Dillard's 2012 Annual Report Download - page 2

We are truly honored to commemorate our 75th year of
service in 2013. This milestone gives us reason for celebra-
tion of our successes as well as reection on our strong
heritage of serving America’s communities through decades
of change as a consistent source of fashion, value and
premium service.
Building upon the momentum of a very productive 2011,
we accomplished another record-setting earnings-per-share
performance in 2012. We achieved a strong and consistent
4% comparable sales increase for the year following sales
growth of 4% in 2011 and 3% in 2010. This positive sales
performance combined with gross margin expansion and
expense control drove strong cash ow throughout the year.
As a result, we were pleased to return cash to our sharehold-
ers in the form of a $5.00 special dividend during the fourth
quarter. Additionally, we purchased $186 million of Class A
Common Stock in 2012 under our share repurchase
program. Already in scal 2013, we have completed the
$92 million of authorization remaining under the program,
and we immediately announced a new $250 million share
repurchase authorization.
We delivered strong operating results during 2012. We
reported net income of $336 million and $6.87 per share for
scal 2012 compared to $464 million and $8.52 per share
for the prior year. Excluding after-tax credits for non-routine
items in both years, we would have reported scal 2012
adjusted net income of $310 million and $6.33 per share, a
record-setting earnings-per-share performance, compared
to $229 million and $4.21 per share. Additionally, we were
pleased with our merchandise gross margin improvement of
30 basis points of sales as well as with our expense control,
as operating expenses decreased 60 basis points of sales.
Throughout 2012, we continued to focus on knowing our
customer and staying true to our merchandise strategy,
which we believe gives Dillard’s clear distinction among our
retail peers. We believe our stores are well positioned
in 2013 to provide an unmatched shopping experience
in every market we serve because of our commitment
to these concepts:
• Presenting limited distribution, high-prole brands not
typically found in department stores along with well-
known, highly regarded national brands
• Offering fashionable, nationally recognized Dillard’s
exclusive brands which are preferred by customers for
their styling as well as their quality
• Equipping our associates with comprehensive product
knowledge and customer service tools to exceed the
expectations of the Dillard’s customer
• Presenting merchandise in edited assortments and in
engaging formats which encourage interaction with
sales associates, builds relationships, and facilitates
the sale
• Flowing merchandise receipts to stores in cadence
matched to demand, and pinpointing replenishment of
high-demand styles and colors with greater precision
based upon improvements in data analysis and
logistical response
Today, we celebrate a strong 75-year legacy of service with
unwavering commitment to the principles our founder,
William Dillard, championed throughout his lifetime as the
true foundation of success – integrity, honesty, loyalty, service,
and value. At Dillard’s, we are proud of our heritage, encour-
aged by our recent progress, and excited about the future.
We sincerely thank our customers, our shareholders, and our
associates for their ongoing contributions to our achieve-
ments. We look forward to serving you further in 2013.
William Dillard, II Alex Dillard
Chairman of the Board & President
Chief Executive Ofcer
DEAR SHAREHOLDER,
Celebrating our 75th anniversary and the continuing legacy
of William (1914-2002) and Alexa Dillard (1916-2013)