Dillard's 2010 Annual Report Download - page 30

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2009 Compared to 2008
Gross profit improved 340 basis points of sales during fiscal 2009 compared to fiscal 2008. Gross
profit from retail operations improved 410 basis points of sales during the same periods due to the
Company’s focused inventory management efforts resulting in lower inventory levels and decreased
markdown activity. Inventory in both total and comparable stores declined 5% as of January 30, 2010
compared to January 31, 2009.
Most merchandise categories experienced significant improvements in gross margin during fiscal
2009 compared to fiscal 2008, while shoes improved moderately and cosmetics was up only slightly.
Advertising, Selling, Administrative and General Expenses (‘‘SG&A’’)
(in thousands of dollars) Fiscal 2010 Fiscal 2009 Fiscal 2008
SG&A:
Retail operations segment ............. $1,621,190 $1,638,538 $1,930,356
Construction segment ................ 4,603 5,553 2,376
Total SG&A ......................... $1,625,793 $1,644,091 $1,932,732
SG&A as a percentage of segment net sales:
Retail operations segment ............. 26.9% 27.8% 28.6%
Construction segment ................ 4.6 2.7 2.7
Total SG&A as a percentage of net sales .... 26.6 27.0 28.3
2010 Compared to 2009
SG&A decreased $18.3 million during fiscal 2010 compared to fiscal 2009 primarily as a result of
the Company’s expense savings measures combined with store closures. The decline was most noted in
advertising ($28.7 million), payroll and related payroll taxes ($9.3 million) and property taxes
($7.2 million) partially offset by increases in services purchased ($14.4 million) and supplies
($6.4 million) and insurance ($5.6 million). The decrease in advertising expense was primarily a result
of the Company’s migration from newspaper media to less expensive internet marketing sources.
2009 Compared to 2008
SG&A decreased $288.6 million during fiscal 2009 compared to fiscal 2008 primarily as a result of
the Company’s cost control measures enacted during fiscal 2008 and store closures that occurred
primarily during fiscal 2008. The decline was most noted in payroll and related payroll taxes
($193.3 million), advertising ($31.6 million), services purchased ($20.0 million) and supplies
($13.0 million).
Depreciation and Amortization
(in thousands of dollars) Fiscal 2010 Fiscal 2009 Fiscal 2008
Depreciation and amortization:
Retail operations segment ................ $261,368 $262,709 $284,222
Construction segment ................... 182 168 65
Total depreciation and amortization ........... $261,550 $262,877 $284,287
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