Dillard's 2003 Annual Report Download - page 19

Results of Operations
The following table sets forth the results of operations, expressed as a percentage of net sales, for the periods indicated:
(in millions of dollars) For the years ended
January 31, 2004 February 1, 2003 February 2, 2002
% of % of % of
Amount Net Sales Amount Net Sales Amount Net Sales
Net sales $7,598.9 100.0 % $7,911.0 100.0 % $8,154.9 100.0 %
Cost of sales 5,170.2 68.0 5,254.1 66.4 5,507.7 67.5
Gross profit 2,428.7 32.0 2,656.9 33.6 2,647.2 32.5
Advertising, selling, administrative
and general expenses 2,097.9 27.6 2164.0 27.3 2,191.4 26.9
Depreciation and amortization 290.7 3.8 301.4 3.8 310.7 3.8
Rentals 64.1 0.8 68.1 0.9 72.8 0.9
Interest and debt expense 181.1 2.4 189.8 2.4 192.3 2.4
Asset impairment and store closing
charges 43.7 0.6 52.2 0.7 3.8 -
Total operating expenses 2,677.5 35.2 2,775.5 35.1 2,771.0 34.0
Service charges, interest and other
income 264.8 3.4 322.9 4.1 244.8 3.0
Income before income taxes 16.0 0.2 204.3 2.6 121.0 1.5
Income taxes 6.7 0.1 72.4 0.9 49.2 0.6
Income before cumulative effect
of accounting change 9.3 0.1 131.9 1.7 71.8 0.9
Cumulative effect of accounting change - - (530.3) (6.7) - -
Net income (loss) $ 9.3 0.1 % $(398.4) (5.0) % $ 71.8 0.9 %
Sales
The percent change by category in the Company’s sales for the past two years is as follows:
% Change
03-02 02-01
Cosmetics -1.1 -2.5
Women’s and Juniors’ Clothing -4.8 -2.8
Children’s Clothing -8.9 -1.9
Men’s Clothing and Accessories -5.8 -5.9
Shoes, Accessories and Lingerie -0.8 -0.8
Home -4.3 -3.6
Sales decreased 4% for the 52-week period ended January 31, 2004 compared to the 52-week period ended February 1,
2003 on both a total and comparable store basis. Sales declined in all merchandising categories with the largest declines
in children’s, men’s clothing and accessories and women’s and juniors’ clothing. Sales in the home categories were in
line with the average sales performance while sales in accessories, shoes, lingerie and cosmetics were strongest and
exceeded the Company’s average sales performance for the period. Dillard’s management reiterates their strong belief
that merchandise differentiation by the Company is crucial to its future success in the marketplace. The Company
continues to work diligently to build penetration and recognition of its exclusive brand merchandise as a means to
provide superior price and value choices to its customers. During the fiscal years 2003, 2002 and 2001, sales of private
brand merchandise as a percent of total sales were 20.9%, 18.2% and 15.4%, respectively.
Sales decreased 3% for the 52-week period ended February 1, 2003 compared to the 52-week period ended February 2,
2002 on both a total and comparable store basis. The sales decrease for 2002 is due to lower levels of comparable store
sales particularly in the latter half of fiscal 2002 due to a notably weak retail environment. Sales declined in all
merchandising categories with the largest declines in men’s clothing and accessories and home, which decreased 6% and
4%, respectively.
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