
Income on and equity in earnings of joint ventures | 31 | 835 | 45 | 1,356 | 565 | ||||||||||||||
Net income | 170,263 | 221,324 | 169,220 | 269,370 | 331,853 | ||||||||||||||
Net income per diluted common share | 6.23 | 7.51 | 4.93 | 6.91 | 7.79 | ||||||||||||||
Dividends per common share | 0.40 | 0.34 | 0.28 | 0.26 | 0.24 | ||||||||||||||
Book value per common share | 63.70 | 60.77 | 53.41 | 49.98 | 49.02 | ||||||||||||||
Average number of diluted shares outstanding | 27,311,513 | 29,486,671 | 34,308,211 | 39,004,500 | 42,603,236 | ||||||||||||||
Accounts receivable | 49,853 | 38,437 | 47,308 | 47,138 | 56,510 | ||||||||||||||
Merchandise inventories | 1,528,417 | 1,463,561 | 1,406,403 | 1,374,505 | 1,374,481 | ||||||||||||||
Property and equipment, net | 1,586,733 | 1,696,276 | 1,790,267 | 1,939,832 | 2,029,171 | ||||||||||||||
Total assets | 3,431,369 | 3,682,703 | 3,898,450 | 3,863,901 | 4,168,101 | ||||||||||||||
Long-term debt | 365,569 | 365,429 | 526,106 | 613,061 | 612,815 | ||||||||||||||
Capital lease obligations | 1,666 | 2,880 | 3,988 | 7,269 | 5,919 | ||||||||||||||
Other liabilities | 238,731 | 240,173 | 238,424 | 238,980 | 250,455 | ||||||||||||||
Deferred income taxes | 13,487 | 116,831 | 225,684 | 258,070 | 278,999 | ||||||||||||||
Subordinated debentures | 200,000 | 200,000 | 200,000 | 200,000 | 200,000 | ||||||||||||||
Total stockholders' equity | 1,678,381 | 1,708,155 | 1,717,417 | 1,795,305 | 2,019,270 | ||||||||||||||
Number of stores | |||||||||||||||||||
Opened | — | 1 | — | 3 | 2 | ||||||||||||||
Closed | 1 | 2 | 4 | 3 | 1 | ||||||||||||||
Total—end of year | 291 | 292 | 293 | 297 | 297 |
(2) | See Note 1, Description of Business and Summary of Significant Accounting Policies, in the "Notes to Consolidated Financial Statements" in Item 8 hereof. |
• | a $4.9 million pretax gain ($3.2 million after tax or $0.11 per share) related to the disposal of assets from the sale of a store property and insurance recovery on a previously damaged full-line store location partially offset by a loss on the sale of equipment. |
• | an $0.8 million pretax loss ($0.5 million after tax or $0.02 per share) related to the write-off of certain deferred financing fees in connection with the amendment and extension of the Company's senior unsecured revolving credit facility. |
• | an estimated tax benefit of approximately $77.4 million ($2.62 per share) related to the Tax Cuts and Jobs Act of 2017. |
ITEM 7. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | ||||||||||
Net sales (in millions) | $ | 6,356.1 | $ | 6,261.5 | $ | 6,257.1 | ||||||
Gross profit (in millions) | $ | 2,064.6 | $ | 2,061.8 | $ | 2,090.7 | ||||||
Gross profit as a percentage of net sales | 32.5 | % | 32.9 | % | 33.4 | % | ||||||
Retail gross profit as a percentage of retail net sales | 33.6 | % | 33.6 | % | 34.3 | % | ||||||
Selling, general and administrative expenses as a percentage of net sales | 26.6 | % | 26.9 | % | 26.3 | % | ||||||
Cash flow from operations (in millions) | $ | 367.3 | $ | 274.3 | $ | 512.2 | ||||||
Total retail store count at end of period | 291 | 292 | 293 | |||||||||
Retail sales per square foot | $ | 127 | $ | 127 | $ | 126 | ||||||
Retail stores sales trend | 2 | % | * | (1 | )% | ** | (5 | )% | ||||
Comparable retail store sales trend | 2 | % | * | — | % | ** | (5 | )% | ||||
Retail store inventory trend | 4 | % | 4 | % | 2 | % | ||||||
Retail merchandise inventory turnover | 2.4 | 2.5 | 2.5 |
• | Cash flow—Cash from operating activities is a primary source of our liquidity that is adversely affected when the retail industry faces economic challenges. Furthermore, operating cash flow can be negatively affected by competitive factors. |
• | Pricing—If our customers do not purchase our merchandise offerings in sufficient quantities, we respond by taking markdowns. If we have to reduce our retail selling prices, the cost of sales on our consolidated statement of income will correspondingly rise, thus reducing our net income and cash flow. |
• | Success of brand—The success of our exclusive brand merchandise as well as merchandise we source from national vendors is dependent upon customer fashion preferences and how well we can predict and anticipate trends. |
• | Sourcing—Our store merchandise selection is dependent upon our ability to acquire appealing products from a number of sources. Our ability to attract and retain compelling vendors as well as in-house design talent, the adequacy and stable availability of materials and production facilities from which we source our merchandise and the speed at which we can respond to customer trends and preferences all have a significant impact on our merchandise mix and, thus, our ability to sell merchandise at profitable prices. |
• | Store growth—Our ability to open new stores is dependent upon a number of factors, such as the identification of suitable markets and locations and the availability of shopping developments, especially in a weak economic environment. Store growth can be further hindered by mall attrition and subsequent closure of underperforming properties. |
(in millions of dollars) | Fiscal 2019 Estimated | Fiscal 2018 Actual | |||||
Depreciation and amortization | $ | 225 | $ | 224 | |||
Rentals | 28 | 29 | |||||
Interest and debt expense, net | 46 | 53 | |||||
Capital expenditures | 140 | 137 |
• | Significant changes in the manner of our use of assets or the strategy for the overall business; |
• | Significant negative industry or economic trends; |
• | A current-period operating or cash flow loss combined with a history of operating or cash flow losses; and |
• | Store closings. |
For the years ended | ||||||||||||||||||||
February 2, 2019 | February 3, 2018 | January 28, 2017 | ||||||||||||||||||
As Adjusted(1) | As Adjusted(1) | |||||||||||||||||||
(in thousands of dollars) | Amount | % of Net Sales | Amount | % of Net Sales | Amount | % of Net Sales | ||||||||||||||
Net sales | $ | 6,356,109 | 100.0 | % | $ | 6,261,477 | 100.0 | % | $ | 6,257,137 | 100.0 | % | ||||||||
Service charges and other income | 147,240 | 2.3 | 161,199 | 2.6 | 160,871 | 2.6 | ||||||||||||||
6,503,349 | 102.3 | 6,422,676 | 102.6 | 6,418,008 | 102.6 | |||||||||||||||
Cost of sales | 4,291,520 | 67.5 | 4,199,718 | 67.1 | 4,166,411 | 66.6 | ||||||||||||||
Selling, general and administrative expenses | 1,691,180 | 26.6 | 1,684,916 | 26.9 | 1,646,775 | 26.3 | ||||||||||||||
Depreciation and amortization | 223,815 | 3.5 | 231,595 | 3.7 | 243,657 | 3.9 | ||||||||||||||
Rentals | 28,646 | 0.5 | 28,012 | 0.4 | 25,954 | 0.4 | ||||||||||||||
Interest and debt expense, net | 52,518 | 0.8 | 62,580 | 1.0 | 63,059 | 1.0 | ||||||||||||||
Other expense | 7,660 | 0.1 | 8,026 | 0.1 | 8,882 | 0.1 | ||||||||||||||
Loss (gain) on disposal of assets | 48 | — | (4,860 | ) | (0.1 | ) | (905 | ) | — | |||||||||||
Asset impairment and store closing charges | — | — | — | — | 6,500 | 0.1 | ||||||||||||||
Income before income taxes and income on and equity in earnings of joint ventures | 207,962 | 3.3 | 212,689 | 3.4 | 257,675 | 4.1 | ||||||||||||||
Income taxes (benefit) | 37,730 | 0.6 | (7,800 | ) | (0.1 | ) | 88,500 | 1.4 | ||||||||||||
Income on and equity in earnings of joint ventures | 31 | — | 835 | — | 45 | — | ||||||||||||||
Net income | $ | 170,263 | 2.7 | % | $ | 221,324 | 3.5 | % | $ | 169,220 | 2.7 | % |
(1) | See Note 1, Description of Business and Summary of Significant Accounting Policies, in the "Notes to Consolidated Financial Statements" in Item 8 hereof. |
(in thousands of dollars) | Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | ||||||||
Net sales: | |||||||||||
Retail operations segment | $ | 6,120,758 | $ | 6,108,037 | $ | 6,071,570 | |||||
Construction segment | 235,351 | 153,440 | 185,567 | ||||||||
Total net sales | $ | 6,356,109 | $ | 6,261,477 | $ | 6,257,137 |
Percent Change | ||||||
Fiscal 2018-2017(1) | Fiscal 2017-2016(2) | |||||
Retail operations segment | ||||||
Cosmetics | 1.9 | % | (4.3 | )% | ||
Ladies' apparel | 0.2 | 2.1 | ||||
Ladies' accessories and lingerie | 2.1 | (1.2 | ) | |||
Juniors' and children's apparel | 3.3 | 0.9 | ||||
Men's apparel and accessories | 3.4 | 0.4 | ||||
Shoes | (0.5 | ) | (2.2 | ) | ||
Home and furniture | 4.9 | (2.4 | ) | |||
Construction segment | 53.4 | (17.3 | ) |
Dollar Change | Percent Change | ||||||||||||||||||||||||
(in millions of dollars) | Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | 2018 - 2017 | 2017 - 2016 | 2018 - 2017 | 2017 - 2016 | ||||||||||||||||||
Service charges and other income: | |||||||||||||||||||||||||
Retail operations segment | |||||||||||||||||||||||||
Income from Wells Fargo Alliance and former Synchrony Alliance | $ | 93.6 | $ | 101.3 | $ | 103.5 | $ | (7.7 | ) | $ | (2.2 | ) | (7.6 | )% | (2.1 | )% | |||||||||
Leased department income | 5.3 | 6.0 | 7.3 | (0.7 | ) | (1.3 | ) | (11.7 | ) | (17.8 | ) | ||||||||||||||
Shipping and handling income | 26.6 | 33.3 | 29.2 | (6.7 | ) | 4.1 | (20.1 | ) | 14.0 | ||||||||||||||||
Other | 16.0 | 17.9 | 19.3 | (1.9 | ) | (1.4 | ) | (10.6 | ) | (7.3 | ) | ||||||||||||||
141.5 | 158.5 | 159.3 | (17.0 | ) | (0.8 | ) | (10.7 | ) | (0.5 | ) | |||||||||||||||
Construction segment | 5.7 | 2.7 | 1.6 | 3.0 | 1.1 | 111.1 | 68.8 | ||||||||||||||||||
Total | $ | 147.2 | $ | 161.2 | $ | 160.9 | $ | (14.0 | ) | $ | 0.3 | (8.7 | )% | 0.2 | % |
(in thousands of dollars) | Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | ||||||||
Gross profit: | |||||||||||
Retail operations segment | $ | 2,056,010 | $ | 2,054,969 | $ | 2,081,935 | |||||
Construction segment | 8,579 | 6,790 | 8,791 | ||||||||
Total gross profit | $ | 2,064,589 | $ | 2,061,759 | $ | 2,090,726 | |||||
Gross profit as a percentage of segment net sales: | |||||||||||
Retail operations segment | 33.6 | % | 33.6 | % | 34.3 | % | |||||
Construction segment | 3.7 | 4.4 | 4.7 | ||||||||
Total gross profit as a percentage of net sales | 32.5 | 32.9 | 33.4 |
(in thousands of dollars) | Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | ||||||||
SG&A: | |||||||||||
Retail operations segment | $ | 1,682,179 | $ | 1,677,850 | $ | 1,640,771 | |||||
Construction segment | 9,001 | 7,066 | 6,004 | ||||||||
Total SG&A | $ | 1,691,180 | $ | 1,684,916 | $ | 1,646,775 | |||||
SG&A as a percentage of segment net sales: | |||||||||||
Retail operations segment | 27.5 | % | 27.5 | % | 27.0 | % | |||||
Construction segment | 3.8 | 4.6 | 3.2 | ||||||||
Total SG&A as a percentage of net sales | 26.6 | 26.9 | 26.3 |
(in thousands of dollars) | Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | ||||||||
Depreciation and amortization: | |||||||||||
Retail operations segment | $ | 223,175 | $ | 230,946 | $ | 242,981 | |||||
Construction segment | 640 | 649 | 676 | ||||||||
Total depreciation and amortization | $ | 223,815 | $ | 231,595 | $ | 243,657 |
(in thousands of dollars) | Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | ||||||||
Interest and debt expense (income), net: | |||||||||||
Retail operations segment | $ | 52,574 | $ | 62,638 | $ | 63,127 | |||||
Construction segment | (56 | ) | (58 | ) | (68 | ) | |||||
Total interest and debt expense, net | $ | 52,518 | $ | 62,580 | $ | 63,059 |
(in thousands of dollars) | Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | |||||||||
Other expense: | ||||||||||||
Retail operations segment | $ | 7,660 | $ | 8,026 | $ | 8,882 | ||||||
Construction segment | — | — | — | |||||||||
Total other expense | $ | 7,660 | $ | 8,026 | $ | 8,882 |
(in thousands of dollars) | Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | ||||||||
Loss (gain) on disposal of assets: | |||||||||||
Retail operations segment | $ | 53 | $ | (4,855 | ) | $ | (886 | ) | |||
Construction segment | (5 | ) | (5 | ) | (19 | ) | |||||
Total loss (gain) on disposal of assets | $ | 48 | $ | (4,860 | ) | $ | (905 | ) |
(in thousands of dollars) | Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | ||||||||
Asset impairment and store closing charges: | |||||||||||
Retail operations segment | $ | — | $ | — | $ | 6,500 | |||||
Construction segment | — | — | — | ||||||||
Total asset impairment and store closing charges | $ | — | $ | — | $ | 6,500 |
Percent Change | |||||||||||||||||
(in thousands of dollars) | Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | 2018 - 2017 | 2017 - 2016 | ||||||||||||
Operating Activities | $ | 367,288 | $ | 274,285 | $ | 512,210 | 33.9 | % | (46.5 | )% | |||||||
Investing Activities | (127,749 | ) | (110,207 | ) | (114,852 | ) | (15.9 | ) | 4.0 | ||||||||
Financing Activities | (303,058 | ) | (324,035 | ) | (253,242 | ) | 6.5 | (28.0 | ) | ||||||||
Total Cash Provided (Used) | $ | (63,519 | ) | $ | (159,957 | ) | $ | 144,116 |
Fiscal Year | Long-Term Debt Maturities | ||
2019 | $ | — | |
2020 | — | ||
2021 | — | ||
2022 | 44.8 | ||
2023 | — |
(in thousands of dollars) Contractual Obligations | Total | Less than 1 year | 1 - 3 years | 3 - 5 years | More than 5 years | ||||||||||||||
Long-term debt | $ | 366,625 | $ | — | $ | — | $ | 44,800 | $ | 321,825 | |||||||||
Interest on long-term debt | 220,947 | 27,301 | 54,601 | 51,270 | 87,775 | ||||||||||||||
Subordinated debentures | 200,000 | — | — | — | 200,000 | ||||||||||||||
Interest on subordinated debentures | 292,561 | 14,959 | 29,918 | 30,205 | 217,479 | ||||||||||||||
Capital lease obligations, including interest | 3,231 | 1,428 | 1,803 | — | — | ||||||||||||||
Benefit plan participant payments | 195,852 | 5,810 | 19,614 | 22,913 | 147,515 | ||||||||||||||
Purchase obligations(1) | 1,445,596 | 1,445,596 | — | — | — | ||||||||||||||
Operating leases(2) | 68,767 | 19,847 | 26,114 | 8,274 | 14,532 | ||||||||||||||
Total contractual cash obligations(3)(4) | $ | 2,793,579 | $ | 1,514,941 | $ | 132,050 | $ | 157,462 | $ | 989,126 |
(1) | The Company's purchase obligations principally consist of purchase orders for merchandise and store construction commitments. Amounts committed under open purchase orders for merchandise inventory represent $1,441.2 million of the purchase obligations. |
(2) | The operating leases included in the above table do not include contingent rent based upon sales volume, which represented approximately 13% of minimum lease obligations in fiscal 2018. |
(3) | The total liability for unrecognized tax benefits is $2.0 million, including tax, penalty, and interest. The Company is not able to reasonably estimate the timing of future cash flows and has excluded these liabilities from the table above; however, at this time, the Company does not expect a significant change in unrecognized tax benefits in the next twelve months. |
(4) | The Company is unable to reasonably estimate the timing of future cash flows of workers' compensation and general liability insurance reserves of $25.2 million and gift card liabilities of $20.2 million and have excluded these from the table above. |
(in thousands of dollars) Other Commercial Commitments | Total Amounts Committed | Within 1 year | 2 - 3 years | 4 - 5 years | After 5 years | ||||||||||||||
$800 million line of credit, none outstanding(1) | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
Standby letters of credit | 21,841 | 21,841 | — | — | — | ||||||||||||||
Import letters of credit | — | — | — | — | — | ||||||||||||||
Total commercial commitments | $ | 21,841 | $ | 21,841 | $ | — | $ | — | $ | — |
(1) | At February 2, 2019, letters of credit totaling $21.8 million were issued under the credit agreement. |
Expected Maturity Date (fiscal year) | |||||||||||||||||||||||||||||||
(in thousands of dollars) | 2019 | 2020 | 2021 | 2022 | 2023 | Thereafter | Total | Fair Value | |||||||||||||||||||||||
Long-term debt | $ | — | $ | — | $ | — | $ | 44,800 | $ | — | $ | 321,825 | $ | 366,625 | $ | 384,346 | |||||||||||||||
Average fixed interest rate | — | % | — | % | — | % | 7.9 | % | — | % | 7.4 | % | 7.5 | % | |||||||||||||||||
Subordinated debentures | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 200,000 | $ | 200,000 | $ | 215,200 | |||||||||||||||
Average interest rate | — | — | — | — | — | 7.5 | % | 7.5 | % |
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. |
Number of securities to be issued upon exercise of outstanding options | Weighted average exercise prices of outstanding options | Number of securities available for future issuance under equity compensation plans | |||||||
Equity compensation plans approved by stockholders* | — | $ | — | 8,748,111 | |||||
Total | — | $ | — | 8,748,111 |
* | Included in this category are the following equity compensation plans, which have been approved by the Company's stockholders: |
