Dillard's (DDS) risk factors, FY2026 10-K

Other

1. 01The risks described in this Item 1A, Risk Factors, of this Annual Report could materially and adversely affect our business, financial condition and results of operations

Risks Related to Retail Operations

1. 02The retail merchandise business is highly competitive, and that competition could lower our revenues, margins and market share
2. 03Our business is seasonal, and fluctuations in our revenues during the last quarter of our fiscal year can have a disproportionate effect on our results of operations
3. 04A shutdown of, or disruption in, any of the Company’s distribution or fulfillment centers would have an adverse effect on the Company’s business and operations
4. 05Current store locations may become less desirable, and desirable new locations may not be available for a reasonable price, if at all, either of which could adversely affect our results of operations
5. 06Ownership and leasing of significant amounts of real estate exposes us to possible liabilities and losses
6. 07Variations in the amount of vendor allowances received could adversely impact our operating results
7. 08A decrease in cash flows from our operations and constraints to accessing other financing sources could limit our ability to fund our operations, capital projects, interest and debt repayments, stock repurchases and dividends
8. 09Our profitability may be adversely impacted by weather conditions
9. 10Natural disasters, climate change, war, acts of violence, acts of terrorism, other armed conflicts, and public health issues may adversely impact our business

Risks Related to Consumer Demand

1. 11Changes in economic, financial and political conditions, and the resulting impact on consumer confidence and consumer spending, could have an adverse effect on our business and results of operations
2. 12Our business is dependent upon our ability to accurately predict rapidly changing fashion trends, customer preferences and other fashion-related factors

Risks Related to our Brand and Product Offerings

1. 13Our failure to protect our reputation could have an adverse effect on our business
2. 14Risks associated with our private label merchandise program could adversely affect our business

Risks Related to Material Sourcing and Supply

1. 15Fluctuations in the price of merchandise, raw materials, fuel and labor or their reduced availability could increase our cost of goods and negatively impact our financial results
2. 16The Company and third-party suppliers on whom we rely source a significant portion of the merchandise we sell from foreign countries, which exposes us to certain risks that include political and economic conditions and supply chain disruptions34% rewritten
3. 17Failure by third party suppliers to comply with our supplier compliance programs or applicable laws could have a material adverse effect on our business

Risks Related to our Long-Term Marketing and Servicing Alliance

1. 18Reductions in the income and cash flow from our long-term marketing and servicing alliance related to the private label credit cards could impact operating results and cash flows27% rewritten
2. 19We are subject to customer payment-related risks that could increase our operating costs, expose us to fraud or theft, subject us to potential liability and potentially disrupt our business operations

Risks Related to Information Technology and Information Security Risks

1. 20A significant disruption in our information technology systems and network and our inability to adequately maintain and update those systems could materially adversely affect our operations and financial condition

Legal and Compliance Risks

1. 21Litigation with customers, employees and others could harm our reputation and impact operating results

Risks Related to Construction Operations

1. 22The cost-to-cost method of accounting that we use to recognize contract revenues for our construction segment may result in material adjustments, which could result in a credit or a charge against our earnings

Risks Related to Employees

1. 23The Company depends on its ability to attract and retain quality employees, and failure to do so could adversely affect our ability to execute our business strategy and our operating results
2. 24Increases in employee wages and the cost of employee benefits could impact the Company’s financial results and cash flows