DILLARDS INC (Form: 10-Q, Received: 06/09/2005 16:42:58)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2005

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITES EXCHANGE ACT OF 1934

For the transition period from __________ to __________.

Commission file number 1-6140

DILLARD'S, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	71-0388071
( State or other jurisdiction	(IRS Employer
of incorporation or organization)	Identification Number)

1600 CANTRELL ROAD, LITTLE ROCK, ARKANSAS 72201

(Address of principal executive office)

(Zip Code)

(501) 376-5200

(Registrant's telephone number, including area code)

Indicate by checkmark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter time that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No_

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12-b-2). Yes x No _

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

CLASS A COMMON STOCK as of April 30, 2005 79,249,075

CLASS B COMMON STOCK as of April 30, 2005 4,010,929

Index

DILLARD'S, INC.

		Page
PART I. FINANCIAL INFORMATION		Number

Item 1.	Financial Statements (Unaudited):

	Consolidated Balance Sheets as of April 30, 2005, January 29, 2005 and May 1, 2004	3

	Consolidated Statements of Income and Retained Earnings for the Three and Twelve
	Months Ended April 30, 2005 and May 1, 2004	4

	Consolidated Statements of Cash Flows for the Three Months Ended April 30, 2005
	and May 1, 2004	5

	Notes to Consolidated Financial Statements	6

Item 2.	Management's Discussion and Analysis of Financial Condition
	and Results of Operations	11

Item 3.	Quantitative and Qualitative Disclosure About Market Risk	19

Item 4.	Controls and Procedures	19

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	21

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21

Item 3.	Defaults Upon Senior Securities	21

Item 4.	Submission of Matters to a Vote of Security Holders	21

Item 5.	Other Information	21

Item 6.	Exhibits	22

SIGNATURES		22

PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements
DILLARD'S, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(I n Thousands)

	April 30,	January 29,	May 1,
	2005	2005	2004
Assets
Current Assets:
Cash and cash equivalents	$ 455,548	$ 498,248	$ 67,063
Accounts receivable, net	9,016	9,651	1,092,699
Merchandise inventories	2,073,754	1,733,033	1,969,475
Other current assets	40,631	52,559	26,289

Total current assets	2,578,949	2,293,491	3,155,526

Property and Equipment, net	3,202,663	3,180,756	3,161,812
Goodwill	35,495	35,495	36,731
Other Assets	184,600	181,839	156,108

Total Assets	$ 6,001,707	$ 5,691,581	$ 6,510,177

Liabilities and Stockholders' Equity
Current Liabilities:
Trade accounts payable and accrued expenses	$ 1,156,599	$ 820,242	$ 1,083,971
Current portion of long-term debt	91,359	91,629	165,692
Current portion of capital lease obligations	4,977	4,926	2,240
Federal and state income taxes	93,873	128,436	141,893

Total current liabilities	1,346,808	1,045,233	1,393,796

Long-term Debt	1,307,285	1,322,824	1,852,105
Capital Lease Obligations	18,978	20,182	17,060
Other Liabilities	270,370	269,056	147,497
Deferred Income Taxes	497,980	509,589	611,923
Guaranteed Preferred Beneficial Interests in the
Company’s Subordinated Debentures	200,000	200,000	200,000

Stockholders’ Equity:
Common stock	1,187	1,186	1,169
Additional paid-in capital	740,497	739,620	714,251
Accumulated other comprehensive loss	(13,333)	(13,333)	(11,281)
Retained earnings	2,340,704	2,305,993	2,252,045
Less treasury stock, at cost	(708,769)	(708,769)	(668,388)

Total stockholders' equity	2,360,286	2,324,697	2,287,796

Total Liabilities and Stockholders' Equity	$ 6,001,707	$ 5,691,581	$ 6,510,177

See notes to consolidated financial statements.

DILLARD'S, INC.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Unaudited)
(In Thousands, Except Per Share Data)


	Three Months Ended		Twelve Months Ended
	April 30,	May 1,	April 30,	May 1,
	2005	2004	2005	2004

Net Sales	$1,802,999	$1,854,395	$7,477,176	$7,639,418
Service Charges, Interest and Other Income	35,734	57,484	265,949	244,803

	1,838,733	1,911,879	7,743,125	7,884,221
Costs and Expenses:
Cost of sales	1,170,272	1,187,500	5,000,537	5,145,701
Advertising, selling, administrative
and general expenses	497,299	509,784	2,086,306	2,098,048
Depreciation and amortization	74,567	74,238	302,246	290,872
Rentals	10,536	13,718	51,592	63,649
Interest and debt expense	26,200	37,952	127,304	175,592
Asset impairment and store closing charges	419	4,680	15,156	48,407

Total Costs and Expenses	1,779,293	1,827,872	7,583,141	7,822,269

Income Before Income Taxes	59,440	84,007	159,984	61,952
Income Taxes	21,400	30,245	58,040	23,195
Net Income	38,040	53,762	101,944	38,757
Retained Earnings at Beginning
of Period	2,305,993	2,201,623	2,252,045	2,226,633

Cash Dividends Declared	(3,329)	(3,340)	(13,285)	(13,345)

Retained Earnings at End of Period	$2,340,704	$2,252,045	$2,340,704	$2,252,045

Earnings Per Share:
Basic	$0.46	$0.64	$1.23	$0.46

Diluted	$0.46	$0.64	$1.22	$0.46


Cash Dividends Declared Per Common Share	$0.04	$0.04	$0.16	$0.16

See notes to consolidated financial statements.

DILLARD'S, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)




	Three Months Ended
	April 30,	May 1,
	2005	2004

Operating Activities:
Net income	$ 38,040	$ 53,762
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization of property and deferred financing	75,346	75,532
Gain on the sale of property and equipment	(295)	-
Provision for loan losses	-	8,900
Asset impairment and store closing charges	419	4,680
Changes in operating assets and liabilities:
Decrease in accounts receivable	635	89,890
Increase in merchandise inventories and other current assets	(328,793)	(324,435)
Increase in other assets	(3,540)	(4,196)
Increase in trade accounts payable and accrued expenses,
other liabilities and income taxes	291,390	433,296

Net cash provided by operating activities	73,202	337,429

Investing Activities:
Purchases of property and equipment	(101,474)	(42,751)
Proceeds from sale of property and equipment	5,295	-

Net cash used in investing activities	(96,179)	(42,751)

Financing Activities:
Principal payments on long-term debt and capital lease obligations	(16,962)	(3,846)
Net principal payments on short-term debt	-	(50,000)
Retirement of Guaranteed Preferred Beneficial Interests in the Company’s Subordinated Debentures	-	(331,579)
Proceeds from issuance of common stock	568	277
Cash dividends paid	(3,329)	(3,340)

Net cash used in financing activities	(19,723)	(388,488)

Decrease in Cash and Cash Equivalents	(42,700)	(93,810)
Cash and Cash Equivalents, Beginning of Period	498,248	160,873

Cash and Cash Equivalents, End of Period	$ 455,548	$ 67,063

Non-cash transactions:
Tax benefit from exercise of stock options	$ 310	$ -

See notes to consolidated financial statements.

DILLARD'S, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Basis of Presentation

The accompanying unaudited consolidated financial statements of Dillard's, Inc. (the "Company") have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X, each as promulgated under the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and twelve months ended April 30, 2005 are not necessarily indicative of the results that may be expected for the fiscal year ending January 28, 2006 due to the seasonal nature of the business. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the fiscal year ended January 29, 2005 filed with the Securities and Exchange Commission on April 14, 2005.

Note 2. Stock-Based Compensation

The Company periodically grants stock options to employees. Pursuant to Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” the Company accounts for stock-based employee compensation arrangements using the intrinsic value method. No compensation expense has been recorded in the consolidated financial statements with respect to option grants. The Company has adopted only the disclosure provisions of SFAS No. 123, “Accounting for Stock Based Compensation,” as amended by SFAS No. 148, “Accounting for Stock Based Compensation - Transition and Disclosure, an Amendment of FASB Statement No. 123”. If compensation cost for the Company’s stock option plans had been determined in accordance with the fair value method prescribed by SFAS No. 123, the Company’s net income would have been (in thousands, except per share data):

	Three Months Ended		Twelve Months Ended
	April 30,	May 1,	April 30,	May 1,
	2005	2004	2005	2004
Net Income:
As reported	$38,040	$53,762	$101,944	$38,757
Deduct: Total stock based employee compensation expense determined under fair value based method, net of taxes	(274)	(485)	(1,221)	(2,241)
Pro forma	$37,766	$53,277	$100,723	$36,516
Basic Earnings Per Share:
As reported	$0.46	$0.64	$1.23	$0.46
Pro forma	0.45	0.64	1.21	0.44
Diluted Earnings Per Share:
As reported	$0.46	$0.64	$1.22	$0.46
Pro forma	0.45	0.64	1.20	0.44

The Company did not grant any options during the three and twelve months ended April 30, 2005 and May 1, 2004. See Note 11 for a discussion regarding recently issued accounting standards.

Note 3. Disposition of Credit Card Receivables

On November 1, 2004, the Company completed the sale of substantially all of the assets of its private label credit card business to GE Consumer Finance (“GE”). The purchase price of approximately $1.1 billion included the assumption of $400 million of securitization liabilities and the purchase of owned accounts receivable and other assets. Net cash proceeds received by the Company were $688 million. The Company recorded a pretax gain of $83.9 million as a result of the sale. The gain is recorded in Service Charges, Interest and Other Income on the Consolidated Statement of Income and Retained Earnings.

As part of the transaction, the Company and GE have entered into a long-term marketing and servicing alliance with an initial term of 10 years, with an option to renew. GE will own the accounts and balances generated during the term of the alliance and will provide all key customer service functions supported by ongoing credit marketing efforts.

Note 4. Accounts Receivable Securitization

Prior to November 1, 2004, the Company transferred credit card receivable balances to Dillards Credit Card Master Trust (“Trust”) in exchange for certificates representing undivided interests in such receivables. The Trust securitized balances by issuing certificates representing undivided interests in the Trust’s receivables to outside investors. In each securitization, the Company retained certain subordinated interests that served as a credit enhancement to outside investors and exposed the Trust assets to possible credit losses on receivables sold to outside investors. The investors and the Trust had no recourse against the Company beyond Trust assets. In order to maintain the committed level of securitized assets, the Trust reinvested cash collections on securitized accounts in additional balances. The Company also received annual servicing fees as compensation for servicing the outstanding balances.

All borrowings under the Company’s receivable financings were recorded on balance sheet. The Company had $400 million of long-term debt outstanding under this agreement on the consolidated balance sheet as of May 1, 2004.

The Company’s short-term receivable financing conduits were terminated and amounts outstanding were repaid concurrent with the sale of the Company’s private label credit card business to GE on November 1, 2004.

At May 1, 2004, the Company had no outstanding short-term borrowings under its accounts receivable conduit facilities related to seasonal financing needs.

Note 5. Asset Impairment and Store Closing Charges

During the quarter ended April 30, 2005, the Company recorded pretax expense of $ .4 million for asset impairment and store closing charges. This charge relates to a future lease obligation on a store closed during the quarter. The Company does not expect to incur significant additional exit costs during fiscal 2005 related to this store.

During the quarter ended May 1, 2004, the Company recorded pretax expense of $4.7 million for asset impairment and store closing charges. The expense includes a $4.2 million write down to fair value for two previously closed stores and a $ .5 million future lease obligation on a store closed during the quarter. The write

down to fair value was deemed necessary due to the current quarter deterioration in those stores market values.

Following is a summary of the quarterly activity in the reserve established for asset impairment and store closing charges:

(in thousands)	Balance, of quarter	Charges	Cash Payments	Balance, end of quarter
Rent, property taxes and utilities	$2,905	$419	$1,247	$2,077

Reserve amounts are included in trade accounts payable and accrued expenses and other liabilities.