• | 1990 Incentive and Nonqualified Stock Option Plan |
• | 1998 Incentive and Nonqualified Stock Option Plan |
• | 2000 Incentive and Nonqualified Stock Option Plan |
• | Dillard's, Inc. Stock Bonus Plan |
• | Dillard's, Inc. Stock Purchase Plan |
• | Dillard's, Inc. 2005 Non-Employee Director Restricted Stock Plan |
Number | Description | |
*3(a) | Restated Certificate of Incorporation (Exhibit 3 to Form 10-Q for the quarter ended August 1, 1992, File No. 1-6140, as amended Exhibit 3 to Form 10-Q for the quarter ended May 3, 1997, File No. 1-6140). | |
*4 | Indenture between Registrant and Chemical Bank, Trustee, dated as of May 15, 1988, as supplemented (Exhibit 4 to Registration Statement File No. 33-21671, Exhibit 4.2 to Registration Statement File No. 33-25114, Exhibit 4(c) to Form 8-K dated September 26, 1990, File No. 1-6140 and Exhibit 4-q to Registration Statement File No. 333-59183). | |
*+10(a) | 1990 Incentive and Nonqualified Stock Option Plan (Exhibit 10(b) to Form 10-K for the fiscal year ended January 30, 1993, File No. 1-6140). | |
*+10(b) | Senior Management Cash Bonus Plan (Exhibit 10(d) to Form 10-K for the fiscal year ended January 28, 1995, File No. 1-6140). | |
*+10(c) | 1998 Incentive and Nonqualified Stock Option Plan (Exhibit 10(b) to Form 10-K for the fiscal year ended January 30, 1999, File No. 1-6140). | |
Number | Description | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
+ | A management contract or compensatory plan or arrangement. |
By: | /s/ Phillip R. Watts | |
Phillip R. Watts | ||
Senior Vice President, Co-Principal Financial Officer and Principal Accounting Officer | ||
By: | /s/ Chris B. Johnson | |
Chris B. Johnson | ||
Senior Vice President and Co-Principal Financial Officer |
/s/ William Dillard, II | /s/ Chris B. Johnson | |
William Dillard, II Chairman of the Board and Chief Executive Officer (Principal Executive Officer) | Chris B. Johnson Senior Vice President and Co-Principal Financial Officer | |
/s/ Alex Dillard | /s/ Phillip R. Watts | |
Alex Dillard President and Director | Phillip R. Watts Senior Vice President, Co-Principal Financial Officer and Principal Accounting Officer | |
/s/ Mike Dillard | /s/ Drue Matheny | |
Mike Dillard Executive Vice President and Director | Drue Matheny Executive Vice President and Director | |
/s/ Robert C. Connor | /s/ James I. Freeman | |
Robert C. Connor Director | James I. Freeman Director | |
/s/ H. Lee Hastings | /s/ Frank R. Mori | |
H. Lee Hastings Director | Frank R. Mori Director | |
/s/ Reynie Rutledge | /s/ Warren A. Stephens | |
Reynie Rutledge Director | Warren A. Stephens Director | |
/s/ J.C. Watts, Jr. | /s/ Nick White | |
J. C. Watts, Jr. Director | Nick White Director |
Page | |
Consolidated Balance Sheets—February 2, 2019 and February 3, 2018 | |
Consolidated Statements of Income—Fiscal years ended February 2, 2019, February 3, 2018 and January 28, 2017 | |
Consolidated Statements of Comprehensive Income—Fiscal years ended February 2, 2019, February 3, 2018 and January 28, 2017 | |
Consolidated Statements of Stockholders' Equity—Fiscal years ended February 2, 2019, February 3, 2018 and January 28, 2017 | |
Consolidated Statements of Cash Flows—Fiscal years ended February 2, 2019, February 3, 2018 and January 28, 2017 | |
Notes to Consolidated Financial Statements—Fiscal years ended February 2, 2019, February 3, 2018 and January 28, 2017 |
February 2, 2019 | February 3, 2018 | ||||||
As Adjusted(1) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 123,509 | $ | 187,028 | |||
Accounts receivable | 49,853 | 38,437 | |||||
Merchandise inventories | 1,528,417 | 1,463,561 | |||||
Other current assets | 68,753 | 50,359 | |||||
Total current assets | 1,770,532 | 1,739,385 | |||||
Property and equipment: | |||||||
Land and land improvements | 64,003 | 64,003 | |||||
Buildings and leasehold improvements | 3,125,629 | 3,096,838 | |||||
Furniture, fixtures and equipment | 603,698 | 1,041,758 | |||||
Buildings under construction | 6,707 | 1,464 | |||||
Buildings and equipment under capital leases | 14,556 | 23,648 | |||||
Less accumulated depreciation and amortization | (2,227,860 | ) | (2,531,435 | ) | |||
1,586,733 | 1,696,276 | ||||||
Other assets | 74,104 | 247,042 | |||||
Total assets | $ | 3,431,369 | $ | 3,682,703 | |||
Liabilities and stockholders' equity | |||||||
Current liabilities: | |||||||
Trade accounts payable and accrued expenses | $ | 921,205 | $ | 845,281 | |||
Current portion of long-term debt | — | 160,927 | |||||
Current portion of capital lease obligations | 1,214 | 1,107 | |||||
Federal and state income taxes | 11,116 | 41,920 | |||||
Total current liabilities | 933,535 | 1,049,235 | |||||
Long-term debt | 365,569 | 365,429 | |||||
Capital lease obligations | 1,666 | 2,880 | |||||
Other liabilities | 238,731 | 240,173 | |||||
Deferred income taxes | 13,487 | 116,831 | |||||
Subordinated debentures | 200,000 | 200,000 | |||||
Commitments and contingencies | |||||||
Stockholders' equity: | |||||||
Common stock, Class A—119,899,553 and 119,860,744 shares issued; 22,338,129 and 24,096,228 shares outstanding | 1,199 | 1,199 | |||||
Common stock, Class B (convertible)—4,010,401 and 4,010,401 shares issued and outstanding | 40 | 40 | |||||
Additional paid-in capital | 948,835 | 946,147 | |||||
Accumulated other comprehensive loss | (12,809 | ) | (15,444 | ) | |||
Retained earnings | 4,458,006 | 4,365,219 | |||||
Less treasury stock, at cost, Class A—97,561,424 and 95,764,516 shares | (3,716,890 | ) | (3,589,006 | ) | |||
Total stockholders' equity | 1,678,381 | 1,708,155 | |||||
Total liabilities and stockholders' equity | $ | 3,431,369 | $ | 3,682,703 |
Years Ended | |||||||||||
February 2, 2019 | February 3, 2018 | January 28, 2017 | |||||||||
As Adjusted(1) | As Adjusted(1) | ||||||||||
Net sales | $ | 6,356,109 | $ | 6,261,477 | $ | 6,257,137 | |||||
Service charges and other income | 147,240 | 161,199 | 160,871 | ||||||||
6,503,349 | 6,422,676 | 6,418,008 | |||||||||
Cost of sales | 4,291,520 | 4,199,718 | 4,166,411 | ||||||||
Selling, general and administrative expenses | 1,691,180 | 1,684,916 | 1,646,775 | ||||||||
Depreciation and amortization | 223,815 | 231,595 | 243,657 | ||||||||
Rentals | 28,646 | 28,012 | 25,954 | ||||||||
Interest and debt expense, net | 52,518 | 62,580 | 63,059 | ||||||||
Other expense | 7,660 | 8,026 | 8,882 | ||||||||
Loss (gain) on disposal of assets | 48 | (4,860 | ) | (905 | ) | ||||||
Asset impairment and store closing charges | — | — | 6,500 | ||||||||
Income before income taxes and income on and equity in earnings of joint ventures | 207,962 | 212,689 | 257,675 | ||||||||
Income taxes (benefit) | 37,730 | (7,800 | ) | 88,500 | |||||||
Income on and equity in earnings of joint ventures | 31 | 835 | 45 | ||||||||
Net income | $ | 170,263 | $ | 221,324 | $ | 169,220 | |||||
Earnings per common share: | |||||||||||
Basic | $ | 6.23 | $ | 7.51 | $ | 4.93 | |||||
Diluted | 6.23 | 7.51 | 4.93 |
Years Ended | |||||||||||
February 2, 2019 | February 3, 2018 | January 28, 2017 | |||||||||
Net income | $ | 170,263 | $ | 221,324 | $ | 169,220 | |||||
Other comprehensive income (loss): | |||||||||||
Amortization of retirement plan and other retiree benefit adjustments (net of tax of $1,646, ($1,395) and $3,686) | 5,177 | (4,307 | ) | 5,981 | |||||||
Comprehensive income | $ | 175,440 | $ | 217,017 | $ | 175,201 |
Common Stock | Accumulated Other Comprehensive Loss | ||||||||||||||||||||||||||
Additional Paid-in Capital | Retained Earnings | Treasury Stock | |||||||||||||||||||||||||
Class A | Class B | Total | |||||||||||||||||||||||||
Balance, January 30, 2016 | $ | 1,198 | $ | 40 | $ | 940,796 | $ | (17,118 | ) | $ | 3,994,211 | $ | (3,123,822 | ) | $ | 1,795,305 | |||||||||||
Net income | — | — | — | — | 169,220 | — | 169,220 | ||||||||||||||||||||
Other comprehensive income | — | — | — | 5,981 | — | — | 5,981 | ||||||||||||||||||||
Issuance of 47,554 shares under stock bonus plans | — | — | 2,671 | — | — | — | 2,671 | ||||||||||||||||||||
Purchase of 3,810,385 shares of treasury stock | — | — | — | — | — | (246,173 | ) | (246,173 | ) | ||||||||||||||||||
Cash dividends declared: | |||||||||||||||||||||||||||
Common stock, $0.28 per share | — | — | — | — | (9,587 | ) | — | (9,587 | ) | ||||||||||||||||||
Balance, January 28, 2017 | 1,198 | 40 | 943,467 | (11,137 | ) | 4,153,844 | (3,369,995 | ) | 1,717,417 | ||||||||||||||||||
Net income | — | — | — | — | 221,324 | — | 221,324 | ||||||||||||||||||||
Other comprehensive loss | — | — | — | (4,307 | ) | — | — | (4,307 | ) | ||||||||||||||||||
Issuance of 46,042 shares under stock bonus plans | 1 | — | 2,680 | — | — | — | 2,681 | ||||||||||||||||||||
Purchase of 4,096,972 shares of treasury stock | — | — | — | — | — | (219,011 | ) | (219,011 | ) | ||||||||||||||||||
Cash dividends declared: | |||||||||||||||||||||||||||
Common stock, $0.34 per share | — | — | — | — | (9,949 | ) | — | (9,949 | ) | ||||||||||||||||||
Balance, February 3, 2018 | 1,199 | 40 | 946,147 | (15,444 | ) | 4,365,219 | (3,589,006 | ) | 1,708,155 | ||||||||||||||||||
Net income | — | — | — | — | 170,263 | — | 170,263 | ||||||||||||||||||||
Cumulative effect adjustment related to ASU 2016-16 and 2018-02 | — | — | — | (2,542 | ) | (66,574 | ) | — | (69,116 | ) | |||||||||||||||||
Other comprehensive income | — | — | — | 5,177 | — | — | 5,177 | ||||||||||||||||||||
Issuance of 38,809 shares under stock bonus plans | — | — | 2,688 | — | — | — | 2,688 | ||||||||||||||||||||
Purchase of 1,796,908 shares of treasury stock | — | — | — | — | — | (127,884 | ) | (127,884 | ) | ||||||||||||||||||
Cash dividends declared: | |||||||||||||||||||||||||||
Common stock, $0.40 per share | — | — | — | — | (10,902 | ) | — | (10,902 | ) | ||||||||||||||||||
Balance, February 2, 2019 | $ | 1,199 | $ | 40 | $ | 948,835 | $ | (12,809 | ) | $ | 4,458,006 | $ | (3,716,890 | ) | $ | 1,678,381 |
Years Ended | |||||||||||
February 2, 2019 | February 3, 2018 | January 28, 2017 | |||||||||
As Adjusted(1) | As Adjusted(1) | ||||||||||
Operating activities: | |||||||||||
Net income | $ | 170,263 | $ | 221,324 | $ | 169,220 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization of property and other deferred cost | 225,849 | 233,683 | 245,923 | ||||||||
Deferred income taxes | 334 | (102,065 | ) | (35,703 | ) | ||||||
Loss (gain) on disposal of assets | 48 | 1,000 | (905 | ) | |||||||
Proceeds from insurance | — | — | 3,173 | ||||||||
Gain from insurance proceeds | — | (5,861 | ) | (1,635 | ) | ||||||
Loss on early extinguishment of debt | — | 797 | — | ||||||||
Asset impairment and store closing charges | — | — | 6,500 | ||||||||
Changes in operating assets and liabilities: | |||||||||||
(Increase) decrease in accounts receivable | (11,416 | ) | 8,871 | (1,743 | ) | ||||||
Increase in merchandise inventories | (64,856 | ) | (57,158 | ) | (33,436 | ) | |||||
(Increase) decrease in other current assets | (17,416 | ) | (1,902 | ) | 9,224 | ||||||
(Increase) decrease in other assets | (10,419 | ) | 2,196 | 1,047 | |||||||
Increase (decrease) in trade accounts payable and accrued expenses and other liabilities | 104,060 | (20,395 | ) | 156,750 | |||||||
Decrease in income taxes payable | (29,159 | ) | (6,205 | ) | (6,205 | ) | |||||
Net cash provided by operating activities | 367,288 | 274,285 | 512,210 | ||||||||
Investing activities: | |||||||||||
Purchase of property and equipment | (137,064 | ) | (130,464 | ) | (104,824 | ) | |||||
Proceeds from disposal of assets | 2,003 | 11,683 | 1,150 | ||||||||
Proceeds from insurance | 3,477 | 5,114 | 6,322 | ||||||||
Investment in joint venture | — | — | (20,000 | ) | |||||||
Distribution from joint venture | 3,835 | 3,460 | 2,500 | ||||||||
Net cash used in investing activities | (127,749 | ) | (110,207 | ) | (114,852 | ) | |||||
Financing activities: | |||||||||||
Principal payments on long-term debt and capital lease obligations | (162,066 | ) | (90,483 | ) | (3,284 | ) | |||||
Cash dividends paid | (11,108 | ) | (9,424 | ) | (9,787 | ) | |||||
Purchase of treasury stock | (129,884 | ) | (223,013 | ) | (240,171 | ) | |||||
Issuance cost of line of credit | — | (1,115 | ) | — | |||||||
Net cash used in financing activities | (303,058 | ) | (324,035 | ) | (253,242 | ) | |||||
(Decrease) increase in cash and cash equivalents | (63,519 | ) | (159,957 | ) | 144,116 | ||||||
Cash and cash equivalents, beginning of year | 187,028 | 346,985 | 202,869 | ||||||||
Cash and cash equivalents, end of year | $ | 123,509 | $ | 187,028 | $ | 346,985 | |||||
Non-cash transactions: | |||||||||||
Accrued capital expenditures | $ | 2,597 | $ | 23,084 | $ | 3,453 | |||||
Stock awards | 2,688 | 2,680 | 2,671 | ||||||||
Accrued purchases of treasury stock | — | 2,000 | 6,002 |
Buildings and leasehold improvements | 20 - 40 years |
Furniture, fixtures and equipment | 3 - 10 years |
February 3, 2018 | ||||||||||||
As previously reported | Adjustments | As adjusted | ||||||||||
Assets | ||||||||||||
Accounts receivable | $ | 39,650 | $ | (1,213 | ) | $ | 38,437 | |||||
Other current assets | 39,612 | 10,747 | 50,359 | |||||||||
Liabilities and stockholders' equity | ||||||||||||
Trade accounts payable and accrued expenses | 835,747 | 9,534 | 845,281 |
Retail | ||||||||||||
(in thousands of dollars) | February 2, 2019 | February 3, 2018 | January 28, 2017 | |||||||||
Contract liabilities | $ | 72,852 | $ | 73,059 | $ | 73,639 |
Construction | ||||||||||||
(in thousands of dollars) | February 2, 2019 | February 3, 2018 | January 28, 2017 | |||||||||
Accounts receivable | $ | 31,867 | $ | 20,136 | $ | 30,190 | ||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | 1,165 | 1,213 | 922 | |||||||||
Billings in excess of costs and estimated earnings on uncompleted contracts | 7,414 | 5,503 | 8,826 |
Percentage of Net Sales | ||||||||
Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | ||||||
Retail operations segment: | ||||||||
Cosmetics | 14 | % | 14 | % | 14 | % | ||
Ladies' apparel | 22 | 23 | 22 | |||||
Ladies' accessories and lingerie | 15 | 16 | 16 | |||||
Juniors' and children's apparel | 9 | 8 | 8 | |||||
Men's apparel and accessories | 17 | 17 | 17 | |||||
Shoes | 15 | 16 | 16 | |||||
Home and furniture | 4 | 4 | 4 | |||||
96 | 98 | 97 | ||||||
Construction segment | 4 | 2 | 3 | |||||
Total | 100 | % | 100 | % | 100 | % |
(in thousands of dollars) | Retail Operations | Fiscal 2018 Construction | Consolidated | ||||||||
Net sales from external customers | $ | 6,120,758 | $ | 235,351 | $ | 6,356,109 | |||||
Gross profit | 2,056,010 | 8,579 | 2,064,589 | ||||||||
Depreciation and amortization | 223,175 | 640 | 223,815 | ||||||||
Interest and debt expense (income), net | 52,574 | (56 | ) | 52,518 | |||||||
Income before income taxes and income on and equity in earnings of joint ventures | 203,330 | 4,632 | 207,962 | ||||||||
Income on and equity in earnings of joint ventures | 31 | — | 31 | ||||||||
Total assets | 3,384,277 | 47,092 | 3,431,369 |
(in thousands of dollars) | Retail Operations | Fiscal 2017 Construction | Consolidated | ||||||||
Net sales from external customers | $ | 6,108,037 | $ | 153,440 | $ | 6,261,477 | |||||
Gross profit | 2,054,969 | 6,790 | 2,061,759 | ||||||||
Depreciation and amortization | 230,946 | 649 | 231,595 | ||||||||
Interest and debt expense (income), net | 62,638 | (58 | ) | 62,580 | |||||||
Income before income taxes and income on and equity in earnings of joint ventures | 210,969 | 1,720 | 212,689 | ||||||||
Income on and equity in earnings of joint ventures | 835 | — | 835 | ||||||||
Total assets | 3,650,393 | 32,310 | 3,682,703 |
(in thousands of dollars) | Retail Operations | Fiscal 2016 Construction | Consolidated | ||||||||
Net sales from external customers | $ | 6,071,570 | $ | 185,567 | $ | 6,257,137 | |||||
Gross profit | 2,081,935 | 8,791 | 2,090,726 | ||||||||
Depreciation and amortization | 242,981 | 676 | 243,657 | ||||||||
Interest and debt expense (income), net | 63,127 | (68 | ) | 63,059 | |||||||
Income before income taxes and income on and equity in earnings of joint ventures | 253,887 | 3,788 | 257,675 | ||||||||
Income on and equity in earnings of joint ventures | 45 | — | 45 | ||||||||
Total assets | 3,842,730 | 55,720 | 3,898,450 |
Fiscal Year | Long-Term Debt Maturities | ||
2019 | $ | — | |
2020 | — | ||
2021 | — | ||
2022 | 44.8 | ||
2023 | — |
(in thousands of dollars) | Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | ||||||||
