Dillard's 2009 Annual Report Download - page 28

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2009 Compared to 2008
Net sales from the retail operations segment decreased $852.6 million or 13% during fiscal 2009 as
compared to fiscal 2008 while sales in comparable stores declined 10%. All merchandise categories
experienced significant sales declines, with the most noted decline in the home and furniture category.
The net sales decrease reflected a 16% decrease in the number of sales transactions while the
average dollars per sales transaction increased approximately 4%.
We believe sales in all categories were affected by the continued challenging economic
environment prevalent throughout fiscal 2009. In light of recent signs of modest economic
improvement, we may see some sales growth over the coming months; however, there is no guarantee
of improved sales performance. Any further deterioration in the United States economy could have an
adverse affect on consumer confidence and consumer spending habits, which could result in reduced
customer traffic and comparable store sales, higher inventory levels and markdowns, and lower overall
profitability.
2008 Compared to 2007
Net sales from the retail operations segment decreased $464.8 million or 6% during fiscal 2008 as
compared to fiscal 2007 while comparable store sales declined 7%. All merchandise categories
experienced sales declines, with significant declines noted in the home and furniture and juniors’ and
children’s apparel categories. We believe sales in all categories were affected by the decline in the
general economic environment during fiscal 2008.
The net sales decrease reflected a 6% decrease in the number of sales transactions while the
average dollars per sales transaction remained flat.
Exclusive Brand Merchandise
Sales penetration of exclusive brand merchandise for fiscal years 2009, 2008 and 2007 was 23.8%,
24.0% and 24.2% of total net sales, respectively.
Service Charges and Other Income
Dollar Change Percent Change
Fiscal Fiscal Fiscal
(in millions of dollars) 2009 2008 2007 2009-2008 2008-2007 2009-2008 2008-2007
Service charges and other income:
Income from GE marketing and
servicing alliance ............ $ 88.7 $109.7 $118.8 $(21.0) $(9.1) (19.1)% (7.7)%
Leased department income ...... 10.8 13.8 13.0 (3.0) 0.8 (21.7) 6.2
Shipping and handling income .... 15.4 15.7 14.3 (0.3) 1.4 (1.9) 9.8
Visa Check/Mastermoney Antitrust
settlement proceeds .......... 5.7 0.4 — 5.3 0.4 +100.0 —
Other ..................... 11.1 18.3 17.3 (7.2) 1.0 (39.3) 5.8
Total .................... $131.7 $157.9 $163.4 $(26.2) $(5.5) (16.6)% (3.4)%
2009 Compared to 2008
Service charges and other income is composed primarily of income from the Alliance with GE.
Income from the Alliance decreased $21.0 million in fiscal 2009 compared to fiscal 2008 due to a lower
penetration rate of Dillard’s branded proprietary credit card and increased credit losses partially offset
by lower funding costs. Also included in service charges and other income were proceeds of
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