Dillard's 2009 Annual Report Download - page 20

Download and view the complete annual report

Please find page 20 of the 2009 Dillard's annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 82

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82

In accordance with the National Retail Federation fiscal reporting calendar, the fiscal 2009, 2008
and 2007 reporting periods presented and discussed below ended January 30, 2010, January 31, 2009
and February 2, 2008, respectively, and each contained 52 weeks.
Fiscal 2009
The recessionary environment that arose in fiscal 2008 continued to suppress consumer spending
throughout most of fiscal 2009, having a significant impact on the Company’s operations. Despite a
significant decrease in sales, our gross margin improved during fiscal 2009 compared to fiscal 2008. We
continued to benefit from our improvements in inventory management, focusing on more conservative
purchasing and efforts to better match the timing of receipts with demand, which resulted in reduced
markdowns. Our cost control initiatives that began during fiscal 2008 resulted in reduced operating
expenses during fiscal 2009. Consequently, we reported an improvement to our operating results, with
net income increasing to $68.5 million, or $0.93 per share, during fiscal 2009 compared to a net loss of
$241.1 million, or $3.25 per share, during fiscal 2008.
Included in net income for fiscal 2009 are:
• a $3.1 million pretax charge ($2.0 million after tax or $0.03 per share) for asset impairment and
store closing charges;
• a $5.7 million pretax gain ($3.6 million after tax or $0.05 per share) related to proceeds received
from settlement of the Visa Check/Mastermoney Antitrust litigation;
• a $10.6 million income tax benefit ($0.14 per diluted share) primarily due to state administrative
settlement and a decrease in a capital loss valuation allowance;
• a $1.7 million pretax gain ($1.0 million after tax or $0.01 per share) on the early extinguishment
of debt; and
• a $2.3 million pretax gain ($1.5 million after tax or $0.02 per share) related to the sale of a
store.
Included in the net loss for fiscal 2008 are:
• a $197.9 million pretax charge ($136.5 million after tax or $1.84 per share) for asset impairment
and store closing charges;
• a $7.3 million pretax charge ($4.6 million after tax or $0.06 per share) related to hurricane
expenses; and
• a $24.8 million pretax gain ($15.6 million after tax or $0.21 per share) related to the sale of an
aircraft and a store.
Highlights of fiscal 2009 as compared to fiscal 2008 are:
• net sales from retail operations were $5.9 billion, a decrease of $852.6 million or 13% while
comparable stores sales fell 10%;
• gross profit from retail operations improved 410 basis points of sales;
• total inventory declined $73.7 million, with comparable store inventory down 5%;
• operating expenses declined $288.6 million; and
• year over year outstanding debt declined $233.9 million, with no short-term borrowings
outstanding. Total availability under the Company’s $1.2 billion revolving credit facility ranged
from a high of $1,147.7 million to a low of $816.3 million during fiscal 2009.
16