Interest on long-term debt and subordinated debentures | $ | 47,742 | $ | 59,579 | $ | 59,268 | |||||
Revolving credit facility expenses | 4,504 | 2,096 | 2,349 | ||||||||
Amortization of debt expense | 977 | 1,326 | 1,594 | ||||||||
Interest on capital lease obligations | 321 | 418 | 507 | ||||||||
Investment interest income | (1,030 | ) | (842 | ) | (663 | ) | |||||
Other interest | 4 | 3 | 4 | ||||||||
$ | 52,518 | $ | 62,580 | $ | 63,059 |
(in thousands of dollars) | February 2, 2019 | February 3, 2018 | |||||
Trade accounts payable | $ | 743,330 | $ | 657,586 | |||
Accrued expenses: | |||||||
Taxes, other than income | 47,646 | 59,977 | |||||
Salaries, wages and employee benefits | 64,370 | 62,351 | |||||
Liability to customers | 52,677 | 52,215 | |||||
Interest | 3,961 | 4,174 | |||||
Rent | 2,419 | 2,516 | |||||
Other | 6,802 | 6,462 | |||||
$ | 921,205 | $ | 845,281 |
(in thousands of dollars) | Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | ||||||||
Current: | |||||||||||
Federal | $ | 34,960 | $ | 91,799 | $ | 120,872 | |||||
State | 2,436 | 2,466 | 3,331 | ||||||||
37,396 | 94,265 | 124,203 | |||||||||
Deferred: | |||||||||||
Federal | 2,353 | (100,954 | ) | (34,797 | ) | ||||||
State | (2,019 | ) | (1,111 | ) | (906 | ) | |||||
334 | (102,065 | ) | (35,703 | ) | |||||||
$ | 37,730 | $ | (7,800 | ) | $ | 88,500 |
(in thousands of dollars) | Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | ||||||||
Income tax at the statutory federal rate (inclusive of income on and equity in earnings of joint ventures) | $ | 43,679 | $ | 72,000 | $ | 90,202 | |||||
State income taxes, net of federal benefit (inclusive of income on and equity in earnings of joint ventures) | 2,538 | (22 | ) | 954 | |||||||
Net changes in unrecognized tax benefits, interest and penalties /reserves | (421 | ) | (448 | ) | (323 | ) | |||||
Tax benefit of federal credits | (4,563 | ) | (4,440 | ) | (2,434 | ) | |||||
Changes in cash surrender value of life insurance policies | (410 | ) | (441 | ) | (914 | ) | |||||
Changes in valuation allowance | (2,039 | ) | 222 | 1,857 | |||||||
Tax benefit of dividends paid to ESOP | (621 | ) | (810 | ) | (785 | ) | |||||
Estimated adjustments to net deferred tax liabilities for enacted changes in tax laws and rates | (1,521 | ) | (74,216 | ) | — | ||||||
Other | 1,088 | 355 | (57 | ) | |||||||
$ | 37,730 | $ | (7,800 | ) | $ | 88,500 |
(in thousands of dollars) | February 2, 2019 | February 3, 2018 | |||||
Property and equipment bases and depreciation differences | $ | 22,942 | $ | 126,401 | |||
Prepaid expenses | 45,101 | 41,124 | |||||
Joint venture bases differences | 6,889 | 7,889 | |||||
Differences between book and tax bases of inventory | 18,770 | 22,436 | |||||
Other | 2,953 | 3,436 | |||||
Total deferred tax liabilities | 96,655 | 201,286 | |||||
Accruals not currently deductible | (66,325 | ) | (66,941 | ) | |||
Net operating loss carryforwards | (67,512 | ) | (72,452 | ) | |||
State income taxes | (236 | ) | (419 | ) | |||
Other | (2,267 | ) | (1,525 | ) | |||
Total deferred tax assets | (136,340 | ) | (141,337 | ) | |||
Net operating loss valuation allowance | 53,172 | 56,172 | |||||
Net deferred tax assets | (83,168 | ) | (85,165 | ) | |||
Net deferred income taxes | $ | 13,487 | $ | 116,121 |
(in thousands of dollars) | February 2, 2019 | February 3, 2018 | |||||
Net deferred tax assets—other assets | $ | — | $ | (710 | ) | ||
Net deferred tax liabilities—deferred income taxes | 13,487 | 116,831 | |||||
Net deferred income taxes | $ | 13,487 | $ | 116,121 |
(in thousands of dollars) | Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | ||||||||
Unrecognized tax benefits at beginning of period | $ | 3,189 | $ | 4,013 | $ | 4,265 | |||||
Gross increases—tax positions in prior period | 37 | 2 | 43 | ||||||||
Gross decreases—tax positions in prior period | (606 | ) | (710 | ) | (538 | ) | |||||
Gross increases—current period tax positions | 483 | 417 | 386 | ||||||||
Settlements | — | (81 | ) | — | |||||||
Lapse of statutes of limitation | (415 | ) | (452 | ) | (143 | ) | |||||
Unrecognized tax benefits at end of period | $ | 2,688 | $ | 3,189 | $ | 4,013 |
(in thousands of dollars) | February 2, 2019 | February 3, 2018 | |||||
Change in benefit obligation: | |||||||
Benefit obligation at beginning of year | $ | 194,733 | $ | 183,617 | |||
Service cost | 3,687 | 3,494 | |||||
Interest cost | 7,131 | 7,229 | |||||
Actuarial (gain) loss | (6,294 | ) | 5,701 | ||||
Benefits paid | (5,392 | ) | (5,308 | ) | |||
Benefit obligation at end of year | $ | 193,865 | $ | 194,733 | |||
Change in Pension Plan assets: | |||||||
Fair value of Pension Plan assets at beginning of year | $ | — | $ | — | |||
Employer contribution | 5,392 | 5,308 | |||||
Benefits paid | (5,392 | ) | (5,308 | ) | |||
Fair value of Pension Plan assets at end of year | $ | — | $ | — | |||
Funded status (Pension Plan assets less benefit obligation) | $ | (193,865 | ) | $ | (194,733 | ) | |
Amounts recognized in the balance sheets: | |||||||
Accrued benefit liability | $ | (193,865 | ) | $ | (194,733 | ) | |
Net amount recognized | $ | (193,865 | ) | $ | (194,733 | ) | |
Pretax amounts recognized in accumulated other comprehensive loss: | |||||||
Net actuarial loss | $ | 16,880 | $ | 23,702 | |||
Prior service cost | — | — | |||||
Net amount recognized | $ | 16,880 | $ | 23,702 | |||
Accumulated benefit obligation at end of year | $ | (192,982 | ) | $ | (193,824 | ) |
Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | ||||||
Discount rate—net periodic pension cost | 3.7 | % | 4.0 | % | 4.2 | % | ||
Discount rate—benefit obligations | 4.0 | % | 3.7 | % | 4.0 | % | ||
Rate of compensation increases | 2.0 | % | 2.0 | % | 3.0 | % |
(in thousands of dollars) | Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | ||||||||
Components of net periodic benefit costs: | |||||||||||
Service cost | $ | 3,687 | $ | 3,494 | $ | 3,934 | |||||
Interest cost | 7,131 | 7,229 | 7,678 | ||||||||
Net actuarial loss | 529 | — | 1,204 | ||||||||
Amortization of prior service cost | — | — | — | ||||||||
Plan curtailment gain | — | — | — | ||||||||
Net periodic benefit costs | $ | 11,347 | $ | 10,723 | $ | 12,816 | |||||
Other changes in benefit obligations recognized in other comprehensive (income) loss: | |||||||||||
Net actuarial (gain) loss | $ | (6,823 | ) | $ | 5,701 | $ | (9,668 | ) | |||
Amortization of prior service cost | — | — | — | ||||||||
Total recognized in other comprehensive (income) loss | $ | (6,823 | ) | $ | 5,701 | $ | (9,668 | ) | |||
Total recognized in net periodic benefit costs and other comprehensive income or loss | $ | 4,524 | $ | 16,424 | $ | 3,148 |
(in thousands of dollars) | ||||
Fiscal Year | ||||
2019 | $ | 5,391 | * | |
2020 | 9,363 | |||
2021 | 9,601 | |||
2022 | 10,980 | |||
2023 | 11,409 | |||
2024 - 2028 | 70,409 | |||
Total payments for next ten fiscal years | $ | 117,153 |
Type | Par Value | Shares Authorized | ||||
Preferred (5% cumulative) | $ | 100.00 | 5,000 | |||
Additional preferred | $ | 0.01 | 10,000,000 | |||
Class A, common | $ | 0.01 | 289,000,000 | |||
Class B, common | $ | 0.01 | 11,000,000 |
Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | ||||||||||
Cost of shares repurchased | $ | 127,884 | $ | 219,011 | $ | 246,173 | ||||||
Number of shares repurchased | 1,797 | 4,097 | 3,810 | |||||||||
Average price per share | $ | 71.17 | $ | 53.46 | $ | 64.61 |
Amount Reclassified from AOCL | Affected Line Item in the Statement Where Net Income Is Presented | ||||||||
Details about AOCL Components | Fiscal 2018 | Fiscal 2017 | |||||||
Defined benefit pension plan items | |||||||||
Amortization of prior service cost | $ | — | $ | — | (1) | ||||
Amortization of actuarial losses | 529 | — | (1) | ||||||
529 | — | Total before tax | |||||||
128 | — | Income tax expense | |||||||
$ | 401 | $ | — | Total net of tax |
Defined Benefit Pension Plan Items | |||||||
Fiscal 2018 | Fiscal 2017 | ||||||
Beginning balance | $ | 15,444 | $ | 11,137 | |||
Other comprehensive (income) loss before reclassifications | (4,776 | ) | 4,307 | ||||
Amounts reclassified from AOCL | (401 | ) | — | ||||
Reclassification due to the adoption of ASU No. 2018-02 | 2,542 | — | |||||
Net other comprehensive (income) loss | (2,635 | ) | 4,307 | ||||
Ending balance | $ | 12,809 | $ | 15,444 |
Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | |||||||||||||||||||||
(in thousands, except per share data) | Basic | Diluted | Basic | Diluted | Basic | Diluted | |||||||||||||||||
Net earnings available for per-share calculation | $ | 170,263 | $ | 170,263 | $ | 221,324 | $ | 221,324 | $ | 169,220 | $ | 169,220 | |||||||||||
Average shares of common stock outstanding | 27,312 | 27,312 | 29,487 | 29,487 | 34,308 | 34,308 | |||||||||||||||||
Dilutive effect of stock-based compensation | — | — | — | — | — | — | |||||||||||||||||
Total average equivalent shares | 27,312 | 27,312 | 29,487 | 29,487 | 34,308 | 34,308 | |||||||||||||||||
Per share of common stock: | |||||||||||||||||||||||
Net income | $ | 6.23 | $ | 6.23 | $ | 7.51 | $ | 7.51 | $ | 4.93 | $ | 4.93 |
(in thousands of dollars) | Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | ||||||||
Operating leases: | |||||||||||
Buildings: | |||||||||||
Minimum rentals | $ | 14,215 | $ | 14,843 | $ | 15,379 | |||||
Contingent rentals | 3,390 | 3,449 | 3,745 | ||||||||
Equipment | 11,041 | 9,720 | 6,830 | ||||||||
$ | 28,646 | $ | 28,012 | $ | 25,954 |
(in thousands of dollars) Fiscal Year | Operating Leases | Capital Leases | |||||
2019 | $ | 19,847 | $ | 1,428 | |||
2020 | 15,423 | 1,077 | |||||
2021 | 10,691 | 726 | |||||
2022 | 4,896 | — | |||||
2023 | 3,378 | — | |||||
After 2023 | 14,532 | — | |||||
Total minimum lease payments | $ | 68,767 | 3,231 | ||||
Less amount representing interest | (351 | ) | |||||
Present value of net minimum lease payments (of which $1,214 is currently payable) | $ | 2,880 |
Fiscal 2018, Three Months Ended | |||||||||||||||
(in thousands of dollars, except per share data) | May 5 | August 4 | November 3 | February 2 | |||||||||||
Net sales | $ | 1,458,262 | $ | 1,468,023 | $ | 1,419,213 | $ | 2,010,611 | |||||||
Gross profit | 554,521 | 450,846 | 464,276 | 594,946 | |||||||||||
Net income (loss) | 80,548 | (2,868 | ) | 7,425 | 85,158 | ||||||||||
Diluted earnings per share: | |||||||||||||||
Net income (loss) | $ | 2.89 | $ | (0.10 | ) | $ | 0.27 | $ | 3.22 |
Fiscal 2017, Three Months Ended | |||||||||||||||
(in thousands of dollars, except per share data) | April 29 | July 29 | October 28 | February 3 | |||||||||||
Net sales | $ | 1,418,460 | $ | 1,427,280 | $ | 1,354,964 | $ | 2,060,773 | |||||||
Gross profit | 548,375 | 420,226 | 464,888 | 628,270 | |||||||||||
Net income (loss) | 66,302 | (17,080 | ) | 14,539 | 157,563 | ||||||||||
Diluted earnings per share: | |||||||||||||||
Net income (loss) | $ | 2.12 | $ | (0.58 | ) | $ | 0.50 | $ | 5.55 |
• | an estimated tax benefit of approximately $77.4 million ($2.73 per share) related to the Tax Cuts and Jobs Act of 2017 |
• | $2.9 million ($0.11 per share) in tax benefits related to additional federal tax credits and an update of the provisional amounts recorded for the income tax effects of the Tax Cuts and Jobs Act of 2017 |
• | a $4.8 million pretax gain ($3.1 million after tax or $0.11 per share) primarily related to the sale of a store property and insurance recovery on a previously damaged full-line store location partially offset by a loss on the sale of equipment |
• | a pretax charge of $0.8 million ($0.5 million after tax or $0.02 per share) due to the write-off of certain deferred financing fees in connection with the amendment and extension of the Company's senior unsecured revolving credit facility |
Name | State or Other Jurisdiction of Incorporation/ Organization | Name Under Which Subsidiary Is Doing Business | ||
Condev Nevada, Inc. | Nevada | Condev Nevada, Inc. and Dillard's | ||
Dillard Store Services, Inc. | Arizona | Dillard Store Services, Inc. and Dillard's | ||
CDI Contractors, LLC | Arkansas | CDI Contractors, LLC | ||
Construction Developers, LLC | Arkansas | Construction Developers, LLC and Dillard's | ||
Dillard International, LLC. | Nevada | Dillard International, LLC and Dillard's | ||
Dillard Investment Co., Inc. | Delaware | Dillard Investment Co., Inc. and Dillard's | ||
Dillard's Dollars, Inc. | Arkansas | Dillard's Dollars, Inc. and Dillard's | ||
The Higbee Company, LLC | Delaware | The Higbee Company, LLC and Dillard's | ||
U. S. Alpha, Inc. | Nevada | U. S. Alpha, Inc. and Dillard's | ||
Dillard Texas, LLC | Texas | Dillard Texas, LLC and Dillard's | ||
Dillard Tennessee Operating Limited Partnership | Tennessee | Dillard Tennessee Operating Limited Partnership and Dillard's | ||
Dillard's Insurance Company Limited | Bermuda | Dillard's Insurance Company Limited | ||
Dillard Texas Four-Point, LLC | Delaware | Dillard Texas Four-Point, LLC and Dillard's | ||
Dillard Texas East, LLC | Delaware | Dillard Texas East, LLC and Dillard's | ||
Dillard Texas South, LLC | Delaware | Dillard Texas South, LLC and Dillard's | ||
Dillard Texas Central, LLC | Delaware | Dillard Texas Central, LLC and Dillard's | ||
DSS Uniter, LLC | Delaware | DSS Uniter, LLC and Dillard's | ||
Higbee GAK, LP | Delaware | Higbee GAK, LP and Dillard's | ||
Higbee Lancoms, LP | Delaware | Higbee Lancoms, LP and Dillard's | ||
Higbee Salva, LP | Delaware | Higbee Salva, LP and Dillard's | ||
Higbee West Main, LP | Delaware | Higbee West Main, LP and Dillard's | ||
Dillard's Properties, Inc. | Delaware | Dillard's Properties, Inc. | ||
West Main GP, LLC | Delaware | West Main GP, LLC | ||
GAK GP, LLC | Delaware | GAK GP, LLC | ||
Lancoms GP, LLC | Delaware | Lancoms, GP, LLC | ||
Salva GP, LLC | Delaware | Salva GP, LLC | ||
Higbee Investco, LLC | Delaware | Higbee Investco, LLC |
1. | I have reviewed this annual report on Form 10-K of Dillard's, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ William Dillard, II |
William Dillard, II |
Chairman of the Board and Chief Executive Officer |
1. | I have reviewed this annual report on Form 10-K of Dillard's, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Phillip R. Watts |
Phillip R. Watts |
Senior Vice President, Co-Principal Financial Officer and |
Principal Accounting Officer |
1. | I have reviewed this annual report on Form 10-K of Dillard's, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Chris B. Johnson |
Chris B. Johnson |
Senior Vice President and Co-Principal Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) and 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ William Dillard, II |
William Dillard, II |
Chairman of the Board and Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) and 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Phillip R. Watts |
Phillip R. Watts |
Senior Vice President, Co-Principal Financial Officer and |
Principal Accounting Officer |
(1) | The Report fully complies with the requirements of Section 13(a) and 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Chris B. Johnson |
Chris B. Johnson |
Senior Vice President and Co-Principal Financial Officer |
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2019 |
Mar. 02, 2019 |
Aug. 04, 2018 |
|
Entity Registrant Name | DILLARD'S, INC. | ||
Entity Central Index Key | 0000028917 | ||
Document Type | 10-K | ||
Document Period End Date | Feb. 02, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --02-02 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1,548,976,368 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Common Stock Class A | |||
Entity Common Stock, Shares Outstanding | 22,338,129 | ||
Common Stock Class B | |||
Entity Common Stock, Shares Outstanding | 4,010,401 |
Consolidated Balance Sheets (Parenthetical) - shares |
Feb. 02, 2019 |
Feb. 03, 2018 |
---|---|---|
Treasury stock, at cost, Class A, shares | 97,561,424 | 95,764,516 |
Common stock Class A | ||
Common stock, shares issued | 119,899,553 | 119,860,744 |
Common stock, shares outstanding | 22,338,129 | 24,096,228 |
Common stock Class B (convertible) | ||
Common stock, shares issued | 4,010,401 | 4,010,401 |
Common stock, shares outstanding | 4,010,401 | 4,010,401 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
|
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 170,263 | $ 221,324 | $ 169,220 |
Other comprehensive income (loss): | |||
Amortization of retirement plan and other retiree benefit adjustments (net of tax of $1,646, ($1,395) and $3,686) | 5,177 | (4,307) | 5,981 |