Note 6. Note Repurchase and Retirement of Preferred Securities

During the quarter ended April 30, 2005, the Company repurchased $15.4 million of its outstanding unsecured notes prior to their maturity dates. Interest rates on the repurchased securities ranged from 7.8% to 7.9% while the maturity dates ranged from 2023 to 2027. A pre-tax loss of $ .5 million recorded within interest expense resulted from the repurchase of the unsecured notes during the quarter ended April 30, 2005.

During the quarter ended May 1, 2004, the Company repurchased $2.6 million of its 6.3% notes due February of 2008. No gains or losses resulted from the repurchase of the unsecured notes during the quarter ended May 1, 2004.

The Company redeemed the $331.6 million liquidation amount of Preferred Securities of Horatio Finance V.O.F., a consolidated entity of the Company, effective February 2, 2004. No gain or loss was incurred related to the redemption.

Note 7. Earnings Per Share Data

The following table sets forth the computation of basic and diluted earnings per share ("EPS") for the periods indicated (in thousands, except per share data).

	Three Months Ended		Twelve Months Ended
	April 30,	May 1,	April 30,	May 1,
	2005	2004	2005	2004
Basic:
Net income	$38,040	$53,762	$101,944	$38,757

Weighted average shares of common stock outstanding	83,224	83,501	83,136	83,397

Basic earnings per share	$0.46	$0.64	$1.23	$0.46

	Three Months Ended		Twelve Months Ended
	April 30,	May 1,	April 30,	May 1,
	2005	2004	2005	2004
Diluted:
Net income	$38,040	$53,762	$101,944	$38,757

Weighted average shares of common stock outstanding	83,224	83,501	83,136	83,397
Stock options	301	370	517	297
Total weighted average equivalent shares	83,525	83,871	83,653	83,694

Diluted earnings per share	$0.46	$0.64	$1.22	$0.46

Total stock options outstanding were 3,778,134 and 7,283,394 at April 30, 2005 and May 1, 2004, respectively. Of these, options to purchase 2,339,500 and 6,590,896 shares of Class A common stock at prices ranging from $28.19 to $40.22 and $18.13 to $40.22 per share were outstanding at April 30, 2005 and May 1, 2004, respectively, but were not included in the computation of diluted earnings per share because they would be antidilutive.

Note 8. Comprehensive Income and Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss only consists of the minimum pension liability, which is calculated annually in the fourth quarter. The following table shows the computation of comprehensive income (in thousands):

	Three Months Ended		Twelve Months Ended
	April 30,	May 1,	April 30,	May 1,
	2005	2004	2005	2004

Net income	$38,040	$53,762	$101,944	$38,757
Other comprehensive loss:
Minimum pension liability adjustment, net of taxes	-	-	(2,052)	(6,785)
Total comprehensive income	$38,040	$53,762	$99,892	$31,972

Note 9. Commitments and Contingencies

On July 29, 2002, a Class Action Complaint (followed on December 13, 2004 by a Second Amended Class Action Complaint) was filed in the United States District Court for the Southern District of Ohio against the Company, the Mercantile Stores Pension Plan (the “Plan”) and the Mercantile Stores Pension Committee (the “Committee”) on behalf of a putative class of former Plan participants. The complaint alleges that certain actions by the Plan and the Committee violated the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), as a result of amendments made to the Plan that allegedly were either improper and/or ineffective and as a result of certain payments made to certain beneficiaries of the Plan that allegedly were improperly calculated and/or discriminatory on account of age. The Second Amended Complaint does not specify any liquidated amount of damages sought and seeks recalculation of certain benefits paid to putative class members. No trial date has been set.

The Company is defending the litigation vigorously and has named the Plan’s actuarial firm as a cross defendant. While it is not feasible to predict or determine the ultimate outcome of the pending litigation, management believes after consultation with counsel, that its outcome, after consideration of the provisions recorded in the Company’s consolidated financial statements, would not have a material adverse effect upon its consolidated cash flow or financial position. However, it is possible that an adverse outcome could have an adverse effect on the Company’s consolidated net income in a particular quarterly or annual period.

Various legal proceedings in the form of lawsuits and claims, which occur in the normal course of business, are pending against the Company and its subsidiaries. In the opinion of management, disposition of these matters is not expected to materially affect the Company’s financial position, cash flows or results of operations.

The Company is a guarantor on a $54.3 million loan commitment for a joint venture as of April 30, 2005. At April 30, 2005, the joint venture had $40.5 million outstanding on the loan. The loan is collateralized by a mall in Yuma, Arizona with a book value of $59.2 million at April 30, 2005.

On May 20, 2005, another joint venture of the Company closed on a $185 million loan commitment. The Company is a guarantor on up to 50% of the loan balance with the joint venture partner guaranteeing the remaining 50% of the loan balance. The loan had an outstanding balance of $29.2 million as of the closing date.

At April 30, 2005, letters of credit totaling $64.4 million were issued under the Company’s $1 billion line of credit facility.

Note 10. Benefit Plans

The Company has a nonqualified defined benefit plan for certain officers. The plan is noncontributory and provides benefits based on years of service and compensation during employment. Pension expense is determined using various actuarial cost methods to estimate the total benefits ultimately payable to officers and allocates this cost to service periods. The pension plan is unfunded. The actuarial assumptions used to calculate pension costs

are reviewed annually. The Company made contributions of $ .9 million during the quarter ended April 30, 2005. The Company expects to make a contribution to the pension plan of approximately $2.7 million for the remainder of fiscal 2005.

The components of net periodic benefit costs are as follows (in thousands):

	Three Months Ended		Twelve Months Ended
	April 30, 2005	May 1, 2004	April 30, 2005	May 1, 2004
Components of net periodic benefit costs:
Service cost	$ 498	$ 442	$1,826	$1,188
Interest cost	1,189	1,183	4,623	4,359
Net actuarial gain	393	346	1,252	444
Amortization of prior service cost	157	157	626	626
Net periodic benefit costs	$2,237	$2,128	$8,327	$6,617

Note 11. Recently Issued Accounting Standards

In November 2004, the Financial Accounting Standards Board (“FASB”) issued Statements of Financial Accounting Standards (“SFAS”) No. 151, “Inventory Costs, an amendment of ARB No. 43, Chapter 4” (“SFAS No. 151”). SFAS No. 151 amends the guidance in ARB No. 43, Chapter 4, “Inventory Pricing,” to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). SFAS No. 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The adoption of SFAS No. 151 is not expected to have a material effect on the Company’s financial position, results of operations or cash flows.

In December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets - An Amendment of APB Opinion No. 29, Accounting for Nonmonetary Transactions” (“SFAS No. 153”). SFAS No. 153 eliminates from fair value measurement for nonmonetary exchanges of similar productive assets in paragraph 21 (b) of APB Opinion No. 29, and replaces it with an exception for exchanges that do not have commercial substance. SFAS No. 153 is effective for fiscal periods beginning after June 15, 2005. The adoption of SFAS No. 153 is not expected to have a material effect on the Company’s financial position, results of operations or cash flows.

In December 2004, the FASB issued Statement No. 123 (revised 2004), “Share-Based Payment” (“SFAS No. 123-R”). SFAS No. 123-R requires all forms of share-based payment to employees, including employee stock options, be treated as compensation and recognized in the income statement based on their estimated fair values. This statement will be effective for fiscal years beginning after June 15, 2005 which will be the Company’s first quarter of fiscal 2006.

The Company currently accounts for stock options under APB No. 25 using the intrinsic value method in accounting for its employee stock options. No stock-based compensation costs were reflected in net income, as no options under those plans had an exercise price less than the market value of the underlying common stock on the date of grant.

Under the adoption of SFAS No. 123-R, the Company will be required to expense stock options over the vesting period in its statement of operations. In addition, the Company will need to recognize expense over the remaining vesting period associated with unvested options outstanding as of January 28, 2006. The Company has not yet determined the method of adoption or the effect of adopting SFAS No. 123-R, and it has not determined whether the adoption will result in amounts that are similar to the current pro forma disclosures under SFAS No. 123.

In March 2005, the FASB issued FASB Interpretation No. 47 (“FIN 47”), “Accounting for Conditional Asset Retirement Obligations, an interpretation of FASB Statement No. 143.” FIN 47 clarifies the scope and timing of liability recognition for conditional asset retirement obligations under SFAS No. 143 and is effective no later than the end of our 2005 fiscal year. The Company does not expect FIN 47 to have a material impact on our consolidated financial position, results of operations or cash flows.

Note 12. Revolving Credit Agreement

At April 30, 2005, the Company maintained a $1 billion revolving credit facility with JPMorgan Chase Bank ("JPMorgan"), as agent for the banks. Borrowings under the credit agreement accrue interest at either JPMorgan's Base Rate or LIBOR plus 1.50% (currently ---4.6%) subject to certain availability thresholds as defined in the credit agreement. Availability for borrowings and letter of credit obligations under the credit agreement is limited to 75% of the inventory of certain Company subsidiaries (approximately $935.6 million at April 30, 2005). There are no financial covenant requirements under the credit agreement provided availability exceeds $100 million. The credit agreement expires on December 12, 2008. The Company pays an annual commitment fee to the banks of 0.375% of the committed amount less outstanding borrowings and letters of credit.

On June 3, 2005, the Company amended and extended its revolving credit agreement (“credit agreement”) with JPMorgan to increase the amount available under this facility from $1 billion to $1.2 billion. Borrowings under the credit agreement accrue interest at either JPMorgan's Base Rate or LIBOR plus 1.25% (currently 4.4%) subject to certain availability thresholds as defined in the credit agreement. Availability for borrowings and letter of credit obligations under the credit agreement is limited to 85% of the inventory of certain Company subsidiaries. There are no financial covenant requirements under the credit agreement provided availability exceeds $100 million. The credit agreement expires on December 12, 2010. The Company pays an annual commitment fee to the banks of 0.25% of the committed amount less outstanding borrowings and letters of credit.

Note 13. Share Repurchase Program

In May 2000, the Company announced that the Board of Directors authorized the repurchase of up to $200 million of its Class A Common Stock. No shares were repurchased during the quarters ended April 30, 2005 and May 1, 2004. Approximately $16 million in share repurchase authorization remained under this open-ended plan at April 30, 2005.

Subsequent to April 30, 2005, the Company completed the repurchase authorization of its Class A Common Stock under its existing share repurchase plan authorized by the board of directors in May of 2000. In addition, the board of directors authorized the Company to repurchase up to $200 million of its Class A Common Stock.

Item 2. Management's Discussion And Analysis Of Financial

Condition And Results Of Operations

EXECUTIVE OVERVIEW

Dillard’s, Inc. (the “Company”, “our” or “we”) operates 329 retail department stores in 29 states. Our stores are located in suburban shopping malls and open-air lifestyle centers and offer a broad selection of fashion apparel and home furnishings. We offer an appealing and attractive assortment of merchandise to our customers at a fair price. We seek to enhance our income by maximizing the sale of this merchandise to our customers. We do this by promoting and advertising our merchandise and by making our stores an attractive and convenient place for our customers to shop.

Fundamentally, the Company’s business model is to offer the customer a compelling price/value relationship through the combination of high quality products and services at a competitive price. The Company seeks to deliver a high level of profitability and cash flow. Items of note for the quarter ended April 30, 2005 include the following:

Cash and cash equivalents of $456 million as of April 30, 2005.

A comparable store sales decrease of 3%.

A reduction of advertising, selling, administrative and general expenses of $12.5 million compared to the three months ended May 1, 2004.

Interest expense reduction of $11.8 million compared to the three months ended May 1, 2004.

2005 Guidance

A summary of guidance on key financial measures for 2005, in conformity with accounting principles generally accepted in the United States of America (“GAAP”), is shown below.

See “forward-looking information” below.

