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Dillard's (DDS): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q2 FY27, to Aug 1, 2026, filed Sep 4, 2026; rules v1.1
Dillard's (DDS): 1 rule of 10 triggered on the filings to Aug 1, 2026: FCF growth = the business improved; 4 with insufficient data; 2 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
FCF growth = the business improved Triggered · severity high · confidence high
Free cash flow rose $14M (+2%), from $610M to $624M, but working capital released $41M more cash than the year before and capital expenditure fell by $11M: more than the whole increase came from sources that need not repeat. Operating cash flow before working capital fell by $38M.
Innocent reading: An expansion programme finished, so capex fell back to maintenance levels for good.
Every rule
A01 FCF growth = the business improved Triggered severity high · confidence high
Free cash flow rose $14M (+2%), from $610M to $624M, but working capital released $41M more cash than the year before and capital expenditure fell by $11M: more than the whole increase came from sources that need not repeat. Operating cash flow before working capital fell by $38M.
The figures and how they are read
| Fiscal year before | FY25 |
| Fiscal year | FY26 |
| Operating cash flow, year before | $714M |
| Operating cash flow | $717M |
| Capex, year before | $105M |
| Capex | $93M |
| Free cash flow, year before | $610M |
| Free cash flow | $624M |
| Change in FCF | $14M |
| Change in capex | −$11M |
| Working capital: change in its cash contribution | $41M |
| Of which: capex cut | $11M |
| Of which: working capital released | $41M |
| Share of the increase that need not repeat | +369.9% |
| Operating cash flow before working capital: change | -37928000.00 |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY26 (cash flow statement, fiscal year) · FY25 (cash flow statement, fiscal year before)
What would explain it innocently
- An expansion programme finished, so capex fell back to maintenance levels for good
- Suppliers agreed longer payment terms in a contract
- Inventory was brought down after a glut and will stay down
What to look for in the filing
- Maintenance capex (what it costs to keep the assets working)
- Supplier payment terms and any supply-chain financing
- Management's capex guidance for next year
What would show the trap does not apply
- Next year's FCF holds or rises with capex back at its earlier level and working capital no longer releasing cash
- The 10-K's capex guidance and the segment capex show the cut is a completed programme, not deferral
- The working-capital release matches a disclosed change in terms or a divestiture, not stretched payables or a collection push
Look again: next filing.
A07 Stock compensation added back = no economic cost Insufficient data
fewer than two fiscal years of stock compensation and share counts on file
B02 Receivables growing = future cash is certain Not triggered confidence medium
Receivables grew -13% against revenue 0% in Q2 FY27; DSO 3 against a median of 3: collections are keeping pace with sales.
The figures and how they are read
| Quarter | Q2 FY27 |
| Revenue, year over year | -0.4% |
| Receivables, year over year | -13.0% |
| Quarter before | Q1 FY27 |
| Revenue y/y, quarter before | +2.7% |
| Receivables y/y, quarter before | -17.4% |
| Days sales outstanding | 2.7 |
| DSO, median of eight quarters | 3.0 |
| Receivables | $45M |
| Revenue | $1.5B |
receivables and revenue against the same quarter a year earlier; DSO = receivables / quarterly revenue × days, against the median of the eight quarters before
Source: Q2 FY27 (receivables and revenue) · Q2 FY26 (the same quarter a year earlier)
B08 Adjusted profit = economic profit Not triggered confidence low
Adjusted and GAAP EPS were within 10% of each other in the last 3 quarters.
The figures and how they are read
| Quarter / adjusted EPS / GAAP EPS / gap | 2025-10-31 / 8.2909 / 8.31 / -0.002; 2026-04-30 / 10.95173 / 16.04 / -0.465; 2026-07-31 / 6.25791 / 6.25 / 0.001 |
| Quarters with adjusted ≥ 10% above GAAP | 0 |
| Quarters compared | 3 |
| Latest gap | +0.1% |
the analysts' 'actual' (usually the company's adjusted EPS) against GAAP net income ÷ diluted shares for the matching quarter; a gap of 10% or more counts (the stand-in until three releases' reconciliation tables are on file)
Source: 2025-10-31 (adjusted 8.29 vs GAAP 8.31) · 2026-04-30 (adjusted 10.95 vs GAAP 16.04) · 2026-07-31 (adjusted 6.26 vs GAAP 6.25)
C02 Low net debt = no refinancing risk Insufficient data
no debt figure could be read from the balance sheet (the filing may tag it in other lines)
D03 EPS growth = profit growth Insufficient data
no quarter with EPS, net income and diluted shares for both this year and last
E02 Low P/E at a cyclical peak = undervalued Not triggered confidence medium
Net income of $682M is not at a cyclical high against the last eight years (median $593M, best $892M): the P/E of 14.0× is on a normal year.
The figures and how they are read
| market value | $9.6B |
| net income ttm | $682M |
| pe ttm | 14.00 |
| net income median fy | $593M |
| pe mid cycle | 16.10 |
| net income peak fy | $892M |
| years | FY19 / 170.0; FY20 / 111.0; FY21 / -72.0; FY22 / 862.0; FY23 / 892.0; FY24 / 739.0; FY25 / 593.0; FY26 / 570.0 |
| down years in window | 5 |
P/E on the trailing twelve months' net income against the P/E on the median net income of the last eight fiscal years (a mid-cycle stand-in); 'at a peak' = this year's profit at or above 90% of the best year and at least 1.3× the median
Source: Q2 FY27 (net income, trailing twelve months)
E07 A precise DCF value = the true value Insufficient data
no DCF in the valuation research for this company
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → Dillard's: cash flow →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.