Comprehensive income | $ 175,440 | $ 217,017 | $ 175,201 |
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
|
Statement of Comprehensive Income [Abstract] | |||
Amortization of retirement plan and other retiree benefit adjustments, tax | $ 1,646 | $ (1,395) | $ 3,686 |
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
|
Statement of Stockholders' Equity [Abstract] | |||
Issuance of shares under stock option and stock bonus plans, shares | 38,809 | 46,042 | 47,554 |
Purchase of shares of treasury stock, shares | 1,796,908 | 4,096,972 | 3,810,385 |
Cash dividends declared: common stock, per share (in dollars per share) | $ 0.40 | $ 0.34 | $ 0.28 |
Description of Business and Summary of Significant Accounting Policies |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Business and Summary of Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies Description of Business—Dillard's, Inc. ("Dillard's" or the "Company") operates retail department stores, located primarily in the southeastern, southwestern and midwestern areas of the United States, and a general contracting construction company based in Little Rock, Arkansas. The Company's fiscal year ends on the Saturday nearest January 31 of each year. Fiscal year 2018 ended on February 2, 2019 and included 52 weeks, fiscal year 2017 ended on February 3, 2018 and included 53 weeks and fiscal year 2016 ended on January 28, 2017 and included 52 weeks. Consolidation—The accompanying consolidated financial statements include the accounts of Dillard's, Inc. and its wholly owned subsidiaries. Intercompany accounts and transactions are eliminated in consolidation. Investments in and advances to joint ventures are accounted for by the equity method where the Company does not have control. Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include inventories, sales return, self-insured accruals, future cash flows and real estate values for impairment analysis, pension discount rate and taxes. Actual results could differ from those estimates. Seasonality—The Company's business is highly seasonal, and historically the Company has realized a significant portion of its sales, net income and cash flow in the second half of the fiscal year, attributable to the impact of the back-to-school selling season in the third quarter and the holiday selling season in the fourth quarter. Additionally, working capital requirements fluctuate during the year, increasing in the third quarter in anticipation of the holiday season. Cash Equivalents—The Company considers all highly liquid investments with an original maturity of 3 months or less when purchased or certificates of deposit with no early withdrawal penalty to be cash equivalents. The Company considers receivables from charge card companies as cash equivalents because they settle the balances within 2 to 3 days. Accounts Receivable—Accounts receivable primarily consists of construction receivables of the Company's general contracting construction company, CDI Contractors, LLC ("CDI"), and the monthly settlement with Wells Fargo for Dillard's share of earnings from the long-term marketing and servicing alliance. Construction receivables are based on amounts billed to customers. The Company provides any allowance for doubtful accounts considered necessary based upon a review of outstanding receivables, historical collection information and existing economic conditions. Accounts receivable are ordinarily due 30 days after the issuance of the invoice. Contract retentions are due 30 days after completion of the project and acceptance by the owner. Accounts that are past due more than 120 days are considered delinquent. Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the customer. Merchandise Inventories—All of the Company’s inventories are valued at the lower of cost or market using the last-in, first-out (“LIFO”) inventory method. Approximately 97% of the Company's inventories are valued using the LIFO retail inventory method. Under the retail inventory method, the valuation of inventories at cost and the resulting gross margins are calculated by applying a cost to retail ratio to the retail value of inventories. The retail inventory method is an averaging method that is widely used in the retail industry due to its practicality. Inherent in the retail inventory method calculation are certain significant management judgments including, among others, merchandise markon, markups, and markdowns, which significantly impact the ending inventory valuation at cost as well as the resulting gross margins. During periods of deflation, inventory values on the first-in, first-out ("FIFO") retail inventory method may be lower than the LIFO retail inventory method. Additionally, inventory values at LIFO cost may be in excess of net realizable value. At February 2, 2019 and February 3, 2018, merchandise inventories valued at LIFO, including adjustments as necessary to record inventory at the lower of cost or market, approximated the cost of such inventories using the FIFO retail inventory method. The application of the LIFO retail inventory method did not result in the recognition of any LIFO charges or credits affecting cost of sales for fiscal 2018, 2017 or 2016. The Company regularly records a provision for estimated shrinkage, thereby reducing the carrying value of merchandise inventory. Complete physical inventories of all of the Company's stores and warehouses are performed no less frequently than annually, with the recorded amount of merchandise inventory being adjusted to coincide with these physical counts. Property and Equipment—Property and equipment owned by the Company is stated at cost, which includes related interest costs incurred during periods of construction, less accumulated depreciation and amortization. Interest capitalized during fiscal 2018, 2017 and 2016 was $0.2 million, $0.7 million and $0.1 million, respectively. For financial reporting purposes, depreciation is computed by the straight-line method over estimated useful lives:
Properties leased by the Company under lease agreements which are determined to be capital leases are stated at an amount equal to the present value of the minimum lease payments during the lease term, less accumulated amortization. The assets under capital leases and leasehold improvements under operating leases are amortized on the straight-line method over the shorter of their useful lives or the related lease terms. The provision for amortization of leased properties is included in depreciation and amortization expense. Included in property and equipment as of February 2, 2019 are assets held for sale in the amount of $8.6 million. During fiscal 2018, the Company received cash proceeds of$1.9 million from the sale of a location classified as an asset held for sale. During fiscal 2017, the Company realized a gain of $4.9 million on disposal of assets primarily related to the sale of two store properties, insurance recovery on a previously damaged full-line store location and sale of equipment. During 2016, the Company realized gains on the disposal of property and equipment of $0.9 million. Depreciation expense on property and equipment was approximately $224 million, $232 million and $244 million for fiscal 2018, 2017 and 2016, respectively. Long-Lived Assets—Impairment losses are required to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. In the evaluation of the fair value and future benefits of long-lived assets, the Company performs an analysis of the anticipated undiscounted future net cash flows of the related long-lived assets. This analysis is performed at the store unit level. If the carrying value of the related asset exceeds the fair value, the carrying value is reduced to its fair value. Various factors including future sales growth, profit margins and real estate values are included in this analysis. Management believes at this time that the carrying values and useful lives continue to be appropriate. Other Assets—In January 2011, the Company formed a wholly-owned subsidiary intended to operate as a real estate investment trust (“REIT”). The Company made a taxable transfer of certain properties to this subsidiary, thereby increasing the tax basis of the properties to their fair values as of the date of transfer ("REIT Transaction") and recorded a deferred charge to reflect the income tax effects of this intra-entity transfer. At February 2, 2019 and February 3, 2018, other assets included the deferred charge related to the REIT Transaction of $0 and $173.7 million, respectively. See Recently Adopted Accounting Pronouncements, Intra-Entity Transfers of Assets Other Than Inventory, for further discussion below. Other assets also include investments accounted for by the equity and cost methods. During fiscal 2016, the Company invested $20.0 million in an existing open air center joint venture located in Bonita Springs, Florida. The investment was funded using cash on hand. The joint venture used these funds in the refinancing of its debt. During fiscal 2016, the Company recorded an asset impairment of $6.5 million consisting of the write-down of a cost method investment. Vendor Allowances—The Company receives concessions from its vendors through a variety of programs and arrangements, including cooperative advertising and margin maintenance programs. The Company has agreements in place with each vendor setting forth the specific conditions for each allowance or payment. These agreements range in periods from a few days to up to a year. If the payment is a reimbursement for costs incurred, it is offset against those related costs; otherwise, it is treated as a reduction to the cost of the merchandise. Amounts of vendor concessions are recorded only when an agreement has been reached with the vendor and the collection of the concession is deemed probable. For cooperative advertising programs, the Company generally offsets the allowances against the related advertising expense when incurred. Many of these programs require proof-of-advertising to be provided to the vendor to support the reimbursement of the incurred cost. Programs that do not require proof-of-advertising are monitored to ensure that the allowance provided by each vendor is a reimbursement of costs incurred to advertise for that particular vendor. If the allowance exceeds the advertising costs incurred on a vendor-specific basis, then the excess allowance from the vendor is recorded as a reduction of merchandise cost for that vendor. Margin maintenance allowances are credited directly to cost of purchased merchandise in the period earned according to the agreement with the vendor. Under the retail method of accounting for inventory, a portion of these allowances reduces cost of goods sold and a portion reduces the carrying value of merchandise inventory. Insurance Accruals—The Company's consolidated balance sheets include liabilities with respect to self-insured workers' compensation and general liability claims. The Company's self-insured retention is insured through a wholly-owned captive insurance subsidiary. The Company estimates the required liability of such claims, utilizing an actuarial method, based upon various assumptions, which include, but are not limited to, the Company's historical loss experience, projected loss development factors, actual payroll and other data. The required liability is also subject to adjustment in the future based upon the changes in claims experience, including changes in the number of incidents (frequency) and changes in the ultimate cost per incident (severity). These insurance accruals are recorded in trade accounts payable and accrued expenses and other liabilities on the consolidated balance sheets. Operating Leases—The Company leases retail stores, office space and equipment under operating leases. Many store leases contain construction allowance reimbursements by landlords, rent holidays, rent escalation clauses and/or contingent rent provisions. The Company recognizes the related rental expense on a straight-line basis over the lease term and records the difference between the amounts charged to expense and the rent paid as a deferred rent liability. To account for construction allowance reimbursements from landlords and rent holidays, the Company records a deferred rent liability in other liabilities on the consolidated balance sheets and amortizes the deferred rent over the lease term, as a reduction to rent expense on the consolidated income statements. For leases containing rent escalation clauses, the Company records minimum rent expense on a straight-line basis over the lease term on the consolidated income statement. The lease term used for lease evaluation includes renewal option periods only in instances in which the exercise of the option period can be reasonably assured and failure to exercise such options would result in an economic penalty. Revenue Recognition—The Company's retail operations segment recognizes merchandise revenue at the "point of sale." Allowance for sales returns and a return asset are recorded as components of net sales in the period in which the related sales are recorded. Sales taxes collected from customers are excluded from revenue and are recorded in trade accounts payable and accrued expenses until remitted to the taxing authorities. Wells Fargo Bank, N.A. ("Wells Fargo") owns and manages Dillard's private label cards under a 10-year agreement ("Wells Fargo Alliance"). The Company's share of income under the Wells Fargo Alliance is included as a component of service charges and other income. The Company received income of approximately $94 million, $101 million and $104 million from the Wells Fargo and former Synchrony alliances in fiscal 2018, 2017 and 2016, respectively. The Company participates in the marketing of the private label credit cards, which includes the cost of customer reward programs. Through the reward programs, customers earn points that are redeemable for discounts on future purchases. The Company defers a portion of its net sales upon the sale of merchandise to its customer reward program members that is recognized in net sales when the reward is redeemed or expired at a future date. Revenue from CDI construction contracts is generally measured based on the ratio of costs incurred to total estimated contract costs (the "cost-to-cost method"). The length of each contract varies but is typically nine to eighteen months. The progress towards completion is determined by relating the actual costs of work performed to date to the current estimated total costs of the respective contracts. When the estimate on a contract indicates a loss, the entire loss is recorded in the current period. Gift Card Revenue Recognition—The Company establishes a liability upon the sale of a gift card. The liability is relieved and revenue is recognized when gift cards are redeemed for merchandise. Gift card breakage income is determined based upon historical redemption patterns. The Company uses a homogeneous pool to recognize gift card breakage and will recognize income over the period in proportion to the pattern of rights exercised by the customer when the Company determines that it does not have a legal obligation to remit the value of unredeemed gift cards to the relevant jurisdiction as abandoned property. At that time, the Company will recognize breakage income over the performance period for those gift cards (i.e. 60 months) and will record it in service charges and other income. As of February 2, 2019 and February 3, 2018, gift card liabilities of $58.2 million and $58.9 million, respectively, were included in trade accounts payable and accrued expenses and other liabilities. Advertising—Advertising and promotional costs, which include newspaper, magazine, Internet, broadcast and other media advertising, are expensed as incurred and were approximately $40.4 million, $42.5 million and $42.8 million, net of cooperative advertising reimbursements of $15.1 million, $19.9 million and $27.5 million for fiscal years 2018, 2017 and 2016, respectively. The Company records net advertising expenses in selling, general and administrative expenses. Income Taxes—Income taxes are recognized for the amount of taxes payable for the current year and deferred tax assets and liabilities for the future tax consequence of events that have been recognized differently in the financial statements than for tax purposes. Deferred tax assets and liabilities are established using