(In millions of dollars)	2005	2004
	Estimated	Actual

Depreciation and amortization	$310	$302
Rental expense	48	55
Interest and debt expense	105	139
Capital expenditures	335	285

General

Net Sales . Net sales include sales of comparable stores, non-comparable stores and lease income on leased departments. Comparable store sales include sales for those stores which were in operation for a full period in both the current month and the corresponding month for the prior year. Non-comparable store sales include sales in the current fiscal year from stores opened during the previous fiscal year before they are considered comparable stores, sales from new stores opened in the current fiscal year and sales in the previous fiscal year for stores that were closed in the current fiscal year.

Service Charges, Interest and Other Income . Service Charges, Interest and Other Income includes income generated through the long-term marketing and servicing alliance between the Company and GE for the three months ended April 30, 2005 and the resulting gain on the sale of its credit card business to GE for the twelve months ended April 30, 2005. Service Charges, Interest and Other Income also includes interest and service charges, net of service charge write-offs, related to the Company’s proprietary credit card sales for the three months ended May 1, 2004 and the twelve months ended April 30, 2005 and May 1, 2004. Other income relates to joint ventures accounted for by the equity method, rental income, shipping and handling fees and gains (losses) on the sale of property and equipment and joint ventures.

Cost of Sales. Cost of sales includes the cost of merchandise sold net of purchase discounts, bank card fees, freight to the distribution centers, employee and promotional discounts, non-specific vendor allowances and direct payroll for salon personnel.

Advertising, selling, administrative and general expenses. Advertising, selling, administrative and general expenses include buying, occupancy, selling, distribution, warehousing, store and corporate expenses (including payroll and employee benefits), insurance, employment taxes, advertising, management information systems, legal, bad debt costs and other corporate level expenses. Buying expenses consist of payroll, employee benefits and travel for design, buying and merchandising personnel.

Depreciation and amortization. Depreciation and amortization expenses include depreciation and amortization on property and equipment.

Rentals. Rentals include expenses for store leases and data processing equipment rentals.

Interest and debt expense . Interest and debt expense includes interest relating to the Company’s unsecured notes, mortgage notes, credit card receivables financing, the Guaranteed Beneficial Interests in the Company’s Subordinated Debentures, gains and losses on note repurchases, amortization of financing costs, call premiums and interest on capital lease obligations.

Asset impairment and store closing charges. Asset impairment and store closing charges consist of write downs to fair value of under-performing properties and exit costs associated with the closure of certain stores. Exit costs include future rent, taxes and common area maintenance expenses from the time the stores are closed.

Critical Accounting Policies and Estimates

The Company’s accounting policies are more fully described in Note 1 of Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2005. As disclosed in this note, the preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the consolidated financial statements and accompanying notes. Since future events and their effects cannot be determined with absolute certainty, actual results will differ from those estimates. The Company evaluates its estimates and judgments on an ongoing basis and predicates those estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. Actual results will differ from these under different assumptions or conditions.

Management of the Company believes the following critical accounting policies significantly affect its judgments and estimates used in preparation of the consolidated financial statements.

Merchandise inventory. Approximately 98% of the inventories are valued at lower of cost or market using the retail last-in, first-out (“LIFO”) inventory method. Under the retail inventory method (“RIM”), the valuation of inventories at cost and the resulting gross margins are calculated by applying a calculated cost to retail ratio to the retail value of inventories. RIM is an averaging method that is widely used in the retail industry due to its practicality. Additionally, it is recognized that the use of RIM will result in valuing inventories at the lower of cost or market if markdowns are currently taken as a reduction of the retail value of inventories. Inherent in the RIM calculation are certain significant management judgments including, among others, merchandise markon, markups, and markdowns, which significantly impact the ending inventory valuation at cost as well as the resulting gross margins. Management believes that the Company’s RIM provides an inventory valuation which results in a carrying value at the lower of cost or market. The remaining 2% of the inventories are valued at lower of cost or market using the specific identified cost method.

Allowance for doubtful accounts. In November 2004, the Company sold substantially all of its accounts receivable to GE and no longer maintains an allowance for doubtful accounts.

Prior to the sale, the accounts receivable from the Company’s private label credit card sales were subject to credit losses. The Company maintained allowances for uncollectible accounts for estimated losses resulting from the inability of its customers to make required payments. The adequacy of the allowance was based on historical experience with similar customers including write-off trends, current aging information and year-end balances. Bankruptcies and recoveries used in the allowance calculation were projected based on qualitative factors such as current and expected consumer and economic trends.

Merchandise vendor allowances. The Company receives concessions from its merchandise vendors through a variety of programs and arrangements, including co-operative advertising, payroll reimbursements and markdown reimbursement programs. Co-operative advertising allowances are reported as a reduction of advertising expense in the period in which the advertising occurred. Payroll reimbursements are reported as a reduction of payroll expense in the period in which the reimbursement occurred. All other merchandise vendor allowances are recognized as a reduction of cost purchases when received. Accordingly, a reduction or increase in vendor concessions has an inverse impact on cost of sales and/or selling and administrative expenses.

Insurance accruals. The Company’s consolidated balance sheets include liabilities with respect to self-insured workers’ compensation and general liability claims. The Company estimates the required liability of such claims, utilizing an actuarial method, based upon various assumptions, which include, but are not limited to, our historical loss experience, projected loss development factors, actual payroll and other data. The required liability is also subject to adjustment in the future based upon the changes in claims experience, including changes in the number of incidents (frequency) and changes in the ultimate cost per incident (severity).

Finite-lived assets. The Company evaluates the fair value and future benefits of finite-lived assets whenever events and changes in circumstances suggest. The Company performs an analysis of the anticipated undiscounted future net cash flows of the related finite-lived assets. If the carrying value of the related asset exceeds the undiscounted cash flows, the carrying value is reduced to its fair value. Various factors including future sales

growth and profit margins are included in this analysis. To the extent these future projections or the Company’s strategies change, the conclusion regarding impairment may differ from the current estimates.

Goodwill. The Company evaluates goodwill annually and whenever events and changes in circumstances suggest that the carrying amount may not be recoverable from its estimated future cash flows. To the extent these future projections or our strategies change, the conclusion regarding impairment may differ from the current estimates.

Income taxes. Temporary differences arising from differing treatment of income and expense items for tax and financial reporting purposes result in deferred tax assets and liabilities that are recorded on the balance sheet. These balances, as well as income tax expense, are determined through management’s estimations, interpretation of tax law for multiple jurisdictions and tax planning. If the Company’s actual results differ from estimated results due to changes in tax laws, new store locations or tax planning, the Company’s effective tax rate and tax balances could be affected. As such these estimates may require adjustment in the future as additional facts become known or as circumstances change.

The Company’s income tax returns are periodically audited by various state and local jurisdictions. Additionally, the Internal Revenue Service audits the Company’s federal income tax return annually. The Company reserves for tax contingencies when it is probable that a liability has been incurred and the contingent amount is reasonably estimable. These reserves are based upon the Company's best estimation of the potential exposures associated with the timing and amount of deductions as well as various tax filing positions. Due to the complexity of these examination issues, for which reserves have been recorded, it may be several years before the final resolution is achieved.

Discount rate . The discount rate that the Company utilizes for determining future pension obligations is based on the Moody's AA corporate bond index. The indices selected reflect the weighted average remaining period of benefit payments. The discount rate had decreased to 5.5% as of January 29, 2005 from 6.0% as of January 31, 2004. The actuarial assumptions used to calculate pension costs are reviewed annually.

Results of Operations

The following table sets forth the results of operations, expressed as a percentage of net sales, for the periods indicated:

	Three Months Ended				Twelve Months Ended
	April 30,		May 1,		April 30,		May 1,
	2005		2004		2005		2004

Net sales	100.0	%	100.0	%	100.0	%	100.0	%
Cost of sales	64.9		64.0		66.9		67.4

Gross profit	35.1		36.0		33.1		32.6

Advertising, selling, administrative
and general expenses	27.6		27.5		27.9		27.5
Depreciation and amortization	4.1		4.0		4.1		3.8
Rentals	0.6		0.7		0.7		0.8
Interest and debt expense	1.5		2.1		1.7		2.3
Asset impairment and store closing charges	-		0.3		0.2		0.6

Total operating expenses	33.8		34.6		34.6		35.0
Service charges, interest and other income	2.0		3.1		3.6		3.2

Income before income taxes	3.3		4.5		2.1		0.8
Income taxes	1.2		1.6		0.7		0.3
Net income	2.1	%	2.9	%	1.4	%	0.5	%

Net Sales

The percent change by category in the Company’s sales for the three months ended April 30, 2005 compared to the three months ended May 1, 2004 is as follows:

	% Change
	05-04
Cosmetics	1.3%
Women’s and Juniors’ Clothing	-7.3%
Children’s Clothing	-4.7%
Men’s Clothing and Accessories	-3.8%
Shoes, Accessories and Lingerie	4.4%
Home	-4.3%

Net sales decreased 3% on a total basis and a comparable store basis for the three months ended April 30, 2005, compared to the three months ended May 1, 2004. Sales improved and were strongest in cosmetics and shoes, accessories and lingerie during the first quarter of 2005, with those areas performing significantly above the Company average trend of a 3% decline for the period. Sales in the other areas were below the average trend for total Company sales performance. Sales were weakest in the women’s and juniors’ category, trending significantly below the average Company performance for the period.

During the three months ended April 30, 2005, sales were strongest in the Company’s Eastern and Western regions and exceeded the average company sales performance for the quarter. Sales in the Central region were below trend.

Net sales decreased 2% for the twelve months ended April 30, 2005 compared to the same period in 2004. These decreases were primarily due to decreases in comparable store sales.

Cost of Sales

Cost of sales as a percentage of sales increased to 64.9% during the first quarter of 2005 compared with 64.0% for the first quarter of 2004. The decrease of 90 basis points in gross profit during 2005 was due to higher levels of markdown activity which increased cost of sales by 1.7% of sales. Partially offsetting these markdowns were improved levels of markups which were responsible for a decrease in cost of sales of 0.8% of sales. The higher markups are reflective of the Company’s focus on carrying higher price point merchandise. Increased markdown activity was necessary as the Company monitored and responded to lower than expected sales performance during the quarter as it maintained acceptable inventory levels. All product categories had decreased gross margins during the first quarter of 2005 except men’s, which increased slightly from 2004.

Dillard’s continues to execute key merchandise initiatives as it works to maintain relationships with existing loyal customers and attract new customers with expanded offerings in upscale and contemporary fashions. The Company will continue to use existing technology and research to edit its assortments by store to meet the specific preferences, tastes and size requirements of the local area.

Comparable store inventory at April 30, 2005 declined 2% compared to May 1, 2004. Overall inventory increased primarily due to an increase relating to inventory in transit.

Advertising, Selling, Administrative and General Expenses

Advertising, selling, administrative and general expenses ("SG&A expenses") for the three months ended April 30, 2005 decreased $12.5 million compared with May 1, 2004. SG&A expenses, as a percentage of net sales, were 27.6% and 27.9% for the three and twelve months ended April 30, 2005 compared to 27.5% for the comparable 2004 periods. The percentage increases in 2005 were driven by a lack of sales leverage.

The decrease in SG&A expenses was primarily driven by decreases in bad debt expense, payroll and communications totaling $16.5 million. These were partially offset by increases in utilities, travel, pension, pre-opening and other SG&A expenses netting $4 million. The reduction in bad debt expense, payroll and communications was primarily due to the sale of the Company’s credit card business in November 2004.

Depreciation and Amortization Expense

Depreciation and amortization expense as a percentage of sales was 4.1% for the three and twelve months ended April 30, 2005, respectively, compared to 4.0% and 3.8% for the comparable periods in 2004. The percentage increase for the three months ended April 30, 2005 is due to a lack of sales leverage during the first quarter of 2005.

