Business Segments

12 Months Ended

Feb. 03, 2024

Segment Reporting [Abstract]

Business Segments

2. 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:

	Fiscal 2023		Fiscal 2022		Fiscal 2021
Retail operations segment:
Cosmetics	16	%	15	%	14	%
Ladies’ apparel	20		21		21
Ladies’ accessories and lingerie	14		14		15
Juniors’ and children’s apparel	9		9		10
Men’s apparel and accessories	19		20		19
Shoes	14		15		15
Home and furniture	4		4		4
	96		98		98
Construction segment	4		2		2
Total	100	%	100	%	100	%

The following tables summarize certain segment information, including the reconciliation of those items to the Company’s consolidated operations.

	Fiscal 2023
(in thousands of dollars)	Retail Operations		Construction		Consolidated
Net sales from external customers	$	6,479,580	$	272,473	$	6,752,053
Gross margin		2,709,071		11,874		2,720,945
Depreciation and amortization		179,315		258		179,573
Interest and debt expense (income), net		(3,927)		(673)		(4,600)
Income before income taxes		913,856		2,761		916,617
Total assets		3,377,632		71,274		3,448,906

	Fiscal 2022
(in thousands of dollars)	Retail Operations		Construction		Consolidated
Net sales from external customers	$	6,701,972	$	169,109	$	6,871,081
Gross margin		2,878,910		8,573		2,887,483
Depreciation and amortization		188,227		213		188,440
Interest and debt expense (income), net		30,614		(87)		30,527
Income before income taxes		1,108,675		792		1,109,467
Total assets		3,274,072		55,078		3,329,150

	Fiscal 2021
(in thousands of dollars)	Retail Operations		Construction		Consolidated
Net sales from external customers	$	6,374,753	$	118,240	$	6,492,993
Gross margin		2,736,762		8,566		2,745,328
Depreciation and amortization		199,061		260		199,321
Interest and debt expense (income), net		43,131		(39)		43,092
Income before income taxes		1,086,122		2,241		1,088,363
Total assets		3,199,847		45,710		3,245,557

Intersegment construction revenues of $48.3 million, $44.9 million and $38.2 million were eliminated during consolidation and have been excluded from net sales for fiscal 2023, 2022 and 2021, respectively.

The retail operations segment gives rise to contract liabilities through the customer loyalty program associated with Dillard’s private label cards and through the issuances of gift cards. The customer loyalty program liability and a portion of the gift card liability are 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. Our retail operations segment contract liabilities are as follows:

Retail
	February 3,		January 28,		January 29,
(in thousands of dollars)	2024		2023		2022
Contract liabilities	$	85,227	$	83,909	$	80,421

During fiscal 2023 and 2022, the Company recorded $55.0 million and $53.2 million, respectively, in revenue that was previously included in the retail operations contract liability balances of $83.9 million and $80.4 million, at January 28, 2023 and January 29, 2022, respectively.

Construction contracts give rise to accounts receivable, contract assets and contract liabilities. We record accounts receivable based on amounts expected to be collected from customers. We also record costs and estimated earnings in excess of billings on uncompleted contracts (contract assets) and billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities) in other current assets and trade accounts payable and accrued expenses in the consolidated balance sheets, respectively. The amounts included in the consolidated balance sheets are as follows:

Construction
	February 3,		January 28,		January 29,
(in thousands of dollars)	2024		2023		2022
Accounts receivable	$	47,240	$	44,286	$	25,912
Costs and estimated earnings in excess of billings on uncompleted contracts		1,695		798		2,847
Billings in excess of costs and estimated earnings on uncompleted contracts		6,307		10,909		6,298

During fiscal 2023 and 2022, the Company recorded $10.3 million and $5.8 million, respectively, in revenue that was previously included in billings in excess of costs and estimated earnings on uncompleted contracts of $10.9 million and $6.3 million at January 28, 2023 and January 29, 2022, respectively.

The remaining performance obligations related to executed construction contracts totaled $163.7 million and $189.1 million at February 3, 2024 and January 28, 2023, respectively.