statutory tax rates and are adjusted for tax rate changes. Tax positions are analyzed to determine whether it is "more likely than not" that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. For those tax positions where it is not "more likely than not" that a tax benefit will be sustained, no tax benefit is recognized. The Company classifies accrued interest expense and penalties relating to income tax in the consolidated financial statements as income tax expense. Shipping and Handling—The Company records shipping and handling reimbursements in service charges and other income. The Company records shipping and handling costs in cost of sales. Defined Benefit Retirement Plans—The Company's defined benefit retirement plan costs are accounted for using actuarial valuations. The Company recognizes the funded status of its defined benefit pension plans on the balance sheet and recognizes changes in the funded status that arise during the period but that are not recognized as components of net periodic benefit cost, within other comprehensive income, net of income taxes. Income on and Equity in Earnings of Joint Ventures—Income on and equity in earnings of joint ventures includes the Company's portion of the income or loss of the Company's unconsolidated joint ventures as well as distributions (excluding returns of investments) of excess cash from an open air center joint venture. Comprehensive Income—Comprehensive income is defined as the change in equity (net assets) of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. It consists of the net income or loss and other gains and losses affecting stockholders' equity that, under GAAP, are excluded from net income or loss. One such exclusion is the amortization of retirement plan and other retiree benefit adjustments, which is the only item impacting our accumulated other comprehensive loss. Supply Concentration—The Company purchases merchandise from many sources and does not believe that the Company was dependent on any one supplier during fiscal 2018. Reclassifications—Certain items have been reclassified from their prior year classifications to conform to the current year presentation. These reclassifications had no effect on net income or stockholders' equity as previously reported. Recently Adopted Accounting Pronouncements Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which stipulates that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, an entity should apply the following steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. This ASU was supplemented by amendments which clarify the guidance of the initial ASU. We refer to this ASU and related amendments as the "new standard." We adopted the requirements of the new standard as of February 4, 2018, utilizing the full retrospective method of transition. Adoption of the new standard resulted in changes to our accounting policies for revenue recognition, as further described herein. We applied the new standard using the following practical expedients: (1) for a completed contract for which all (or substantially all) of the revenue was recognized in accordance with revenue guidance that was in effect before the date of initial application, an entity need not restate contracts that begin and end within the same annual reporting period; (2) for completed contracts that have variable consideration, an entity may use the transaction price at the date the contract was completed, rather than estimating variable consideration amounts in the comparative reporting periods; (3) for all reporting periods presented before the date of initial application, February 4, 2018, an entity is not required to disclose the amount of the transaction price allocated to the remaining performance obligations or when the entity expects to recognize that amount as revenue; and (4) for contracts modified prior to the beginning of fiscal year 2016, an entity can reflect the aggregate effect of all contract modifications that occurred before the beginning of the earliest period presented under the new standard when identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price to the satisfied and unsatisfied performance obligations for the modified contract at transition. The application of these practical expedients primarily impacted our evaluation of the revenue recognition of our construction segment. Through our analysis of the new standard, we considered the presentation of sales returns, the deferral of revenue related to our loyalty program, the deferral of revenue related to internet sales, credit card income, gift card breakage, principal versus agent considerations and revenue from our construction segment contracts. The impact of adopting the new standard on our fiscal 2017 and 2016 revenues was not material. We adjusted our consolidated financial statements from amounts previously reported due to the adoption of the new standard. The Company's net sales are recorded net of anticipated returns of merchandise. Under the new standard, both a return asset and an allowance for sales returns are recorded, which differs from the historical presentation of a net allowance for sales returns. The return asset and the allowance for sales returns are recorded in the consolidated balance sheets in other current assets and trade accounts payable and accrued expenses, respectively. Additionally, we reclassified contract assets related to our construction segment from accounts receivable to other current assets in our consolidated balance sheets. Select consolidated balance sheet line items, which reflect the adoption of the new standard, are as follows (in thousands):
Select consolidated statements of income line items, including net sales and service charges and other income, reflect the adoption of the new standard. The impact of the adoption on the consolidated statements of income for the fiscal years ended February 3, 2018 and January 28, 2017 was not material. Select consolidated statement of cash flow line items within operating activities reflect the adoption of the new standard. The impact on the consolidated statements of cash flows for the fiscal years ended February 3, 2018 and January 28, 2017 was not material. The Company operates in two reportable segments: the operation of retail department stores (“retail operations”) and a general contracting construction company (“construction”). The Company determined that the presentation of the percentage of net sales by segment and major product line was consistent with the disaggregation of revenue required by the new standard. See Note 2, Business Segments. For the retail operations segment, total assets increased by $9.5 million as of February 3, 2018. 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 consolidated balance sheets. Retail operations segment contract liabilities are as follows:
During the fiscal years ended February 2, 2019 and February 3, 2018, the Company recorded $55.3 million and $54.9 million, respectively, in revenue that was previously included in the retail operations contract liability balances of $73.1 million and $73.6 million, at February 3, 2018 and January 28, 2017, respectively. Construction contracts give rise to accounts receivable, contract assets and contract liabilities. We record accounts receivable based on amounts billed to 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 consolidated balance sheets, respectively. The amounts included in the consolidated balance sheets are as follows:
During the fiscal years ended February 2, 2019 and February 3, 2018, the Company recorded $5.2 million and $8.6 million, respectively, in revenue that was previously included in billings in excess of costs and estimated earnings on uncompleted contracts of $5.5 million and $8.8 million at February 3, 2018 and January 28, 2017, respectively. The remaining performance obligations related to executed construction contracts totaled $143.9 million and $273.9 million at February 2, 2019 and February 3, 2018, respectively. Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost In March 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, to improve the presentation of net periodic pension cost in the income statement. We adopted the requirements of ASU No. 2017-07 as of February 4, 2018 and applied the amendments retrospectively, as required. As a result of the adoption of ASU No. 2017-07, the service cost component of net periodic benefit costs is included in selling, general and administrative expenses, and the interest costs and net actuarial loss components are included in other expense in the consolidated statements of income. For the fiscal years ended February 3, 2018 and January 28, 2017, $7.2 million and $8.9 million has been reclassified from selling, general and administrative expenses to other expense, respectively. See Note 8, Benefit Plans. Intra-Entity Transfers of Assets Other Than Inventory In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory, as part of its initiative to reduce complexity in accounting standards. Under these amendments, an entity is required to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments within ASU No. 2016-16 were effective for the Company beginning in the first quarter of fiscal 2018. At February 3, 2018, other assets included a deferred charge related to the income tax effects of the intra-entity transfer pursuant to the previously disclosed REIT Transaction. During the fourth quarter of 2017, the Company terminated REIT status of its subsidiary, which did not have a material impact to the Company’s fiscal 2017 consolidated financial statements. Prior to the adoption of ASU No. 2016-16, income tax consequences of the intra-entity transfer remained recorded as a deferred charge, which was not subject to remeasurement for the lower tax rates enacted through tax reform. The Company adopted the standard at the beginning of the first quarter of fiscal 2018, at which time the deferred charge was removed through a cumulative-effect adjustment directly to retained earnings, resulting in a decrease to other assets of approximately $173.7 million. A deferred tax asset of approximately $104.6 million was recorded through a cumulative-effect adjustment directly to retained earnings to reflect future income tax benefits of the intra-entity transfer at newly-enacted tax rates, resulting in a reduction to net deferred tax liabilities. These adjustments resulted in a net decrease to retained earnings of approximately $69.1 million. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the FASB issued ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, to improve the usefulness of information reported to financial statement users by allowing a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The Company adopted ASU No. 2018-02 during the first quarter of fiscal 2018 and applied the amendments in the period of adoption. The adoption of ASU No. 2018-02 resulted in an increase of approximately $2.5 million to both accumulated other comprehensive loss and retained earnings in the Company’s consolidated financial statements. Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, to reduce the diversity in practice of how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments within ASU No. 2016-15 are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted the standard during the first quarter of fiscal 2018. The adoption of ASU No. 2016-15 did not have a material impact to the consolidated financial statements. Recently Issued Accounting Pronouncements Leases: Amendments to the FASB Accounting Standards Codification In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842): Amendments to the FASB Accounting Standards Codification, to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. Under these amendments, lessees are required to recognize lease assets and lease liabilities for leases classified as operating leases under ASC 840. Subsequent to the issuance of ASC No. 2016-02, the FASB issued additional amendments related to ASU No. 2016-02: (1) ASU No. 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842; (2) ASU No. 2018-10: Codification Improvements to Topic 842, Leases; and (3) ASU No. 2018-11, Leases (Topic 842): Targeted Improvements. ASU No. 2016-02 and related amendments are effective for financial statements issued for fiscal years beginning after December 15, 2018. The Company's operating leases include building and equipment leases. We have finalized our evaluation of these existing operating leases and have concluded that the majority of the existing operating leases will be impacted by this ASU and related amendments resulting in increases in assets and liabilities in the Company's consolidated financial statements. Upon adoption, we expect the right of use assets and operating lease liabilities will be materially consistent with the future minimum rental commitments for the operating leases totaling $68.8 million as of February 2, 2019, as detailed in Note 12. We are finalizing our incremental borrowing rate methodology that will be used in valuing the right of use assets and operating lease liabilities. We will adopt these amendments during the first quarter of fiscal 2019 using the optional transition method allowing the application of the new standard at the adoption date with comparative periods presented in accordance with ASC 840. Defined Benefit Plans: Changes to the Disclosure Requirements for Defined Benefit Plans In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans, to improve the effectiveness of disclosures in the notes to financial statements for employers that sponsor defined benefit pension plans. ASU No. 2018-14 is effective for financial statements issued for fiscal years ending after December 15, 2020, and early adoption is permitted. The Company is currently assessing the impact of this update on its notes to financial statements. |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments | Business Segments The Company operates in two reportable segments: the operation of retail department stores and a general contracting construction company. For the Company's retail operations reportable segment, the Company determined its operating segments on a store by store basis. Each store's operating performance has been aggregated into one reportable segment. The Company's operating segments are aggregated 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 one store format under the Dillard's name where each store offers the same general mix of merchandise with similar categories and similar customers. The Company believes that disaggregating its operating segments would not provide meaningful additional information. The following table summarizes the percentage of net sales by segment and major product line:
The following tables summarize certain segment information, including the reconciliation of those items to the Company's consolidated operations.
Intersegment construction revenues of $30.2 million, $47.4 million and $75.5 million were eliminated during consolidation and have been excluded from net sales for fiscal years 2018, 2017 and 2016, respectively. |
Revolving Credit Agreement |
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Line of Credit Facility [Abstract] | |
Revolving Credit Agreement | Revolving Credit Agreement In August 2017, the Company amended and extended its senior unsecured revolving credit facility (the "new credit agreement") replacing the Company's previous credit agreement. The new credit agreement is available to the Company for general corporate purposes including, among other uses, working capital financing, the issuance of letters of credit, capital expenditures and, subject to certain restrictions, the repayment of existing indebtedness and share repurchases. The new credit agreement provides borrowing capacity of $800 million with a $200 million expansion option and matures on August 9, 2022. The Company pays a variable rate of interest on borrowings under the credit agreement and a commitment fee to the participating banks based on the Company's debt rating. The rate of interest on borrowings is LIBOR plus 1.375%, and the commitment fee for unused borrowings is 0.20% per annum. No borrowings were outstanding at February 2, 2019. Letters of credit totaling $21.8 million were issued under this credit agreement leaving unutilized availability under the facility of $778.2 million at February 2, 2019. The Company had weighted-average borrowings of $85.9 million, $9.5 million and $19.8 million during fiscal 2018, 2017 and 2016, respectively. To be in compliance with the financial covenants of the new credit agreement, the Company's total leverage ratio cannot exceed 3.5 to 1.0, and the coverage ratio cannot be less than 2.5 to 1.0, as defined in the new credit agreement. At February 2, 2019, the Company was in compliance with all financial covenants related to the new credit agreement. In connection with the amendment and extension of the Company's senior unsecured revolving credit facility, we recorded charges totaling $0.8 million due to the the write-off of certain deferred financing fees during the year ended February 3, 2018. Peak borrowings under the credit facility were $329 million during fiscal 2018. |