Rentals

Rentals, as a percentage of net sales, was 0.6% and 0.7% for the three months and twelve months ended April 30, 2005, respectively, compared to 0.7% and 0.8% for the same three and twelve months in 2004. Rentals declined $3.1 million and $12.0 million for the three and twelve month periods ended April 30, 2005 compared to May 1, 2004, respectively. The decrease in rentals is due to a reduction in store rent expense relating to a decline in the number of leased stores and to a reduction in leased data processing equipment.

Interest and Debt Expense

Interest and debt expense for the three months ended April 30, 2005 decreased to $26.2 million or 1.5% of net sales compared to $38.0 million or 2.1% of net sales for the three months ended May 1, 2004. Average debt outstanding declined approximately $638 million during the first quarter of fiscal 2005 compared to 2004. The debt reduction was due primarily to the assumption by GE of $400 million in accounts receivable securitization debt, the payoff of short term receivable financing conduits in conjunction with the sale of the Company’s private label credit card business to GE and maturities and repurchases of various outstanding notes.

Asset Impairment and Store Closing Charges

During the quarter ended April 30, 2005, the Company recorded pre-tax expense of $419,000 for asset impairment and store closing costs. This charge relates to a future lease obligation on a store closed during the quarter. The Company does not expect to incur significant additional exit costs during fiscal 2005 related to this store or other previously impaired stores.

During the quarter ended May 1, 2004, the Company recorded pre-tax expense of $4.7 million for asset impairment and store closing costs. The expense includes a $4.2 million write down to fair value for two previously closed stores and a $500,000 future lease obligation on a store closed during the quarter. The write down to fair value was deemed necessary due to the current quarter deterioration in those stores market values.

Service Charges, Interest and Other Income

Service charges, interest and other income for the three months ended April 30, 2005 decreased to $35.7 million or 2.0% of net sales compared to $57.5 million or 3.1% of net sales for the three months ended May 1, 2004. The Company completed its sale of its credit card business during the fourth quarter of 2004 to GE and entered into a ten year marketing and servicing alliance. Included in service charges, interest and other income for the three months ended April 30, 2005 is the income from the marketing and servicing alliance of $24.5 million. Service charge income was $49.4 million for the quarter ended May 1, 2004. Earnings from joint ventures increased $2.1 million for the three months ended April 30, 2005 compared to the three months ended May 1, 2004.

Income Taxes

The federal and state income tax rate for the three month periods ended April 30, 2005 and May 1, 2004 was 36%.

Financial Condition

Financial Position Summary

(in thousands of dollars)	April 30, 2005	January 29, 2005	$ Change	% Change
Cash and cash equivalents	$455,548	$498,248	(42,700)	-8.6
Current portion of long-term debt	91,359	91,629	(270)	-0.3
Long-term debt	1,307,285	1,322,824	(15,539)	-1.2
Guaranteed Beneficial Interests	200,000	200,000	-	-
Stockholders’ equity	2,360,286	2,324,697	35,589	1.5

Current ratio	1.91%	2.19%
Debt to capitalization	40.4%	41.0%

(in thousands of dollars)	April 30, 2005	May 1, 2004	$ Change	% Change
Cash and cash equivalents	$455,548	$67,063	388,485	579.3
Current portion of long-term debt	91,359	165,692	(74,333)	-44.9
Long-term debt	1,307,285	1,852,105	(544,820)	-29.4
Guaranteed Beneficial Interests	200,000	200,000	-	-
Stockholders’ equity	2,360,286	2,287,796	72,490	3.2

Current ratio	1.91%	2.26%
Debt to capitalization	40.4%	49.2%

Net cash flows from operations of $73.2 million for the three months ended April 30, 2005 plus the beginning cash on hand were adequate to fund the Company’s operations for the quarter. Cash flows from operations decreased from 2004 levels due primarily to a $141.9 million decrease related to changes in accounts payable in the current year compared with the prior year and a $89.3 million decline related to changes in trade accounts receivables in the current year compared to the prior year. The accounts receivables related to the credit card business were sold to GE on November 1, 2004.

Capital expenditures were $101.5 million for the three months ended April 30, 2005. These expenditures consist primarily of the construction of new stores, remodeling of existing stores and investments in technology. During the quarter, the Company opened three new stores, Imperial Valley in El Centro, California; St. Johns Towne Center in Jacksonville, Florida; and Perimeter Mall in Atlanta, Georgia; and one replacement store, Crestview Hills in Crestview Hills, Kentucky. These four stores totaled approximately 585,000 square feet, net of replaced square footage. Capital expenditures for 2005 are expected to be approximately $335 million. The Company plans to open five additional new stores in fiscal 2005 totaling 962,000 square feet, net of replaced square footage. Historically, the Company has financed such capital expenditures with cash flow from operations. The Company believes that it will continue to finance capital expenditures in this manner during fiscal 2005.

Cash used in financing activities for the three months ended April 30, 2005 totaled $19.7 million compared to cash used of $388.5 million for the three months ended May 1, 2004. During the three months ended April 30, 2005, the Company made principal payments on long-term debt and capital leases of $1.6 million. During the three months ended May 1, 2004, the Company redeemed its $331.6 million Preferred Securities. The Company also reduced its short-term borrowings $50 million during the three months ended May 1, 2004. During the quarters ended April 30, 2005 and May 1, 2004, the Company repurchased $15.4 million and $2.6 million, respectively, of its outstanding unsecured notes prior to their related maturity dates.

The sale of the Company’s credit card business significantly strengthened its liquidity and financial position. The Company had cash on hand of $456 million as of April 30, 2005. During fiscal 2005, the Company expects to finance its capital expenditures and its working capital requirements including required debt repayments and stock repurchases, if any, from cash on hand and cash flows generated from operations. At April 30, 2005, letters of credit totaling $64.4 million were issued under the $1 billion revolving credit agreement leaving unutilized availability under the facility of $935.6 million. On June 2, 2005, the Company amended and extended its revolving credit

agreement (“credit agreement”) to increase the amount available under this facility from $1 billion to $1.2 billion. Depending on conditions in the capital markets and other factors, the Company will from time to time consider possible capital market transactions, the proceeds of which could be used to refinance current indebtedness or other corporate purposes.

Except as noted above, there have been no material changes in the information set forth under caption “Contractual Obligations and Commercial Commitments” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2005.

Off-Balance-Sheet Arrangements

The Company has not created, and is not party to, any special-purpose or off-balance-sheet entities for the purpose of raising capital, incurring debt or operating the Company’s business. The Company is a guarantor on a $54.3 million loan commitment for a joint venture as of April 30, 2005. At April 30, 2005, the joint venture had $40.5 million outstanding on the loan.

The Company does not have any additional arrangements or relationships with entities that are not consolidated into the financial statements that are reasonably likely to materially affect the Company’s liquidity or the availability of capital resources.

New Accounting Standards

In November 2004, the Financial Accounting Standards Board (“FASB”) issued Statements of Financial Accounting Standards (“SFAS”) No. 151, “Inventory Costs an amendment of ARB No. 43, Chapter 4” (“SFAS No. 151”). SFAS No. 151 amends the guidance in ARB No. 43, Chapter 4, “Inventory Pricing,” to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). SFAS No. 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The adoption of SFAS No. 151 is not expected to have a material effect on the Company’s financial position, results of operations or cash flows.

determined the method of adoption or the effect of adopting SFAS No. 123-R, and it has not determined whether the adoption will result in amounts that are similar to the current pro forma disclosures under SFAS No.123.

Forward-Looking Information

Statements in the Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this document include certain “forward-looking statements,” including (without limitation) statements with respect to anticipated future operating and financial performance (including the 2005 guidance regarding the Company’s estimated depreciation and amortization expense, rental expense, interest and debt expense and capital expenditures), growth and acquisition opportunities, financing requirements and other similar forecasts and statements of expectation. Words such as “expects,” “estimates”, “anticipates,” “plans” and “believes,” and variations of these words and similar expressions, are intended to identify these forward-looking statements. The Company cautions that forward-looking statements, as such term is defined in the Private Securities Litigation Reform Act of 1995, contained in this report, or made by management are based on estimates, projections, beliefs and assumptions of management at the time of such statements and are not guarantees of future performance. The Company disclaims any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information, or otherwise. Forward-looking statements of the Company involve risks and uncertainties and are subject to change based on various important factors. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements made by the Company and its management as a result of a number of risks, uncertainties and assumptions. Representative examples of those factors (without limitation) include general retail industry conditions and macro-economic conditions; economic and weather conditions for regions in which the Company’s stores are located and the effect of these factors on the buying patterns of the Company’s customers; the impact of competitive pressures in the department store industry and other retail channels including specialty, off-price, discount, internet, and mail-order retailers; changes in consumer spending patterns and debt levels; adequate and stable availability of materials and production facilities from which the Company sources its merchandise; changes in operating expenses, including employee wages, commission structures and related benefits; possible future acquisitions of store properties from other department store operators and the continued availability of financing in amounts and at the terms necessary to support the Company’s future business; potential disruption from terrorist activity and the effect on ongoing consumer confidence; potential disruption of international trade and supply chain efficiencies; events causing disruption or delays in the store construction schedule, world conflict and the possible impact on consumer spending patterns and other economic and demographic changes of similar or dissimilar nature.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

Except as disclosed above, there have been no material changes in the information set forth under caption “Item 7A-Quantitative and Qualitative Disclosures About Market Risk” in the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2005.

Item 4. Controls and Procedures

The Company maintains “disclosure controls and procedures”, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed in the Company’s reports, pursuant to the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding the required disclosures. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurances of achieving the desired control

objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of April 30, 2005, the Company carried out an evaluation, with the participation of Company’s management, including William Dillard, II, Chairman of the Board of Directors and Chief Executive Officer (principal executive officer), and James I. Freeman, Senior Vice-President and Chief Financial Officer (principal financial officer), of the effectiveness of the Company’s “disclosure controls and procedures” pursuant to Securities Exchange Act Rule 13a-15. Based on their evaluation, the principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are effective. There were no significant changes in the Company’s internal controls over financial reporting that occurred during the quarter ended April 30, 2005 to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are involved in other litigation relating to claims arising out of our operations in the normal course of business. Such issues may relate to litigation with customers, employment related lawsuits, class action lawsuits, purported class action lawsuits and actions brought by governmental authorities. As of June 3, 2005, we are not a party to any legal proceedings that, individually or in the aggregate, are reasonably expected to have a material adverse effect on our business, results of operations, financial condition or cash flows. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on our business, results of operations, financial condition or cash flows.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In May 2000, the Company announced that the Board of Directors authorized the repurchase of up to $200 million of its Class A Common Stock. The plan has no expiration date and remaining availability pursuant to our share repurchase program is $16.1 million as of April 30, 2005. There were no issuer purchases of equity securities during the first quarter of 2005.

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to a Vote of Security Holders

None

Item 5. Other Information

Ratio of Earnings to Fixed Charges:

The Company has calculated the ratio of earnings to fixed charges pursuant to Item 503 of Regulation S-K of the Securities and Exchange Act as follows:

Three Months Ended		Fiscal Years Ended

April 30,	May 1,	January 29,	January 31,	February 3,	February 2,	February 3,
2005	2004	2005	2004	2003	2002	2001*

2.82	2.92	2.11	1.07	1.94	1.52	1.79

* 53 week year.

Item 6. Exhibits

Number	Description
10.1	Dillard’s, Inc. Stock Bonus Plan
10.2	Dillard’s, Inc. Stock Purchase Plan
10.3	Dillard’s, Inc. 2005 Non-Employee Director Restricted Stock Plan
10.4	Form of Restricted Stock Award Agreement for the Dillard’s, Inc. 2005 Non-Employee Director Restricted Stock Plan
12	Statement re: Computation of Earnings to Fixed Charges.
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
32.2	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	DILLARD'S, INC.
	(Registrant)



Date: June 9, 2005	/s/ James I. Freeman
	James I. Freeman
	Senior Vice-President & Chief Financial Officer
	(Principal Financial and Accounting Officer)

DILLARD’S, INC.

