DILLARD'S, INC. Leases Disclosure
13. Leases
The Company leases retail stores, office space and equipment under operating leases. As of January 31, 2026, right-of-use operating lease assets, which are recorded in operating lease assets in the consolidated balance sheets, totaled $36.2 million, and operating lease liabilities, which are recorded in current portion of operating lease liabilities and operating lease liabilities, totaled $35.9 million.
In determining our operating lease assets and operating lease liabilities, we apply an incremental borrowing rate to the minimum lease payments within each lease agreement. GAAP requires the use of the rate implicit in the lease whenever that rate is readily determinable; furthermore, if the implicit rate is not readily determinable, a lessee may use its incremental borrowing rate. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. To estimate our specific incremental borrowing rates that align with applicable lease terms, we utilized a model consistent with the credit quality of our outstanding debt instruments.
Renewal options of to 10 years exist on the majority of leased properties. The Company has sole discretion in exercising the lease renewal options. We do not recognize operating lease assets or operating lease liabilities at lease inception for renewal periods unless it has been determined that we are reasonably certain of exercising the renewal options. The depreciable life of operating lease assets and related leasehold improvements is limited by the expected lease term.
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 Company’s operating lease agreements do not contain any material residual value guarantees or material restrictive covenants.
There were no finance lease obligations outstanding during fiscal 2025, 2024 and 2023. The following table summarizes the Company’s operating leases:
Operating Leases | ||||||||
(in thousands of dollars) | | Classification - Consolidated Balance Sheets | | January 31, 2026 | | February 1, 2025 | ||
Assets |
| |
| |
| | ||
Total lease assets |
| Operating lease assets | $ | 36,177 | $ | 33,562 | ||
Liabilities | |
| |
| | |||
Current lease liabilities | Current portion of operating lease liabilities | $ | 9,547 | $ | 11,411 | |||
Noncurrent lease liabilities | Operating lease liabilities |
| 26,341 |
| 22,345 | |||
Total lease liabilities | $ | 35,888 | $ | 33,756 | ||||
Lease Cost
Operating Lease Cost (a) | |||||||||||
(in thousands of dollars) | | Classification - Consolidated Statements of Operations | | Fiscal 2025 | | Fiscal 2024 | | Fiscal 2023 | |||
Net lease cost |
| Rentals | $ | 19,223 | $ | 21,419 | $ | 21,569 | |||
| (a) | Includes short term lease costs of $2.8 million and $3.9 million and variable lease costs, including contingent rent, of $3.0 million and $3.3 million for fiscal 2025 and 2024, respectively. |
Maturities of Lease Liabilities
Total | |||
(in thousands of dollars) | | Operating | |
Fiscal Year | Leases | ||
2026 | $ | 11,362 | |
2027 |
| 10,198 | |
2028 |
| 9,020 | |
2029 |
| 5,622 | |
2030 |
| 925 | |
After 2030 |
| 4,175 | |
Total minimum lease payments |
| 41,302 | |
Less amount representing interest |
| (5,414) | |
Present value of lease liabilities | $ | 35,888 | |
Lease Term and Discount Rate
| | January 31, 2026 |
| February 1, 2025 |
| February 3, 2024 |
|
Weighted-average remaining lease term |
| | | | |||
Operating leases |
| 4.6 | 4.6 | 4.6 | |||
Weighted-average discount rate |
| | | | |||
Operating leases |
| 6.1 | % | 6.6 | % | 6.1 | % |
Other Information
(in thousands of dollars) | | Fiscal 2025 |
| Fiscal 2024 |
| Fiscal 2023 | |||
Cash paid for amounts included in the measurement of lease liabilities |
| | | | |||||
Operating cash flows from operating leases | $ | 13,948 | $ | 14,598 | $ | 13,475 | |||
Lease assets obtained in exchange for new operating lease liabilities | $ | 14,592 | $ | 2,852 | $ | 20,477 | |||
| 12. |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Mar 27, 2026 | Showing above |
| 2025 | Mar 28, 2025 | |
| 2024 | Mar 29, 2024 | |
| 2023 | Mar 27, 2023 | |
| 2022 | Mar 29, 2022 | |
| 2021 | Mar 29, 2021 | |
| 2020 | Mar 31, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.