Long-Term Debt |
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Long-term Debt, Unclassified [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt Long-term debt, including the current portion, of $365.6 million and $526.4 million was outstanding at February 2, 2019 and February 3, 2018, respectively. The debt outstanding at February 2, 2019 consisted of unsecured notes, bearing interest rates ranging from 7.000% to 7.875% and maturing during fiscal 2022 through fiscal 2028. There are no financial covenants under any of the debt agreements. Long-term debt maturities over the next five years are (in millions):
Net interest and debt expense consists of the following:
Interest paid during fiscal 2018, 2017 and 2016 was approximately $52.9 million, $71.6 million and $62.4 million, respectively. |
Trade Accounts Payable and Accrued Expenses |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trade Accounts Payable and Accrued Expenses | Trade Accounts Payable and Accrued Expenses Trade accounts payable and accrued expenses consist of the following:
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The provision for federal and state income taxes is summarized as follows:
The Tax Cuts and Jobs Act (“the Act”) was signed into law on December 22, 2017. The Act’s primary impact to the Company’s consolidated financial statements was its reduction of the federal corporate income tax rate from 35% to 21%, effective January 1, 2018. The resulting blended federal statutory income tax rate in effect for the Company’s fiscal year ended February 3, 2018 was 33.72%. For prior years, the federal statutory tax rate was 35%. The Company determined a reasonable estimate of the income tax effects of the Act and recorded provisional amounts within its consolidated financial statements during 2017. During fiscal 2018, the Company finalized its accounting of the income tax effects of the Act, within the one-year measurement period provided under SEC Staff Accounting Bulletin No. 118. The rate reconciliation presented below reconciles the Company’s income tax provision to income taxes using the federal statutory income tax rate. As noted above, the federal statutory rates are 21%, 33.72%, and 35% for fiscal years 2018, 2017, and 2016, respectively.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities as of February 2, 2019 and February 3, 2018 are as follows:
For fiscal 2018 and 2017, deferred tax assets and liabilities were measured using the federal statutory income tax rate of 21% and the appropriate state statutory income tax rates. At February 2, 2019, the Company had a deferred tax asset related to state net operating loss carryforwards of approximately $67.5 million that could be utilized to reduce the tax liabilities of future years. These carryforwards will expire between fiscal 2019 and 2039. A portion of the deferred tax asset attributable to state net operating loss carryforwards was reduced by a valuation allowance of approximately $53.2 million for the losses of various members of the affiliated group in states for which the Company determined that it is "more likely than not" that the benefit of the net operating losses will not be realized. See Recently Adopted Accounting Pronouncements in Note 1 for the Company’s adoption of ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory and the impact of the adoption on deferred taxes. Deferred tax assets and liabilities are presented as follows in the accompanying consolidated balance sheets:
The total amount of unrecognized tax benefits as of February 2, 2019 was $2.7 million, of which $1.6 million would, if recognized, affect the Company’s effective tax rate. The total amount of unrecognized tax benefits as of February 3, 2018 was $3.2 million, of which $2.3 million would, if recognized, affect the Company's effective tax rate. The Company does not expect a significant change in unrecognized tax benefits in the next twelve months. Where applicable, associated interest and penalties are also recorded. The total amounts of interest and penalties were not material. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
The fiscal tax years that remain subject to examination for the federal tax jurisdiction and major state tax jurisdictions are 2015 and forward. At this time, the Company does not expect the results from any income tax audit to have a material impact on the Company's consolidated financial statements. Income taxes paid, net of income tax refunds received, during fiscal 2018, 2017 and 2016 were approximately $68.4 million, $93.9 million and $129.4 million, respectively. |
Subordinated Debentures |
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Subordinated Debentures | |
Subordinated Debentures | Subordinated Debentures At February 2, 2019, the Company had $200 million outstanding of its 7.5% subordinated debentures due August 1, 2038. All of these subordinated debentures were held by Dillard's Capital Trust I ("Trust"), a 100% owned unconsolidated finance subsidiary of the Company. The subordinated debentures are the sole asset of the Trust. The Company has the right to defer the payment of interest on the subordinated debentures at any time for a period not to exceed 20 consecutive quarters. At February 2, 2019, the Trust had outstanding $200 million liquidation amount of 7.5% Capital Securities, due August 1, 2038 (the "Capital Securities"). Holders of the Capital Securities are entitled to receive cumulative cash distributions, payable quarterly, at the annual rate of 7.5% of the liquidation amount of $25 per Capital Security. The Capital Securities are subject to mandatory redemption upon repayment of the Company's subordinated debentures. The Company's obligations under the subordinated debentures and related agreements, taken together, provide a full and unconditional guarantee of payments due on the Capital Securities. The Trust is a variable interest entity and is not consolidated into the Company's financial statements, since the Company is not the primary beneficiary of the Trust. |
Benefit Plans |
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Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefit Plans | Benefit Plans The Company has a retirement plan with a 401(k)-salary deferral feature for eligible employees. Under the terms of the plan, eligible employees could contribute up to the lesser of $18,500 ($24,500 if at least 50 years of age) or 75% of eligible pay. Eligible employees with 1 year of service, who elect to participate in the plan or are auto-enrolled, receive a Company matching contribution. Company matching contributions are calculated on the eligible employee's first 6% of elective deferrals with the first 1% being matched 100% and the next 5% being matched 50%. The Company matching contributions are used to purchase Class A Common Stock of the Company for the benefit of the employee. This stock may be immediately diversified into any of the other funds within the plan at the election of the employee. The terms of the plan provide a two-year vesting schedule for the Company matching contribution portion of the plan. The Company incurred benefit plan expense of approximately $19 million for fiscal 2018 and $18 million for each of fiscal 2017 and 2016. Benefit plan expenses are included in selling, general and administrative expenses. 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. Pension expense is determined using an actuarial cost method to estimate the total benefits ultimately payable to officers and allocates this cost to service periods. The actuarial assumptions used to calculate pension costs are reviewed annually. The service cost component of net periodic benefit costs is included in selling, general and administrative expenses, and the interest costs and net actuarial loss components are included in other expense in the consolidated statements of income. The accumulated benefit obligations, change in projected benefit obligation, change in Pension Plan assets, funded status, and reconciliation to amounts recognized in the consolidated balance sheets are as follows:
The accrued benefit liability is included in other liabilities. At February 2, 2019 and February 3, 2018, the current portion of the accrued benefit liability of $5.3 million $5.0 million, respectively, is included in trade accounts payable and accrued expenses. The discount rate that the Company utilizes for determining future pension obligations is based on the FTSE Above Median Pension Index Curve (formerly the Citigroup Above Median Pension Index Curve) on its annual measurement date as of the end of each fiscal year and is matched to the future expected cash flows of the benefit plans by annual periods. The discount rate increased to 4.0% as of February 2, 2019 from 3.7% as of February 3, 2018. Weighted average assumptions are as follows:
The components of net periodic benefit costs are as follows:
The estimated future benefits payments for the nonqualified benefit plan are as follows:
___________________________________ * The estimated benefit payment for fiscal 2019 also represents the amount the Company expects to contribute to the Pension Plan for fiscal 2019. |
Stockholders' Equity |
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders' Equity Capital stock is comprised of the following:
Holders of Class A are empowered as a class to elect one-third of the members of the Board of Directors, and the holders of Class B are empowered as a class to elect two-thirds of the members of the Board of Directors. Shares of Class B are convertible at the option of any holder thereof into shares of Class A at the rate of one share of Class B for one share of Class A. Stock Repurchase Programs All repurchases of the Company's Class A Common Stock were made at the market price at the trade date and all amounts paid to reacquire these shares were allocated to Treasury Stock. Stock Plans The Company’s Board of Directors has authorized the Company to repurchase the Company’s Class A Common Stock under open-ended stock repurchase plans. The following is a summary of share repurchase activity for the periods indicated (in thousands, except per share data):
On March 1, 2018, the Company announced that the Company's Board of Directors approved a new stock repurchase program authorizing the Company to repurchase up to $500 million of its Class A Common Stock ("March 2018 Stock Plan"). During fiscal 2018, the Company completed the authorization under the Company's previous stock repurchase plan authorized by the Company's Board of Directors in February 2016 and began share repurchases under the March 2018 Stock Plan. As of February 2, 2019, $406.9 million authorization remained under this stock repurchase plan. |
Accumulated Other Comprehensive Loss ("AOCL") |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss (AOCL) | Accumulated Other Comprehensive Loss ("AOCL") Reclassifications from AOCL Reclassifications from AOCL are summarized as follows (in thousands):
_____________________________ (1) These items are included in the computation of net periodic benefit costs. See Note 8 for additional information. Changes in AOCL Changes in AOCL by component (net of tax) are summarized as follows (in thousands):
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Earnings per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share | Earnings per Share Basic earnings per share has been computed based upon the weighted average of Class A and Class B common shares outstanding. As no stock options or other dilutive securities were outstanding during any of the respective periods, the calculation of basic and dilutive earnings per share are the same. Earnings per common share has been computed as follows:
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Rental expense consists of the following:
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 future minimum rental commitments as of February 2, 2019 for all non-cancelable leases for buildings and equipment are as follows:
Renewal options from three to 20 years exist on the majority of leased properties. At February 2, 2019, the Company is committed to incur costs of approximately $1.3 million to acquire, complete and furnish certain stores and equipment. At February 2, 2019, letters of credit totaling $21.8 million were issued under the Company's $800 million revolving credit facility. 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 is not expected to materially affect the Company's financial position, cash flows or results of operations. |
Asset Impairment and Store Closing Charges |
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Asset Impairment and Store Closing Charges | |
Asset Impairment and Store Closing Charges | Asset Impairment and Store Closing Charges During fiscal 2018 and 2017, no asset impairment and store closing charges were recorded. During fiscal 2016, the Company recorded a pretax charge of $6.5 million for asset impairment. The charge was for the write-down of a certain cost method investment. |
Fair Value Disclosures |
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Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | Fair Value Disclosures The estimated fair values of financial instruments which are presented herein have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of amounts the Company could realize in a current market exchange. The fair value of the Company's long-term debt and subordinated debentures is based on market prices and are categorized as Level 1 in the fair value hierarchy. The fair value of the Company's cash and cash equivalents and trade accounts receivable approximates their carrying values at February 2, 2019 and February 3, 2018 due to the short-term maturities of these instruments. The fair values of the Company's long-term debt at February 2, 2019 and February 3, 2018 were approximately $384 million and $571 million, respectively. The carrying value of the Company's long-term debt at February 2, 2019 and February 3, 2018 was approximately $366 million and $526 million, respectively. The fair value of the subordinated debentures at February 2, 2019 and February 3, 2018 was approximately $215 million and $203 million, respectively. The carrying value of the subordinated debentures at February 2, 2019 and February 3, 2018 was $200 million. During fiscal 2016, the Company recognized an impairment charge of $6.5 million on a cost method investment. The Company evaluated all factors and determined that an other-than-temporary impairment charge was necessary. Cost method investments are recorded in other assets on the consolidated balance sheets. |
Quarterly Results of Operations (unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Results of Operations (unaudited) | Quarterly Results of Operations (unaudited)
Total of quarterly earnings per common share may not equal the annual amount because net income per common share is calculated independently for each quarter. Quarterly information for fiscal 2018 and fiscal 2017 includes the following items: Fourth Quarter 2017
Third Quarter 2018
2017
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Description of Business and Summary of Significant Accounting Policies (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||