STOCK BONUS PLAN

THIS STOCK BONUS PLAN, adopted and effective as of December 20, 2004, by DILLARD’S, INC. (hereinafter called "Company").

WITNESSETH:

WHEREAS, the Company desires to provide to eligible "Highly Compensated Employees," as defined in Section 414(q) of the Internal Revenue Code of 1986 ("Code"), who are selected for participation a Nonqualified Stock Bonus Plan to which the Company shall contribute a percentage of each participant’s compensation;

WHEREAS, the Company desires to adopt this Plan upon the following terms and conditions:

1.	Definitions .

As used herein, the following definitions shall apply:

a.	"Board" shall mean the Board of Directors of Dillard’s, Inc.

b.	"Bonus Grant Date" shall mean and refer to the Friday next preceding the last day of the Company's fiscal year in which the Plan Year ends; provided, however, the first Bonus Grant Date shall not occur prior to the ratification and adoption of this Plan by shareholders of the Company.

c.	"Broker" shall mean and refer to the brokerage or other company selected to purchase Common Stock pursuant to the Plan.

d.	"Code" shall mean the Internal Revenue Code of 1986, as amended.

e.	"Committee" shall mean the Stock Option and Executive Compensation Committee of the Board or any successor thereto or such other Committee designated by the Board.

f.	"Common Stock" shall mean the Common Stock, Class A, par value $0.01, of the Company which is issued and outstanding, treasury stock or authorized but unissued.

g.	"Company" shall mean Dillard’s, Inc. and any wholly owned subsidiary thereof.

h.	"Compensation" shall mean the Employee's base salary, plus the April bonus, if any, for the applicable Plan Year, but excluding any commissions or compensation received as an employee of an employer prior to the Company acquiring a controlling ownership interest in the employer.

i.	"Effective Date" shall mean December 20, 2004.

j.	"Eligible Employee" shall mean an Employee who is eligible to participate for the applicable Plan Year pursuant to the requirements of Paragraph 2.

k.	"Employee" shall mean any person actively employed on a full-time basis by the Company.

l.	"ESOP" shall mean the Dillard’s, Inc. Investment & Employee Stock Ownership Plan for Full Time Employees.

m.	"Highly Compensated Employee" shall mean any Employee who is a Highly Compensated Employee as defined in Section 414(q) of the Code.

n.	"Plan" shall mean the Dillard’s, Inc. Stock Bonus Plan.

o.	"Plan Year" shall mean the calendar year.

p.	"Share or Shares" shall mean a single share or shares of Common Stock. The aggregate number of Shares which may be allocated under this Plan shall not exceed 600,000 Shares, or the equivalent number thereto in the event of a change in the number of the issued shares after the Effective Date.

2. Eligible Employees .

a. The Employees eligible to participate in the Plan for a Plan Year shall be those Employees who are eligible participants in the ESOP during such Plan Year, are Highly Compensated Employees during such Plan Year and are employed by the Company on the Friday next preceding the last day of the Company's Fiscal Year in which the Plan Year ends.

b. Notwithstanding the foregoing Subparagraph a., an Employee who is participating in a plan providing deferred or incentive compensation or benefits which the Committee, in its discretion, determines to be a substitute for this Plan shall be ineligible to participate in this Plan.

3. Payment .

For each Plan Year, the Compensation Committee shall select the participants in the plan from the Eligible Employees, and the Company will grant on the Bonus Grant Date and deliver thereafter as soon as practicable to each selected participant that number of Shares equal to Six Percent (6%) of the Eligible Employee's Compensation in excess of

Fifteen Thousand Dollars ($15,000), less applicable withholding, divided by the current fair market value of the Shares on the Bonus Grant Date. In the event fractional shares would result from such calculation, the amount attributable to such fractional Shares shall be applied toward the Eligible Employee's tax withholding. Shares granted under the Stock Bonus Plan may be newly issued shares, shares held in treasury by the Company, or shares purchased in open market or other transactions.

4. Discontinuance of Eligibility .

a. An Employee shall be no longer eligible to participate in the Plan immediately upon the occurrence of any of the following:

(1) The termination for any reason from the active employment of the Employee from the Company.

(2) Death of the Employee.

(3) The filing with or levying upon the Company of any judgment, attachment, garnishment, or other court order affecting either the Employee's earnings or the payment of his compensation provided under this Plan.

(4) The Employee commits an act which, in the opinion of the Committee, constitutes fraud, deceit, embezzlement or the commission of any criminal act.

(5) The Employee shall enter into a business or employment which the Committee determines to be (i) detrimentally competitive with the business of the Company, or (ii) substantially injurious to the Company's financial interest.

5. Expenses .

The Company will pay the Broker for any commissions on Shares purchased pursuant to the Plan. Broker's commissions and other charges in connection with sales, dividend reinvestments, or in connection with purchases not made with the compensation provided by this Plan will be payable by the Employee who orders the transactions for his or her account.

6. Authority of Committee .

a. The Plan shall be administered by the Committee. A majority vote of the Committee at which a quorum is present, or acts reduced to or approved in writing by a majority of the members of the Committee, shall be the valid acts of the Committee for the purposes of the Plan.

b. The Committee shall have plenary authority in its discretion, but subject to the express provisions of the Plan, to determine the terms of all payments granted under the Plan, including, without limitation, the amounts of payments to be made under the Plan; the participants to whom and the time or times at which payments shall be made; to interpret the Plan; and to make all other determinations deemed advisable for the administration of the Plan. All determinations of the Committee shall be made by not less than a majority of its members. The Committee may designate Employees of Dillard’s to assist the Committee in the administration of the Plan and may grant authority to such persons to execute agreements or other documents or to take other actions on behalf of the Committee.

c. The Committee may make such rules and regulations and establish such procedures as it deems appropriate for the administration of the Plan.

d. In the event of a disagreement as to the interpretation of the Plan or any amendment hereto or any rule, regulation or procedure thereunder or as to any right or obligation arising from or related to the Plan, the decision of the Committee shall be final and binding. No member of the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any benefit granted under it.

7. Plan Amendment .

The Board may amend any or all provisions of this Plan at any time by written instrument identified as an amendment of the Plan effective as of a specified date. The Committee may amend the Plan as deemed appropriate to facilitate effective and efficient administration of the Plan, provided that no amendment adopted by the Committee shall become effective which has the effect of materially increasing Company contributions or which creates a significant risk of liability for the Company.

8. Plan Termination .

The Company expects to continue the Plan indefinitely. However, the Company shall have the right at any time to terminate the Plan in whole or in part by suspending or discontinuing contributions hereunder, or to terminate the Plan.

9. Plan Not a Contract of Employment .

The adoption and maintenance of the Plan shall not be deemed to constitute or modify a contract between any Company and any Employee or to be a consideration or inducement for or condition of the performance of service by any person. Nothing herein contained shall be deemed to give to any Employee the right to continue in any service of any Company or to interfere with any right of any Company to discharge any Employee at any time, nor to give any Company the right to require an Employee to remain in its service or to interfere with the Employee's right to terminate his service at any time.

10. Taxation .

Any compensation received by an Eligible Employee pursuant to the Plan is taxable to the Employee in the tax year in which the payment is made by the Company, and shall be reported as wages on the Employee's W-2 statement.

11. Other Benefit Plans .

Nothing contained herein shall in any way limit an Employee's right to participate in or benefit from any current or deferred compensation plan for which he is currently eligible by reason of his employment.

12. Alienation of Benefits .

None of the payments provided for by this Plan shall be subject to seizure for payment of any debts or judgments against the Employee; nor shall the Employee have any right to transfer, modify, anticipate or encumber any rights or benefits hereunder.

13. Minors, Incompetents or Lost Persons .

In the event a payment is to be made to the account of a minor or a person declared to be incompetent, then the Committee may in its discretion make such payment to the legal guardian or, if none, to a parent of a minor with whom the minor maintains his residence. Such a payment to the legal guardian or parent of a minor shall fully discharge the Company and Committee from further liability or account thereof. In the event a benefit is payable under this Plan to a person who cannot be located, the Committee may declare that such payment is forfeited.

14. Headings and Captions .

Subject headings and captions are included for convenience purposes only and shall not affect the interpretation of the Plan.

15. Gender and Pronouns .

Throughout this Plan, the masculine shall include the feminine and neuter and the singular shall include the plural and vice versa as the context requires.

16. Severability .

If any portion of this Plan is held invalid, illegal or unenforceable, such determination shall not impair the enforceability of the remaining terms and provisions herein.

17. Governing Law .

This Plan shall be governed by the laws of the State of Arkansas. Notwithstanding anything in this Plan to the contrary, it is the intention of Company that this Plan constitute a "Bonus Program" within the meaning of ERISA Regulation Section 2510.3-2(c) and therefore is exempt from the requirements of the Employee Retirement Income Security Act of 1974, as amended, and the Committee and the Board are expressly authorized to make any amendment necessary to comply with this intent.

THIS PLAN IS HEREBY ADOPTED AND EXECUTED as of the date first above written.

DILLARD’S, INC.

By: /s/ James I. Freeman

James I. Freeman,

Senior Vice President and

Chief Financial Officer

ATTEST:

/s/ Phillip R. Watts

Phillip R. Watts

DILLARD’S, INC.

STOCK PURCHASE PLAN

THIS STOCK PURCHASE PLAN, adopted and effective the 20th day of December, 2004, by DILLARD’S, INC. (hereinafter called "Company").

WITNESSETH:

WHEREAS, the Dillard’s, Inc. Investment & Employee Stock Ownership Plan for Full Time Employees ("ESOP") permits eligible employees of the Company and its wholly owned subsidiaries to have contributed up to twenty percent (20%) of their compensation ("Salary Deferral Contribution") to the ESOP and the Company makes a matching contribution of One Hundred Percent (100%) of the Salary Deferral Contribution up to five percent (5%) of the employee's compensation ("Matching Contribution");

WHEREAS, as a result of the non-discrimination tests under Sections 401(k) and 401(m) of the Internal Revenue Code of 1986 ("Code"), the limitation on Salary Deferral Contributions under Section 402(g) of the Code, the limitation on compensation which can be taken into account under Section 401(a)(17) of the Code and the maximum limitation on contributions under Section 415 of the Code, "Highly Compensated Employees," as defined in Section 414(q) of the Code, may be limited under the ESOP to a Salary Deferral Contribution of less than twenty percent (20%) of their compensation and a Matching Contribution of less than five percent (5%) of their compensation; and

WHEREAS, the Company desires to provide a plan to which shall be contributed the excess portions of a Highly Compensated Employee's Salary Deferral Contribution and Matching Contribution which are not permitted to be allocated under the ESOP solely as a result of the limitations in the Code;

WHEREAS, this Plan is intended to be an “excess benefit plan” as defined in Rule 16b-3(b)(2) to Section 16 of the Securities Exchange Act of 1934, which is an employee benefit plan that is operated in conjunction with a qualified plan (as defined in the rule), and provides only the benefits or contributions that would be provided under the qualified plan but for any benefit or contribution limitations set forth in the Code;

WHEREAS, the Company desires to adopt this Plan upon the following terms and conditions:

1.	Definitions .

As used herein, the following definitions shall apply:

a.	"Board" shall mean the Board of Directors of Dillard’s, Inc.

b.	"Broker" shall mean and refer to the brokerage or other company which will receive contributions from the Company, receive Common Stock as contributions or purchase Common Stock with cash contributions and maintain an account for each Employee participating in the Plan.

c.	"Code" shall mean the Internal Revenue Code of 1986, as amended.

d.	"Committee" shall mean the Stock Option and Executive Compensation Committee of the Board or any successor thereto or such other Committee designated by the Board.

e.	"Common Stock" shall mean the Common Stock, Class A, no par value, of the Company which is issued and outstanding, treasury stock or authorized but unissued.

f.	"Company" shall mean Dillard’s, Inc. and any wholly owned subsidiary thereof.

