Dillard's, Inc.

Dillard's reported second-quarter fiscal 2026 earnings of $6.25 per share, up 34.1% from $4.66 a year earlier and 54.7% above the Zacks Consensus Estimate of $4.04. Net sales slipped to $1.508 billion from $1.514 billion, missing estimates by about 0.7%, but total retail sales excluding the CDI Contractors construction business rose 1% to $1.455 billion with comparable-store sales also up 1%. Retail gross margin expanded to 40.9% from 38.1%, helped by a $37.2 million tariff refund that added 260 basis points and $1.82 per share, though management does not expect additional significant IEEPA refunds. The company ended the quarter with $763.1 million in cash and cash equivalents plus $497.7 million in short-term investments, totaling roughly $1.26 billion, while SG&A expenses rose 2.2% and merchandise inventories increased about 5%. Zacks Investment Research rates Dillard's a Zacks Rank #2 Buy, citing a healthy balance sheet, resilient demand, and a strong earnings-surprise history.

Dillard's and Lenovo both crushed earnings expectations in their latest quarterly reports. Dillard's posted fiscal second-quarter earnings of $6.25 per share, beating consensus estimates of $4.04 by nearly 55% and rising 34% year over year, while Lenovo reported fiscal first-quarter earnings of $1.78 per share, crushing the 65-cent consensus by nearly 174%. Dillard's net income climbed to $97.7 million from $72.8 million, and Lenovo's revenue surged 43% year over year to a record $26.94 billion. Lenovo's AI-related revenue jumped 60% to $9.3 billion, representing 35% of total sales, and its AI-server pipeline reached $54 billion, up 157% sequentially. Dillard's ended the quarter with roughly $1.26 billion in cash and short-term investments, while Lenovo now expects to reach $100 billion in annual revenue during its current fiscal year, pulling that milestone forward from its prior two-year timetable.

John Dorfman of Dorfman Value Investments recommends a quintet of mid-cap stocks, arguing they can help portfolios perform differently from large-cap-dominated indices. The five picks are Dillard's, Matson, Cullen/Frost Bankers, National Fuel Gas, and Oshkosh. Dillard's trades at 13 times earnings and has appreciated 833% over the past decade. Matson, a Hawaii-based ocean shipper, sells for 14 times earnings and has returned 478% over ten years. Cullen/Frost Bankers has been profitable every year since 1868. National Fuel Gas, active across natural-gas production, pipelines, and utilities, trades at about 10 times earnings. Oshkosh, a maker of fire engines and military trucks, sells at 13 times forward earnings estimates. Mid-caps are up 15.4% this year through June 19, outpacing the 10.2% gain for large-caps.

Casey's General Stores, Ross Stores, and Dillard's each hold a Zacks Rank #1 (Strong Buy), reflecting growing analyst optimism and positive earnings estimate revisions. Casey's operates nearly 3,000 convenience stores across the Midwest and has consistently delivered better-than-expected quarterly results, driven by robust inside sales, expanding margins, and acquisition-driven growth. Ross Stores continues to attract bargain-hunting shoppers with its off-price treasure-hunt experience, maintaining healthy profitability through strong traffic and disciplined inventory management, with Wall Street raising earnings estimates and a significant runway for store expansion. Dillard's has distinguished itself among department stores with disciplined inventory and expense controls, consistently delivering strong margins and impressive free cash flow, while rewarding shareholders through dividends and share repurchases. With earnings expectations moving higher, these three retailers could offer intriguing upside for growth-oriented investors.