Revenue Recognition Gift Cards Breakage [Policy Text Block] | Gift Card Revenue Recognition—The Company establishes a liability upon the sale of a gift card. The liability is relieved and revenue is recognized when gift cards are redeemed for merchandise. Gift card breakage income is determined based upon historical redemption patterns. The Company uses a homogeneous pool to recognize gift card breakage and will recognize income over the period in proportion to the pattern of rights exercised by the customer when the Company determines that it does not have a legal obligation to remit the value of unredeemed gift cards to the relevant jurisdiction as abandoned property. At that time, the Company will recognize breakage income over the performance period for those gift cards (i.e. 60 months) and will record it in service charges and other income. |
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Consolidation | Consolidation—The accompanying consolidated financial statements include the accounts of Dillard's, Inc. and its wholly owned subsidiaries. Intercompany accounts and transactions are eliminated in consolidation. Investments in and advances to joint ventures are accounted for by the equity method where the Company does not have control. |
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Use of Estimates | Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include inventories, sales return, self-insured accruals, future cash flows and real estate values for impairment analysis, pension discount rate and taxes. Actual results could differ from those estimates. |
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Cash Equivalents and Restricted Cash | Cash Equivalents—The Company considers all highly liquid investments with an original maturity of 3 months or less when purchased or certificates of deposit with no early withdrawal penalty to be cash equivalents. The Company considers receivables from charge card companies as cash equivalents because they settle the balances within 2 to 3 days. |
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Accounts Receivable | Accounts Receivable—Accounts receivable primarily consists of construction receivables of the Company's general contracting construction company, CDI Contractors, LLC ("CDI"), and the monthly settlement with Wells Fargo for Dillard's share of earnings from the long-term marketing and servicing alliance. Construction receivables are based on amounts billed to customers. The Company provides any allowance for doubtful accounts considered necessary based upon a review of outstanding receivables, historical collection information and existing economic conditions. Accounts receivable are ordinarily due 30 days after the issuance of the invoice. Contract retentions are due 30 days after completion of the project and acceptance by the owner. Accounts that are past due more than 120 days are considered delinquent. Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the customer. |
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Merchandise Inventories | Merchandise Inventories—All of the Company’s inventories are valued at the lower of cost or market using the last-in, first-out (“LIFO”) inventory method. Approximately 97% of the Company's inventories are valued using the LIFO retail inventory method. Under the retail inventory method, the valuation of inventories at cost and the resulting gross margins are calculated by applying a cost to retail ratio to the retail value of inventories. The retail inventory method is an averaging method that is widely used in the retail industry due to its practicality. Inherent in the retail inventory method calculation are certain significant management judgments including, among others, merchandise markon, markups, and markdowns, which significantly impact the ending inventory valuation at cost as well as the resulting gross margins. During periods of deflation, inventory values on the first-in, first-out ("FIFO") retail inventory method may be lower than the LIFO retail inventory method. Additionally, inventory values at LIFO cost may be in excess of net realizable value. At February 2, 2019 and February 3, 2018, merchandise inventories valued at LIFO, including adjustments as necessary to record inventory at the lower of cost or market, approximated the cost of such inventories using the FIFO retail inventory method. The application of the LIFO retail inventory method did not result in the recognition of any LIFO charges or credits affecting cost of sales for fiscal 2018, 2017 or 2016. The Company regularly records a provision for estimated shrinkage, thereby reducing the carrying value of merchandise inventory. Complete physical inventories of all of the Company's stores and warehouses are performed no less frequently than annually, with the recorded amount of merchandise inventory being adjusted to coincide with these physical counts. |
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Property and Equipment | Property and Equipment—Property and equipment owned by the Company is stated at cost, which includes related interest costs incurred during periods of construction, less accumulated depreciation and amortization. Interest capitalized during fiscal 2018, 2017 and 2016 was $0.2 million, $0.7 million and $0.1 million, respectively. For financial reporting purposes, depreciation is computed by the straight-line method over estimated useful lives:
Properties leased by the Company under lease agreements which are determined to be capital leases are stated at an amount equal to the present value of the minimum lease payments during the lease term, less accumulated amortization. The assets under capital leases and leasehold improvements under operating leases are amortized on the straight-line method over the shorter of their useful lives or the related lease terms. The provision for amortization of leased properties is included in depreciation and amortization expense. |
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Long-Lived Assets | Long-Lived Assets—Impairment losses are required to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. In the evaluation of the fair value and future benefits of long-lived assets, the Company performs an analysis of the anticipated undiscounted future net cash flows of the related long-lived assets. This analysis is performed at the store unit level. If the carrying value of the related asset exceeds the fair value, the carrying value is reduced to its fair value. Various factors including future sales growth, profit margins and real estate values are included in this analysis. Management believes at this time that the carrying values and useful lives continue to be appropriate. |
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Other Assets | Other Assets—In January 2011, the Company formed a wholly-owned subsidiary intended to operate as a real estate investment trust (“REIT”). The Company made a taxable transfer of certain properties to this subsidiary, thereby increasing the tax basis of the properties to their fair values as of the date of transfer ("REIT Transaction") and recorded a deferred charge to reflect the income tax effects of this intra-entity transfer. At February 2, 2019 and February 3, 2018, other assets included the deferred charge related to the REIT Transaction of $0 and $173.7 million, respectively. See Recently Adopted Accounting Pronouncements, Intra-Entity Transfers of Assets Other Than Inventory, for further discussion below. Other assets also include investments accounted for by the equity and cost methods. |
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Vendor Allowances | Vendor Allowances—The Company receives concessions from its vendors through a variety of programs and arrangements, including cooperative advertising and margin maintenance programs. The Company has agreements in place with each vendor setting forth the specific conditions for each allowance or payment. These agreements range in periods from a few days to up to a year. If the payment is a reimbursement for costs incurred, it is offset against those related costs; otherwise, it is treated as a reduction to the cost of the merchandise. Amounts of vendor concessions are recorded only when an agreement has been reached with the vendor and the collection of the concession is deemed probable. For cooperative advertising programs, the Company generally offsets the allowances against the related advertising expense when incurred. Many of these programs require proof-of-advertising to be provided to the vendor to support the reimbursement of the incurred cost. Programs that do not require proof-of-advertising are monitored to ensure that the allowance provided by each vendor is a reimbursement of costs incurred to advertise for that particular vendor. If the allowance exceeds the advertising costs incurred on a vendor-specific basis, then the excess allowance from the vendor is recorded as a reduction of merchandise cost for that vendor. Margin maintenance allowances are credited directly to cost of purchased merchandise in the period earned according to the agreement with the vendor. Under the retail method of accounting for inventory, a portion of these allowances reduces cost of goods sold and a portion reduces the carrying value of merchandise inventory. |
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Insurance Accruals | Insurance Accruals—The Company's consolidated balance sheets include liabilities with respect to self-insured workers' compensation and general liability claims. The Company's self-insured retention is insured through a wholly-owned captive insurance subsidiary. The Company estimates the required liability of such claims, utilizing an actuarial method, based upon various assumptions, which include, but are not limited to, the Company's historical loss experience, projected loss development factors, actual payroll and other data. The required liability is also subject to adjustment in the future based upon the changes in claims experience, including changes in the number of incidents (frequency) and changes in the ultimate cost per incident (severity). These insurance accruals are recorded in trade accounts payable and accrued expenses and other liabilities on the consolidated balance sheets. |
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Operating Leases | Operating Leases—The Company leases retail stores, office space and equipment under operating leases. Many store leases contain construction allowance reimbursements by landlords, rent holidays, rent escalation clauses and/or contingent rent provisions. The Company recognizes the related rental expense on a straight-line basis over the lease term and records the difference between the amounts charged to expense and the rent paid as a deferred rent liability. To account for construction allowance reimbursements from landlords and rent holidays, the Company records a deferred rent liability in other liabilities on the consolidated balance sheets and amortizes the deferred rent over the lease term, as a reduction to rent expense on the consolidated income statements. For leases containing rent escalation clauses, the Company records minimum rent expense on a straight-line basis over the lease term on the consolidated income statement. The lease term used for lease evaluation includes renewal option periods only in instances in which the exercise of the option period can be reasonably assured and failure to exercise such options would result in an economic penalty. |
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Revenue Recognition | Revenue Recognition—The Company's retail operations segment recognizes merchandise revenue at the "point of sale." Allowance for sales returns and a return asset are recorded as components of net sales in the period in which the related sales are recorded. Sales taxes collected from customers are excluded from revenue and are recorded in trade accounts payable and accrued expenses until remitted to the taxing authorities. Wells Fargo Bank, N.A. ("Wells Fargo") owns and manages Dillard's private label cards under a 10-year agreement ("Wells Fargo Alliance"). The Company's share of income under the Wells Fargo Alliance is included as a component of service charges and other income. The Company received income of approximately $94 million, $101 million and $104 million from the Wells Fargo and former Synchrony alliances in fiscal 2018, 2017 and 2016, respectively. The Company participates in the marketing of the private label credit cards, which includes the cost of customer reward programs. Through the reward programs, customers earn points that are redeemable for discounts on future purchases. The Company defers a portion of its net sales upon the sale of merchandise to its customer reward program members that is recognized in net sales when the reward is redeemed or expired at a future date. Revenue from CDI construction contracts is generally measured based on the ratio of costs incurred to total estimated contract costs (the "cost-to-cost method"). The length of each contract varies but is typically nine to eighteen months. The progress towards completion is determined by relating the actual costs of work performed to date to the current estimated total costs of the respective contracts. |
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Gift card breakage income, recognition period | 60 months | ||||||||
Advertising | Advertising—Advertising and promotional costs, which include newspaper, magazine, Internet, broadcast and other media advertising, are expensed as incurred and were approximately $40.4 million, $42.5 million and $42.8 million, net of cooperative advertising reimbursements of $15.1 million, $19.9 million and $27.5 million for fiscal years 2018, 2017 and 2016, respectively. The Company records net advertising expenses in selling, general and administrative expenses. |
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Income Taxes | Income Taxes—Income taxes are recognized for the amount of taxes payable for the current year and deferred tax assets and liabilities for the future tax consequence of events that have been recognized differently in the financial statements than for tax purposes. Deferred tax assets and liabilities are established using statutory tax rates and are adjusted for tax rate changes. Tax positions are analyzed to determine whether it is "more likely than not" that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. For those tax positions where it is not "more likely than not" that a tax benefit will be sustained, no tax benefit is recognized. The Company classifies accrued interest expense and penalties relating to income tax in the consolidated financial statements as income tax expense. |
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Shipping and Handling | Shipping and Handling—The Company records shipping and handling reimbursements in service charges and other income. The Company records shipping and handling costs in cost of sales. |
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Defined Benefit Retirement Plans | Defined Benefit Retirement Plans—The Company's defined benefit retirement plan costs are accounted for using actuarial valuations. The Company recognizes the funded status of its defined benefit pension plans on the balance sheet and recognizes changes in the funded status that arise during the period but that are not recognized as components of net periodic benefit cost, within other comprehensive income, net of income taxes. |
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Income on and Equity in Losses of Joint Ventures | Income on and Equity in Earnings of Joint Ventures—Income on and equity in earnings of joint ventures includes the Company's portion of the income or loss of the Company's unconsolidated joint ventures as well as distributions (excluding returns of investments) of excess cash from an open air center joint venture. |
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Comprehensive Income | Comprehensive Income—Comprehensive income is defined as the change in equity (net assets) of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. It consists of the net income or loss and other gains and losses affecting stockholders' equity that, under GAAP, are excluded from net income or loss. One such exclusion is the amortization of retirement plan and other retiree benefit adjustments, which is the only item impacting our accumulated other comprehensive loss. |
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Supply Concentration | Supply Concentration—The Company purchases merchandise from many sources and does not believe that the Company was dependent on any one supplier during fiscal 2018. |