"Compensation" shall mean the compensation amount which is reportable as the “Wages, Tips and other Compensation’ box on the Employee’s Form W-2 for the Plan Year. Notwithstanding the foregoing sentence however, Compensation shall exclude any amount not paid as cash compensation during the Plan Year and any compensation received as an employee of an Employer prior to the Company acquiring a controlling ownership interest in the Employer.

h.	"Effective Date" shall mean December 20, 2004.

i.	"Eligible Employee" shall mean an Employee who is eligible to participate for the applicable Plan Year pursuant to the requirements of Paragraph 2.

j.	"Employee" shall mean any person actively employed on a full-time basis by the Company.

k.	"Employer" shall mean the Company.

l.	"ESOP" shall mean the Dillard’s, Inc. Investment & Employee Stock Ownership Plan for Full Time Employees.

m.	"Highly Compensated Employee" shall mean any Employee who is a Highly Compensated Employee as defined in Section 414(q) of the Code.

n.	"Matching Contribution" shall mean an Employee's total Company contribution under the ESOP and this Plan which are made by the Company as a matching contribution.

o.	"Plan" shall mean the Dillard’s, Inc. Stock Purchase Plan.

p.	"Plan Year" shall mean the calendar year.

q.	"Salary Deferral Contribution" shall mean an Employee's payroll deduction amount which is allocated as a contribution to the ESOP pursuant to the requirements of Section 401(k) of the Code.

r.	"Share or Shares" shall mean a single share or shares of Common Stock. The aggregate number of Shares which may be allocated under this Plan shall not exceed 1,000,000 Shares, or the equivalent number thereto in the event of a change in the number of the issued shares after the Effective Date.

s.	"Stock Purchase Employee Contribution" shall mean an Employee's payroll deduction amount which is allocated as an after-tax contribution to this Plan.

t.	"'34 Act" shall mean the Securities Exchange Act of 1934.

2. Eligible Employees .

a. The Employees eligible to participate in the Plan for a Plan Year shall be those Employees who are eligible participants in the ESOP during such Plan Year and are Highly Compensated Employees during such Plan Year.

3. Determination of Excess Amount .

a. At the Beginning and During each Plan Year. Each Eligible Employee shall elect prior to the beginning of each Plan Year and for as many times as permitted pursuant to the ESOP to have a certain whole number percentage of his Compensation he would otherwise receive directly during the Plan Year to be applied as a contribution to the ESOP and this Plan. The Committee shall determine the amount of

each Eligible Employee's estimated Salary Deferral Contribution which will be deducted from each payroll and allocated to the ESOP, which will not exceed the lesser of the amount permitted under Section 402(g) of the Code for the Plan Year or the amount permitted to be contributed by the Administrative Committee of the ESOP for Highly Compensated Employees for the Plan Year. The portion of the Eligible Employee's election in excess of the amount allocated to the Salary Deferral Contribution to the ESOP shall be deducted from each payroll and contributed as a Stock Purchase Employee Contribution. The Company shall also contribute at the end of each week during the Plan Year as a Matching Contribution to this Plan an amount equal to One Hundred Percent (100%) of the Stock Purchase Employee Contribution made for such week, but in no event shall the Employee's Matching Contribution for the Plan Year (i.e., the total of both the matching contribution under the ESOP and this Plan) exceed Five Percent (5 %) of the Employee’s Compensation for the Plan Year.

b. At the End of each Plan Year . Prior to or soon after the end of each Plan Year of the ESOP, the Company shall determine the actual amount of each Highly Compensated Employee's Salary Deferral Contribution and Matching Contribution to the ESOP which may be retained in the ESOP pursuant the limitations imposed under the non-discrimination tests under Section 401(k) and 401(m) of the Code. The amount of the Salary Deferral Contribution, Matching Contribution and income earned thereon, as computed under the rules and regulations interpreting Sections 401(k) and 401(m) of the Code, which cannot be retained in the ESOP or must be forfeited under the terms of the ESOP, shall be contributed to this Plan as a Stock Purchase Employee Contribution and Matching Contribution.

4. Application of Subscription Proceeds .

a. The Company will remit the accumulated payroll deductions and Matching Contributions allocable to this Plan pursuant to Paragraph 3(a) on a weekly basis to the Broker in the form of cash, Shares of an equivalent value or both.

b. The Company will remit the excess Salary Deduction Contributions, Matching Contributions and income thereon allocable to the Stock Purchase Plan pursuant to Paragraph 3(b) to the Broker in the form of cash, Shares of an equivalent value or both as soon as reasonably possible after the withdrawal from the ESOP.

5. Shares Allocated to Plan .

If the Broker receives cash contributions, the Broker will purchase Common Stock over a period of several days for as many Shares as the funds will allow and the Employee's cost per Share will be the average of the overall cost. The number of shares purchased will depend upon the market price of the Common Stock at the time such purchases are made. A separate account for each participating Employee shall be credited with the number of Shares, including fractional Shares, to which such Employee shall be entitled on the basis of his proportion, including the Company's contribution hereunder,

of the aggregate funds and Shares delivered to Broker. No actual stock certificate for the Shares each Employee owns shall be issued, unless requested. However, each quarter the Employee shall receive a statement from the Broker showing the number of Shares (fractional or otherwise), received, purchased or sold, the price, and the total number of Shares in the Employee's account as of that date. Any dividends received on the Common Stock held in an Employee's account shall be automatically reinvested, unless otherwise designated by the Employee. There shall be no holding period for the Shares acquired pursuant to this Plan, and an Employee may take delivery of the Shares or direct that the Broker sell Shares and distribute the proceeds thereof, at any time.

6. Discontinuance of Eligibility .

a. An Employee shall be no longer eligible to participate in the Plan and no further Stock Purchase Employee Contributions shall be deducted immediately upon the occurrence of any of the following:

(1) The termination for any reason from the active employment of the Employee from the Employer, except a Stock Purchase Employee Contribution shall be deducted from the Employee's final payroll for active employment.

(2) Death of the Employee, except a Stock Purchase Employee Contribution shall be deducted from the Employee's final payroll for active employment.

(3) The filing with or levying upon the Company or the Employer of any judgment, attachment, garnishment, or other court order affecting either the Employee's earnings or his or her account under this Plan.

(4) The Employee commits an act which, in the opinion of the Committee, constitutes fraud, deceit, embezzlement or the commission of any criminal act.

7. Expenses .

The Company will pay the Broker for commissions, if any, on purchases made for the Employee's account as a result of the Company's and the Employee's contributions. The Company will also pay the Broker for any fees charged by the Broker for administration of the Plan. Broker's commissions and other charges in connection with sales, dividend reinvestments, or in connection with purchases not made by the Employee's payroll deduction and the Company contribution will be payable by the Employee who orders the transactions for his or her account.

8. Authority of Committee .

b. The Committee shall have plenary authority in its discretion, but subject to the express provisions of the Plan, to determine the terms of all contributions and transactions under the Plan, including, without limitation, the amounts of all contributions to be made under the Plan; the participants to whom and the time or times at which contributions shall be made; to interpret the Plan; and to make all other determinations deemed advisable for the administration of the Plan. All determinations of the Committee shall be made by not less than a majority of its members. The Committee may designate Employees of Dillard’s to assist the Committee in the administration of the Plan and may grant authority to such persons to execute agreements or other documents or to take other actions on behalf of the Committee.

c. The Committee may make such rules and regulations and establish such procedures as it deems appropriate for the administration of the Plan.

9. Plan Amendment .

10. Plan Termination .

11. Plan Not a Contract of Employment .

The adoption and maintenance of the Plan shall not be deemed to constitute or modify a contract between any Employer and any Employee or to be a consideration or inducement for or condition of the performance of service by any person. Nothing herein

contained shall be deemed to give to any Employee the right to continue in any service of any Employer or to interfere with any right of any Employer to discharge any Employee at any time, nor to give any Employer the right to require an Employee to remain in its service or to interfere with the Employee's right to terminate his service at any time.

12. Taxation .

The Employee's and the Company's contribution to the Plan are taxable to the Employee, as compensation received, in the tax year in which the payroll deduction occurs for Employee contributions and in the tax year of the contribution for Company contributions, and shall be reported as wages on the Employee's W-2 statement.

13. Other Benefit Plans .

14. Alienation of Benefits .

15. Minors, Incompetents or Lost Persons .

16. Headings and Captions .

Subject headings and captions are included for convenience purposes only and shall not affect the interpretation of the Plan.

17. Gender and Pronouns .

Throughout this Plan, the masculine shall include the feminine and neuter and the singular shall include the plural and vice versa as the context requires.

18. Severability .

If any portion of this Plan is held invalid, illegal or unenforceable, such determination shall not impair the enforceability of the remaining terms and provisions herein.

19. Governing Law .

THIS PLAN IS HEREBY ADOPTED AND EXECUTED as of the date first above written.

DILLARD’S, INC.

By: /s/ James I. Freeman

James I. Freeman,

Senior Vice President and

Chief Financial Officer

ATTEST:

/s/ Phillip R. Watts

Phillip R. Watts

DILLARD’S, INC.

2005 NON-EMPLOYEE DIRECTOR

RESTRICTED STOCK PLAN

ARTICLE I

PURPOSE

Section 1.01. Purpose . This Dillard’s, Inc. 2005 Non-Employee Director Restricted Stock Plan (the “Plan”) is intended to attract, retain and motivate non-employee directors of Dillard’s, Inc., a Delaware corporation (“Dillard’s”), by providing them with a proprietary interest in the growth and performance of Dillard’s and to encourage them to increase their stock ownership in Dillard’s. The name of the plan shall be the Dillard’s, Inc. 2005 Non-Employee Directors Restricted Stock Plan (the “Plan”). The Plan is adopted and effective as of the date set forth in Section 7.04 hereof.

ARTICLE II

DEFINITIONS

Capitalized terms used and not otherwise defined in the Plan shall have the following meanings:

“ Award ” means a grant of Restricted Shares.

“ Board ” or “ Board of Directors ” means the Board of Directors of Dillard’s as constituted from time to time.

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

“ Committee ” means the Stock Option and Executive Compensation Committee of the Board or any successor thereto or such other Committee designated by the Board.

“ Disability ” shall mean the inability to engage in any substantial gainful activity because of a medically determinable physical or mental impairment which can be expected to last for a continuous period of 12 months or more or that may result in death; or, eligibility for receipt of Dillard’s disability benefits for a period of more than three months by reason of a medically determinable physical or mental impairment which can be expected to last for a period of 12 months or more or that may result in death.

“ Employee ” means any person employed by Dillard’s or a Subsidiary of Dillard’s as an employee (as defined in Section 425(f) of the Code) and not as an independent contractor.

“Non-Employee Director” means any member of the Board who is not an employee of Dillard’s or an affiliate of Dillard’s.

“ Participant ” means any Non-Employee Director who is selected for participation by the Committee in accordance with Article III and who receives an Award under the Plan.

“ Restricted Period ” means the period during which Awards may be forfeited under Sections 5.03 and 5.04. Notwithstanding the foregoing, under no circumstances shall the Restricted Period with respect to any Participant be less than six months. This minimum Restricted Period is intended to qualify each transaction under the Plan as an exempt transaction pursuant to Rule 16b-3(d)(3) under the Exchange Act.

“ Restricted Shares ” means Shares that are subject to the restrictions (including the restrictions on transferability) and the substantial risks of forfeiture described in the Plan or in an applicable Stock Award Agreement.

“ Retire” or “Retirement ” means ceasing to be a member of the Board as a result of a determination by the Board that such person is no longer eligible to stand for election in accordance with the corporate governance guidelines of Dillard’s that may be in effect from time to time.

“ Share ” means a share of Class A Common Stock, $0.01 par value, of Dillard’s.

“ Stock Award Agreement ” means an agreement executed by a Participant prior to receiving an Award.

“ Subsidiary ” means (i) any corporation of which Dillard’s owns, directly or indirectly, capital stock representing more than 50% of the combined voting power of all classes of capital stock, and (ii) any other entity or enterprise (including, but not limited to, a partnership or joint venture) of which Dillard’s owns, directly or indirectly, equity interests representing more than 50% of the combined voting power of all classes of equity.

ARTICLE III

ELIGIBILITY AND PARTICIPATION

Section 3.01. Eligibility . Awards under this Plan may only be made to a person who, at the time of grant of the Award, is a Non-Employee Director.

ARTICLE IV

COMPANY STOCK SUBJECT TO PLAN

Section 4.01. Maximum Number of Shares . The total number of Shares for which Awards may be granted under the Plan shall not exceed 200,000 Shares. The maximum number of Shares issued are subject to adjustment in accordance with Section 4.03. The Shares issued under the Plan may be authorized and unissued Shares

or treasury Shares. The number of Shares available for issuance under the Plan shall not be reduced to reflect any dividends or dividend equivalents that are reinvested into additional Shares.

Section 4.02. Forfeited Shares . In the event Awards are forfeited to Dillard’s in accordance with the terms of the Plan, the Shares so forfeited again shall be available for grant and issuance under the Plan.

Section 4.03. Recapitalization Adjustment . In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, share combination or other changes in the corporate structure of Dillard’s affecting the Shares, the Committee may make such adjustments to the number of Shares specified in Section 4.01 or in any Award, the kind of capital stock to be issued under the Plan, or both, as it determines, in its sole discretion, to be appropriate to prevent dilution or enlargement of rights under the Plan.

ARTICLE V

AWARDS

Section 5.01. Conditions to Grant . As a condition to the grant of Awards, Dillard’s shall require the Participant to execute a Stock Award Agreement prior to issuing the Award.

Section 5.02. Amount of Awards . The amount of Awards to be issued under the Plan may vary from year to year and by Participant to Participant in the Committee’s sole discretion. In no event, however, may Awards be issued to any Participant if such issuance would (i) cause the total number of Restricted Shares awarded under the Plan to a single Participant to exceed 5,000 Shares in any fiscal year of Dillard’s without being approved by the Board or (ii) cause the total number of Shares issued to all Participants to equal or exceed the maximum amount allowed in Section 4.01. The Committee shall have the right to grant new Awards in exchange for outstanding Awards.

Section 5.03. Restricted Shares .

(a) Awards of Restricted Shares shall be subject to the terms and conditions set forth in the Stock Award Agreement.

(b) The Committee shall have discretion in determining the terms and conditions of each Award. Awards of Restricted Shares under Stock Award Agreements shall be subject to such restrictions as determined by the Committee.

(c) The Committee shall establish any vesting schedule applicable to Restricted Shares and shall specify the periods of restriction, vesting and other requirements. Until the end of the period(s) of time specified in the vesting schedule, the Restricted Shares subject to such Award shall remain subject to forfeiture.

(d) Notwithstanding any term, condition, restriction and/or limitation with respect to an Award granted under the Plan but subject to the restrictions on transfer and forfeiture in this Plan, a Participant who has been granted an Award shall be entitled to all of the rights of a shareholder with respect to the Restricted Shares underlying the Award from the date of grant, including voting rights and the rights to receive dividends and other distributions. All Shares or other securities paid on an Award shall be held by the Company and shall be subject to the same restrictions as the Award to which they relate.

Section 5.04. Vesting. Unless otherwise provided in the Stock Award Agreement, all unvested Awards shall become immediately vested upon the Participant’s termination of service as a member of the Board prior to the expiration of the Restricted Period as a result of the Participant’s Retirement, death or Disability. Upon a Participant’s termination of service as a member of the Board for any other reason prior to the expiration of the Restricted Period, all unvested Awards shall be forfeited to Dillard’s and be available for reissuance under the Plan. The Committee may accelerate the vesting for any or all of the unvested Awards for any Participant if the Committee determines that the circumstances in a particular case so warrant, and upon such a determination, all restrictions applicable to the Restricted Shares shall lapse.

Section 5.05. Issuance of Awards; Awards Held In Escrow . Unless and until the Awards have vested as set forth in the Plan and the related Stock Award Agreements, such Awards shall be issued in the name of the Participant and held by the Secretary of Dillard’s (or its designee) as escrow agent, and shall not be sold, transferred, or otherwise disposed of, and shall not be pledged or otherwise hypothecated other than a transfer of vested Restricted Shares upon death by will, by descent and distribution or by designation of a beneficiary in accordance with Section 7.02. Dillard’s may determine to issue the Awards in book entry form and/or may instruct the transfer agent for its common stock to place a legend on certificates representing the Restricted Shares or Performance-Based Restricted Shares or otherwise note its records as to the restrictions on the transfer as set forth in the Plan.

Section 5.06. Delivery of Certificates . As soon as practicable after complete vesting of the Awards granted to the Participant, the Secretary of Dillard’s (or its designee), as escrow agent, shall cause to be delivered to the Participant or a broker designated by Dillard’s for the purpose of receiving such Shares, a certificate or certificates representing those Shares free of all restrictions created under this Plan and the related Stock Award Agreements. Prior to such delivery, Dillard’s may require the Participant to establish a brokerage account with the broker designated by Dillard’s to receive the Shares and execute and deliver to Dillard’s a written statement, in form satisfactory to Dillard’s, in which the Participant represents that he or she is acquiring Shares for the Participant’s own account, for investment only and not for resale or distribution of any such Shares.

ARTICLE VI

ADMINISTRATION

Section 6.01. Authority of the Committee .

(a) The Plan shall be administered by the Committee. A majority vote of the Committee at which a quorum is present, or acts reduced to or approved in writing by a majority of the members of the Committee, shall be the valid acts of the Committee for the purposes of the Plan.

(b) The Committee shall have plenary authority in its discretion, but subject to the express provisions of the Plan, to determine the terms of all Awards granted under the Plan, including, without limitation, the Participants to whom and the time or times at which Awards shall be granted; the vesting schedule for such Award grants; establishing performance-based criteria and determining if such criteria is achieved; to interpret the Plan; and to make all other determinations deemed advisable for the administration of the Plan. All determinations of the Committee shall be made by not less than a majority of its members. The Committee may designate Employees of Dillard’s to assist the Committee in the administration of the Plan and may grant authority to such persons to execute agreements or other documents or to take other actions on behalf of the Committee.

(c) The Committee may make such rules and regulations and establish such procedures as it deems appropriate for the administration of the Plan.

(d) In the event of a disagreement as to the interpretation of the Plan or any amendment hereto or any rule, regulation or procedure thereunder or as to any right or obligation arising from or related to the Plan, the decision of the Committee shall be final and binding. No member of the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any benefit granted under it.

ARTICLE VII

MISCELLANEOUS

Section 7.01. No Rights as Director. Neither the Plan nor any Awards granted hereunder shall confer upon any Participant any right to be elected to or to remain as a member of the Board.

Section 7.02. Designation of Beneficiary . Each Participant from time to time may name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be issued or transferred in the event of the Participant’s death (or who may exercise the Participant’s rights hereunder, if any, that are exercisable following the death of the Participant). Each designation shall revoke all prior designations by the Participant, shall be in a form prescribed by the

Committee and shall be effective only when filed by the Participant in writing with the Committee or its designee during the Participant’s lifetime.

Section 7.03. Withholding . Dillard’s shall have the right to withhold with respect to any payments or grants made to Participants under the Plan any taxes required by law to be withheld because of such payments or grants. With respect to any such withholding:

(e) Each Participant shall take whatever action that the Committee deems appropriate to comply with the law regarding withholding of federal, state and local taxes.

(f) When a Participant is obligated to pay to Dillard’s an amount required to be withheld under applicable income tax laws in connection with the Awards, the Committee may, in its discretion and subject to such rules as it may adopt, permit the Participant to satisfy this obligation, in whole or in part, by delivering to Dillard’s already-owned shares to satisfy the withholding amount.

Section 7.04. Effective Date . The Plan is effective on April 15, 2005 (the “Effective Date”). No Shares may be issued unless the Plan is approved by a vote of the holders of a majority, or as otherwise provided in the certificate of incorporation, Bylaws of Dillard’s or the listing standards of the New York Stock Exchange, of the outstanding shares of Dillard’s common stock cast at a meeting of the stockholders of Dillard’s at which a quorum is present held within 12 months following the Effective Date.

Section 7.05. Amendment . The Board may amend the Plan from time to time as it deems desirable or necessary by any applicable rules and regulations, and such amendments shall include the ability of the Board to amend the Plan and, with shareholder approval, to increase the number of Shares subject to the Plan. Any amendment to the Plan shall not apply to Awards granted to Participants that have vested prior to the effective date of the amendment unless it has been otherwise agreed to, in writing, by the Committee and the affected Participant.

Section 7.06. Termination of Plan . The Plan will automatically terminate 10 years from its Effective Date. Notwithstanding the foregoing, the Board may, in its discretion, terminate the Plan earlier at any time, but no such termination shall deprive Participants of their rights under Restricted Share grants existing prior to such termination.

Section 7.07. Successors . The Plan shall inure to the benefit of and shall be binding upon each successor of Dillard’s by merger, consolidation or acquisition of all or substantially all of the assets. All rights and obligations imposed upon a Participant and all rights granted to Dillard’s under this Plan shall be binding upon the Participant’s heirs, legal representatives and successors.

Section 7.08. Notice . Each notice given under the Plan shall be in writing and shall be delivered in person or by certified or registered mail to the proper address. Each notice to Dillard’s shall be addressed as follows: Dillard’s, Inc., 1600 Cantrell Road, Little Rock, Arkansas 72201, Attention: Secretary. Each notice to a Participant shall be addressed to the Participant at the address of the Participant maintained by Dillard’s on its books and records. Anyone to whom a notice may be given under the Plan may designate a new address by written notice to the other party to that effect.

Section 7.09. Compliance with Laws and Requirements . No Shares shall be issued under the Plan unless the issuance and delivery of such shares comply with all applicable provisions of state and federal law, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, the rules and regulations promulgated thereunder and the requirements of any market system or stock exchange upon which the Shares may then be listed.

Section 7.10. Governing Law . The Plan shall be construed in accordance with and governed by the laws of the State of Delaware.

THIS PLAN IS HEREBY ADOPTED AND EXECUTED as of the 15 ^th day of April, 2005.

DILLARD’S, INC.

By: /s/ James I. Freeman

James I. Freeman,

Senior Vice President and

Chief Financial Officer

ATTEST:

/s/ Phillip R. Watts

Phillip R. Watts

Form of

DILLARD’S, INC.

restricted stock award agreement

(2005 Non-Employee Director Restricted Stock Plan)

THIS RESTRICTED STOCK AWARD AGREEMENT (this “Agreement”), made as of the day of , (the “Grant Date”), between DILLARD’S INC. , a Delaware corporation (“Dillard’s”), and (the “Grantee”);

W I T N E S S E T H :

WHEREAS, Dillard’s has adopted the 2005 Non-Employee Director Restricted Stock Plan (the “Plan”) (except as otherwise expressly set forth herein, the capitalized terms used in this Agreement shall have the same definitions set forth in the Plan); and

WHEREAS, pursuant to the Plan, the Committee has determined to grant an Award to the Grantee in the form of shares of Class A Common Stock subject to the terms, conditions and limitations provided herein and in the Plan (“Restricted Shares”);

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

GRANT OF RESTRICTED SHARES

Section 1.01. Dillard’s hereby grants to Grantee, on the terms and conditions set forth in this Agreement, the number of shares of Restricted Shares set forth under the Grantee’s name on the signature page hereto. The Restricted Shares are granted without requirement of payment. However, if the Restricted Shares have not been previously issued, the Grantee agrees to pay the par value ($0.01) per Restricted Share no later than 10 business days after the Grant Date. Grantee will be advised if this is the case and be given payment instructions at that time.