Description of Business and Summary of Significant Accounting Policies (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||
Schedule of estimated useful lives |
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Business Segments (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of percentage of net sales by segment and major product line |
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Schedule of segment information |
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Long-Term Debt (Tables) |
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Long-term Debt, Unclassified [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of maturities of long-term debt | Long-term debt maturities over the next five years are (in millions):
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Schedule of net interest and debt expense |
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Trade Accounts Payable and Accrued Expenses (Tables) |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of trade accounts payable and accrued expenses |
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 02, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of provision for federal and state income taxes |
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Schedule of reconciliation between the Company's income tax provision and income taxes using the federal income tax rate |
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Schedule of deferred tax assets and liabilities |
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Schedule of classification of deferred tax assets and liabilities |
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Schedule of reconciliation of beginning and ending amount of unrecognized tax benefits |
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Benefit Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 02, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accumulated benefit obligation, changes in projected benefit obligation, change in Pension Plan assets, funded status and reconciliation to amounts recognized in the consolidated balance sheets |
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Schedule of weighted average assumption |
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Schedule of components of net periodic benefit costs |
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Schedule of estimated future benefits payments for the nonqualified benefit plan |
___________________________________ * The estimated benefit payment for fiscal 2019 also represents the amount the Company expects to contribute to the Pension Plan for fiscal 2019. |
Stockholders' Equity (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 02, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of capital stock |
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Accumulated Other Comprehensive Loss ("AOCL") (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 02, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification Out of Accumulated Other Comprehensive Income |
_____________________________ (1) These items are included in the computation of net periodic benefit costs. See Note 8 for additional information. |
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Change in Accumulated Other Comprehensive Income (Loss) |
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Earnings per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 02, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earnings per common share |
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Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 02, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of rental expense |
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Schedule of future minimum rental commitments |
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Quarterly Results of Operations (unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 02, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of quarterly results of operations |
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Description of Business and Summary of Significant Accounting Policies Description of Business and Summary of Significant Accounting Policies(ASU2016-16) (Details) - USD ($) $ in Thousands |
9 Months Ended | |||
---|---|---|---|---|
Nov. 03, 2018 |
Feb. 02, 2019 |
May 05, 2018 |
Feb. 03, 2018 |
|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||
Deferred charge related to the REIT transaction | $ 0 | $ 173,700 | $ 173,700 | |
Deferred Tax Assets, Net | $ 104,600 | $ 710 | ||
Cumulative Effect on Retained Earnings, Net of Tax | $ 69,100 |
Description of Business and Summary of Significant Accounting Policies Description of Business and Summary of Significant Accounting Policies(ASU2014-09) (Details) - USD ($) $ in Thousands |
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts Receivable, Construction Segment | $ 31,867 | $ 20,136 | $ 30,190 |
Contract with Customer, Liability | $ 72,852 | $ 73,059 | $ 73,639 |
Long-Term Debt (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
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Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
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Maturity of long-term debt | |||
2019 | $ 0 | ||
2020 | 0 | ||
2021 | 0 | ||
2022 | 44,800 | ||
2023 | 0 | ||
Net interest and debt expense | |||
Interest on long-term debt and subordinated debentures | 47,742 | $ 59,579 | $ 59,268 |
Amortization of debt expense | 977 | 1,326 | 1,594 |
Interest on capital lease obligations | 321 | 418 | 507 |
Revolving credit facility expenses | 4,504 | 2,096 | 2,349 |
Investment interest income | (1,030) | (842) | (663) |
Interest Expense, Other | 4 | 3 | 4 |
Interest and debt expense, net | 52,518 | 62,580 | 63,059 |
Interest paid | 52,900 | 71,600 | $ 62,400 |
Unsecured notes, at rates ranging from 7.000% to 7.88%, due 2018 through 2028 | |||
Long-term debt | |||
Long-term debt, including current portion | $ 365,600 | $ 526,400 | |
Interest rate on notes (as a percent) | 7.00% | ||
Interest Rate on Notes, Maximum | 7.875% |
Trade Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands |
Feb. 02, 2019 |
Feb. 03, 2018 |
---|---|---|
Trade accounts payable and accrued expenses | ||
Trade accounts payable | $ 743,330 | $ 657,586 |
Accrued expenses: | ||
Taxes, other than income | 47,646 | 59,977 |
Salaries, wages and employee benefits | 64,370 | 62,351 |
Liability to customers | 52,677 | 52,215 |
Interest | 3,961 | 4,174 |
Rent | 2,419 | 2,516 |
Other | 6,802 | 6,462 |
Trade accounts payable and accrued expenses | $ 921,205 | $ 845,281 |
Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
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Current: | |||
Federal | $ 34,960 | $ 91,799 | $ 120,872 |
State | 2,436 | 2,466 | 3,331 |
Total current provision for income taxes | 37,396 | 94,265 | 124,203 |
Deferred: | |||
Federal | 2,353 | (100,954) | (34,797) |
State | (2,019) | (1,111) | (906) |
Total deferred provision for income taxes | 334 | (102,065) | (35,703) |
Income taxes (benefit) | $ 37,730 | $ (7,800) | $ 88,500 |
Income Taxes (Details 2) - USD ($) $ in Thousands |
12 Months Ended | ||
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Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
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Reconciliation between the entity's income tax provision and income taxes using federal statutory income tax rate | |||
Income tax at the statutory federal rate (inclusive of income on and equity in earnings of joint ventures) | $ 43,679 | $ 72,000 | $ 90,202 |
State income taxes, net of federal benefit (inclusive of income on and equity in earnings of joint ventures) | 2,538 | (22) | 954 |
Net changes in unrecognized tax benefits, interest and penalties /reserves | (421) | (448) | (323) |
Tax benefit of federal credits | (4,563) | (4,440) | (2,434) |
Changes in cash surrender value of life insurance policies | (410) | (441) | (914) |
Changes in valuation allowance | (2,039) | 222 | 1,857 |
Tax benefit of dividends paid to ESOP | (621) | (810) | (785) |
Other | 1,088 | 355 | (57) |
Income taxes (benefit) | 37,730 | (7,800) | 88,500 |
Estimated Adjustments to net deferred tax liabilities for enacted changes in tax laws and rates | $ (1,521) | $ 74,216 | $ 0 |
Income Taxes (Details 3) - USD ($) $ in Thousands |
Feb. 02, 2019 |
Feb. 03, 2018 |
---|---|---|
Components of deferred tax assets and liabilities | ||
Property and equipment bases and depreciation differences | $ 22,942 | $ 126,401 |
Prepaid expenses | 45,101 | 41,124 |
Joint venture bases differences | 6,889 | 7,889 |
Differences between book and tax bases of inventory | 18,770 | 22,436 |
Other | 2,953 | 3,436 |
Total deferred tax liabilities | 96,655 | 201,286 |
Accruals not currently deductible | (66,325) | (66,941) |
Net operating loss carryforwards | (67,512) | (72,452) |
State income taxes | (236) | (419) |
Other | (2,267) | (1,525) |
Total deferred tax assets | (136,340) | (141,337) |
Net operating loss valuation allowance | 53,172 | 56,172 |
Net deferred tax assets | (83,168) | (85,165) |
Net deferred income taxes | $ 13,487 | $ 116,121 |
Income Taxes (Details 4) - USD ($) $ in Thousands |
Feb. 02, 2019 |
May 05, 2018 |
Feb. 03, 2018 |
---|---|---|---|
Income Tax Disclosure [Abstract] | |||
Deferred Tax Assets, Net | $ (104,600) | $ (710) | |
Portion of unrecognized tax benefits that, if recognized, would affect the effective tax rate | $ 1,600 | 2,300 | |
Net deferred tax liabilities—deferred income taxes | 13,487 | 116,831 | |
Net deferred income taxes | $ 13,487 | $ 116,121 |
Income Taxes (Details 5) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
|
Reconciliation of beginning and ending amount of unrecognized tax benefits | |||
Unrecognized tax benefits at beginning of period | $ 3,189 | $ 4,013 | $ 4,265 |
Gross increases—tax positions in prior period | 37 | 2 | 43 |
Gross decreases—tax positions in prior period | (606) | (710) | (538) |
Gross increases—current period tax positions | 483 | 417 | 386 |
Settlements | 0 | (81) | 0 |
Lapse of statutes of limitation | (415) | (452) | (143) |
Unrecognized tax benefits at end of period | 2,688 | 3,189 | 4,013 |
Income taxes paid, net of income tax refunds received | $ 68,400 | $ 93,900 | $ 129,400 |
Income Taxes Income Taxes (Details 6) (Details) - USD ($) $ / shares in Units, $ in Millions |
1 Months Ended | 3 Months Ended | 11 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|---|
Feb. 03, 2018 |
Nov. 03, 2018 |
Feb. 03, 2018 |
Dec. 31, 2017 |
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
|
Income Tax Disclosure [Abstract] | |||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% | 21.00% | 33.72% | 35.00% | ||
Estimated Tax Benefits Related to the Tax Act | $ 2.9 | $ 77.4 | |||||
Estimated Tax Benefits of Tax Cuts and Jobs Act, per share amount | $ 0.11 | $ 2.73 |
Subordinated Debentures (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | |
---|---|---|
Feb. 02, 2019 |
Feb. 03, 2018 |
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Note repurchase | ||
Outstanding amount | $ 200,000 | $ 200,000 |
Dillard's Capital Trust I | ||
Note repurchase | ||
Ownership interest percentage held in trust | 100.00% | |
Dillard's Capital Trust I | 7.5% capital securities due on August 1, 2038, subject to mandatory redemption | ||
Note repurchase | ||
Liquidation amount | $ 200,000 | |
Dividend rate (as a percent) | 7.50% | |
Liquidation amount per security (in dollars per share) | $ 25 | |
Dillard's Capital Trust I | 7.5% subordinated debentures due on August 1, 2038 | ||
Note repurchase | ||
Outstanding amount | $ 200,000 | |
Interest rate (as a percent) | 7.50% | |
Maximum number of consecutive quarters available for deferral of interest payment | 5 years |
Benefit Plans (Details 3) $ in Thousands |
Feb. 02, 2019
USD ($)
|
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---|---|---|---|---|
Estimated future benefits payments for the nonqualified benefit plan | ||||
2019 | $ 5,391 | [1] | ||
2020 | 9,363 | |||
2021 | 9,601 | |||
2022 | 10,980 | |||
2023 | 11,409 | |||
2024 - 2028 | 70,409 | |||
Total payments for next ten fiscal years | $ 117,153 | |||
|
Stockholders' Equity (Details 2) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
Mar. 01, 2018 |
|
Amount of shares repurchased | $ 127,884 | $ 219,011 | $ 246,173 | |
Number of shares repurchased | 1,796,908 | 4,096,972 | 3,810,385 | |
Treasury Stock Acquired, Average Cost Per Share | $ 71.17 | $ 53.46 | $ 64.61 | |
2018 March Stock Repurchase Plan [Domain] | ||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 406,900 | |||
Stock Repurchase Program, Authorized Amount | $ 500,000 |
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
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Feb. 02, 2019 |
Nov. 03, 2018 |
Aug. 04, 2018 |
May 05, 2018 |
Feb. 03, 2018 |
Oct. 28, 2017 |
Jul. 29, 2017 |
Apr. 29, 2017 |
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
|
Basic: | |||||||||||
Net earnings available for per-share calculation | $ 85,158 | $ 7,425 | $ (2,868) | $ 80,548 | $ 157,563 | $ 14,539 | $ (17,080) | $ 66,302 | $ 170,263 | $ 221,324 | $ 169,220 |
Average shares of common stock outstanding | 27,312,000 | 29,487,000 | 34,308,000 | ||||||||
Net income per share of common stock (in dollars per share) | $ 6.23 | $ 7.51 | $ 4.93 | ||||||||
Diluted: | |||||||||||
Net earnings available for per-share calculation | $ 85,158 | $ 7,425 | $ (2,868) | $ 80,548 | $ 157,563 | $ 14,539 | $ (17,080) | $ 66,302 | $ 170,263 | $ 221,324 | $ 169,220 |
Average shares of common stock outstanding | 27,312,000 | 29,487,000 | 34,308,000 | ||||||||
Dilutive effect of stock-based compensation (in shares) | 0 | 0 | 0 | ||||||||
Total weighted average equivalent shares | 27,312,000 | 29,487,000 | 34,308,000 | ||||||||
Net income per share of common stock (in dollars per share) | $ 3.22 | $ 0.27 | $ (0.10) | $ 2.89 | $ 5.55 | $ 0.50 | $ (0.58) | $ 2.12 | $ 6.23 | $ 7.51 | $ 4.93 |
Total stock options outstanding (in shares) | 0 | 0 | 0 | 0 |
Asset Impairment and Store Closing Charges (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
|
Asset Impairment and Store Closing Charges | |||
Pretax charges for asset impairment and store closing costs | $ 0 | $ 0 | $ 6,500 |
Fair Value Disclosures (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Feb. 02, 2019 |
Feb. 03, 2018 |
|
Fair value disclosures | |||
Subordinated debentures | $ 200,000 | $ 200,000 | |
Cost-method investments, other than temporary impairment | $ 6,500 | ||
Fair Value of Assets | |||
Fair value disclosures | |||
Long-term debt, including current portion, fair value | 384,000 | 571,000 | |
Subordinated debentures | 215,000 | 203,000 | |
Carrying value | |||
Fair value disclosures | |||
Long-term debt, including current portion | 366,000 | $ 526,000 | |
Subordinated debentures | $ 200,000 |
Quarterly Results of Operations (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 02, 2019 |
Nov. 03, 2018 |
Aug. 04, 2018 |
May 05, 2018 |
Feb. 03, 2018 |
Oct. 28, 2017 |
Jul. 29, 2017 |
Apr. 29, 2017 |
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 2,010,611 | $ 1,419,213 | $ 1,468,023 | $ 1,458,262 | $ 2,060,773 | $ 1,354,964 | $ 1,427,280 | $ 1,418,460 | $ 6,356,109 | $ 6,261,477 | $ 6,257,137 |
Gross profit | 594,946 | 464,276 | 450,846 | 554,521 | 628,270 | 464,888 | 420,226 | 548,375 | 2,064,589 | 2,061,759 | 2,090,726 |
Net income | $ 85,158 | $ 7,425 | $ (2,868) | $ 80,548 | $ 157,563 | $ 14,539 | $ (17,080) | $ 66,302 | $ 170,263 | $ 221,324 | $ 169,220 |
Diluted earnings per share: | |||||||||||
Net income (in dollars per share) | $ 3.22 | $ 0.27 | $ (0.10) | $ 2.89 | $ 5.55 | $ 0.50 | $ (0.58) | $ 2.12 | $ 6.23 | $ 7.51 | $ 4.93 |
Quarterly Results of Operations (unaudited) (Details 2) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Oct. 28, 2017 |
Feb. 02, 2019 |
Feb. 03, 2018 |
Jan. 28, 2017 |
|
(Gain) loss on disposal of assets | ||||
Pretax charges for asset impairment and store closing costs | $ 0 | $ 0 | $ 6,500 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Curtailment | 0 | 0 | 0 | |
Gain on disposal of assets | $ (48) | $ 4,860 | $ 905 | |
Sale of former retail store location | ||||
(Gain) loss on disposal of assets | ||||
Gain (loss) on disposal of assets, net of tax | $ 3,100 | |||
Gain (loss) on disposal of assets, per share, net of tax (in dollars per share) | $ 0.11 | |||
Gain on disposal of assets | $ 4,800 |
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