Section 1.02. The Grantee’s rights with respect to all the Restricted Shares shall remain forfeitable at all times prior to the Lapse Date (as defined below).

Section 1.03. This Agreement shall be construed in accordance with, and subject to, the terms of the Plan (the provisions of which are incorporated herein by reference). By signing this Agreement, the Grantee accepts this Award, acknowledges receipt of a copy of the Plan and the prospectus for the Plan and acknowledges that the award is subject to all the terms and provisions of the Plan and this Agreement. Grantee further agrees to accept as binding, conclusive and final all decisions and interpretations by the Committee of the Plan upon any questions arising under the Plan.

ARTICLE II

RIGHTS OF GRANTEE

Except as otherwise provided in this Agreement and other than with respect to those Restricted Shares which have been forfeited pursuant to Section 3.02 hereof, the Grantee shall be entitled, at all times on and after the Grant Date, to exercise all rights of a shareholder with respect to the Restricted Shares (whether or not the restrictions thereon shall have lapsed), including the right to vote the Restricted Shares and the right to receive dividends thereon. Notwithstanding the foregoing, prior to the Lapse Date, the Grantee shall not be entitled to transfer, sell, pledge, hypothecate or assign any Restricted Shares (collectively, the “Transfer Restrictions”).

ARTICLE III

VESTING; FORFEITURES; LAPSE OF RESTRICTIONS

Section 3.01. The Transfer Restrictions with respect to all the Restricted Shares granted under this Agreement shall lapse on the _____________ anniversary of the Grant Date (the “Lapse Date”), provided the Grantee continues to serve as a member of the board of directors of Dillard’s until such Lapse Date; provided, however, that the Transfer Restrictions with respect to all the Restricted Shares shall lapse, if sooner, on the date of the Grantee’s termination as a member of the board of directors as a result of the Grantee’s Retirement, death or Disability (also, a “Lapse Date”). Notwithstanding anything in the vesting acceleration provision contained in the provision of the preceding sentence to the contrary, in no event shall the Grantee be vested or otherwise entitled to more than 100% of the Restricted Shares granted pursuant to Section 1.01 above.

Section 3.02. Notwithstanding anything in this Agreement to the contrary, upon the termination of the Grantee’s service as a member of the board of directors of Dillard’s for any reason other than as a result of the Grantee’s Retirement, death or Disability, all of the Restricted Shares in which the Transfer Restrictions have not previously lapsed in accordance with Section 3.01 hereof shall be forfeited and automatically transferred to and reacquired by Dillard’s at no cost to Dillard’s, and neither the Grantee nor any beneficiaries, heirs, executors, administrators or successors of such Grantee shall thereafter have any right or interest in the Restricted Shares.

ARTICLE IV

ESCROW AND DELIVERY OF SHARES

Section 4.01. Certificates (or an electronic “book entry” on the books of Dillard’s or its designee) representing the Restricted Shares shall be issued and held by Dillard’s (or its designee) in escrow (together with any stock transfer powers which Dillard’s may request of Grantee) and shall remain in the custody of Dillard’s (or its designee) until (a) their delivery to the Grantee or his/her estate as set forth in Section 4.02 hereof, or (b) their forfeiture and transfer to Dillard’s as set forth in Section 3.02 hereof.

Section 4.02. (a) Subject to paragraph (b) of this Section 4.02, certificates (or an electronic “book entry”) representing those Restricted Shares in respect of which the Transfer Restrictions have lapsed pursuant to Section 3.01 hereof shall be delivered to the Grantee or a broker designated by Dillard’s for the purpose of receiving such Restricted Shares as soon as practicable following the Lapse Date, subject to the application of Article VIII below.

(b) Certificates (or an electronic “book entry”) representing those Restricted Shares in respect of which the Transfer Restrictions have lapsed pursuant to Section 3.01 upon the Grantee’s death shall be delivered to a broker designated by Dillard’s for the purpose of receiving such Restricted Shares or to the Grantee’s beneficiary if one is designated, or the executors or administrators of the Grantee’s estate as soon as practicable following the Lapse Date and Dillard’s receipt of notification of the Grantee’s death, accompanied by an official death certificate.

(c) The Grantee, beneficiary, the executors or administrators of the Grantee’s estate, as the case may be, may receive, hold, sell or otherwise dispose of those Restricted Shares delivered to him or her pursuant to paragraph (a) or (b) of this Section 4.02 free and clear of the Transfer Restrictions, but subject to compliance with all federal and state securities laws.

Section 4.03. (a) Any stock certificate issued pursuant to Section 4.01 shall bear a legend in substantially the following form:

This certificate and the shares of stock represented hereby are subject to the terms and conditions applicable to the Restricted Shares contained in the 2005 Non-Employee Director Restricted Stock Plan (the “Plan”) and a Restricted Stock Award Agreement (the “Agreement”) between Dillard’s and the registered owner of the shares represented hereby. Release from such terms and conditions shall be made only in accordance with the provisions of the Plan and the Agreement, copies of which are on file in the office of the Secretary of Dillard’s.

(b) As soon as practicable following a Lapse Date, Dillard’s shall issue a new certificate (or electronic “book entry”) for the Restricted Shares which have become nonforfeitable in relation to such Lapse Date, which new certificate (or electronic “book entry”) shall not bear the legend set forth in paragraph (a) of this Section 4.03 and shall be delivered in accordance with Section 4.02 hereof.

ARTICLE V

NO RIGHT TO CONTINUED SERVICE AS A DIRECTOR

Nothing in this Agreement or the Plan shall be interpreted or construed to confer upon the Grantee any right with respect to continued service or election to the board of directors of Dillard’s, nor shall this Agreement or the Plan interfere in any way with any right of stockholders or the board of directors of Dillard’s to nominate, elect or remove a director on the board of directors.

ARTICLE VI

ADJUSTMENTS UPON CHANGE IN CAPITALIZATION

If, by operation of Section 4.03 of the Plan, the Grantee shall be entitled to new, additional or different shares of stock or securities of Dillard’s or any successor corporation or entity or other property, such new, additional or different shares or other property shall thereupon be subject to all of the conditions and restrictions which were applicable to the Restricted Shares immediately prior to the event and/or transaction that gave rise to the operation of Section 4.03 of the Plan.

ARTICLE VII

TAX WITHHOLDING/SECTION 83 ELECTION

Section 7.01. Tax Consequences and Section 83(b) Election . The Grantee has reviewed with the Grantee’s own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. The Grantee is relying solely on such advisors and not on any statements or representations of Dillard’s or any of its agents. The Grantee understands that the Grantee (and not Dillard’s) shall be responsible for the Grantee’s own tax liability that may arise as a result of the transactions contemplated by this Agreement.

In connection with this Agreement, the Grantee may make an election under Section 83(b) of the Code to include in the Grantee’s gross income in the year of this Award the amount specified in Section 83(b) of the Code. If the Grantee makes such an election, the Grantee shall notify Dillard’s in writing of such election within 10 days after filing the notice of the election with the Internal Revenue Service, in addition to any filing and notification required pursuant to regulations issued under Section 83(b) of the Code.

THE GRANTEE ACKNOWLEDGES THAT IT IS THE GRANTEE’S SOLE RESPONSIBILITY AND NOT DILLARD’S TO TIMELY FILE THE ELECTION UNDER SECTION 83(b) OF THE CODE, EVEN IF THE GRANTEE REQUESTS DILLARD’S OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE GRANTEE’S BEHALF.

Section 7.02. Tax Withholding . Subject to certain exceptions in the event the Grantee has previously made a valid Section 83(b) election, upon the vesting of the Restricted Shares the Grantee will have income in the amount of the value of the Restricted Shares that become vested

on the Lapse Date, and the Grantee acknowledges that he or she must pay income tax on that income. Whenever any Restricted Shares becomes vested under the terms of this Agreement, the Grantee must remit, on or prior to the due date thereof, the minimum amount necessary to satisfy all of the federal, state and local withholding (including FICA) tax requirements imposed on Dillard's relating to the Restricted Shares. The Committee may require the Grantee to satisfy these minimum withholding tax obligations by any (or a combination) of the following means: (i) a cash, check, or wire transfer; (ii) authorizing Dillard's to withhold from the Restricted Shares otherwise deliverable to the Grantee as a result of the vesting of the Restricted Shares, a number of Restricted Shares having a Fair Market Value, as of the date the withholding tax obligation arises, less than or equal to the amount of the withholding obligation; or (iii) in unencumbered shares of Dillard's Class A Common Stock, which have been held for at least six months.

ARTICLE VIII

MODIFICATION OF AGREEMENT

Except as set forth in the Plan and herein, this Agreement may be modified, amended, suspended or terminated, and any terms or conditions may be waived, but only by a written instrument executed by the parties hereto.

ARTICLE IX

SEVERABILITY

Should any provision of this Agreement be held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force and effect in accordance with their terms.

ARTICLE X

GOVERNING LAW

The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Delaware without giving effect to the conflicts of laws principles thereof.

ARTICLE XI

SUCCESSORS IN INTEREST

This Agreement shall inure to the benefit of and be binding upon any successor to Dillard’s. This Agreement shall inure to the benefit of the Grantee’s beneficiaries, heirs, executors, administrators and successors. All obligations imposed upon the Grantee and all rights granted to Dillard’s under this Agreement shall be binding upon the Grantee’s beneficiaries, heirs, executors, administrators and successors.

DILLARD’S INC.

Name

Title

[GRANTEE]

Name

Title

Number of Restricted Shares Awarded: ___________________________

EXHIBIT 12 - STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)







	Three Months Ended		Fiscal Years Ended
	April 30,	May 1,	January 29,	January 31,	February 1,	February 2,	February 3,
	2005	2004	2005	2004	2003	2002	2001*

Consolidated pretax income	$ 59,440	$ 84,007	$ 184,551	$ 15,994	$ 204,261	$ 120,963	$ 183,531
Fixed charges (less capitalized
interest)	29,712	42,525	157,314	202,432	212,479	216,605	221,957

EARNINGS	$ 89,152	$ 126,532	$ 341,865	$ 218,426	$ 416,740	$ 337,568	$ 405,488


Interest	$ 26,200	$ 37,952	$ 139,056	$ 181,065	$ 189,779	$ 192,344	$ 196,609
Capitalized interest	1,868	821	4,485	2,622	2,469	5,415	4,720
Interest factor in rent expense	3,512	4,573	18,258	21,367	22,700	24,261	25,348

FIXED CHARGES	$ 31,580	$ 43,346	$ 161,799	$ 205,054	$ 214,948	$ 222,020	$ 226,677


Ratio of earnings to fixed charges	2.82	2.92	2.11	1.07	1.94	1.52	1.79

* 53 Weeks

CERTIFICATIONS

I, William Dillard, II, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Dillard’s, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 9, 2005

/s/ William Dillard, II

William Dillard, II

Chairman of the Board and Chief Executive Officer

CERTIFICATIONS

I, James I. Freeman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Dillard’s, Inc.;

(a)

(b)

(d) Disclosed in this report any changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 9, 2005

/s/ James I. Freeman

James I. Freeman

Senior Vice-President and Chief Financial Officer

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Dillard’s, Inc. (the “Company”) on Form 10-Q for the period ended April 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William Dillard, II, Chairman of the Board and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) and 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: June 9, 2005

/s/ William Dillard, II

William Dillard, II

Chairman of the Board and

Chief Executive Officer

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Dillard’s, Inc. (the “Company”) on Form 10-Q for the period ended April 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James I. Freeman, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) and 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: June 9, 2005

/s/ James I. Freeman __

James I. Freeman

Senior Vice President and

Chief Financial Officer